Source: https://caselaw.findlaw.com/us-supreme-court/320/418.html
Timestamp: 2019-04-20 11:19:55+00:00

Document:
COM'R OF INTERNAL REVENUE v. GOOCH M. & E. CO.
Mr. D. M. Kelleher, of Ft. Dodge, Iowa, for respondent.
The jurisdiction of the Board of Tax Appeals1 to determine and to apply a prior tax overpayment against a tax [320 U.S. 418, 419] deficiency for a particular year is the sole question presented by this case. The Board held that it did not possess such jurisdiction, but the court below reversed, 8 Cir., 133 F.2d 131. We granted certiorari, 319 U.S. 737 , 63 S.Ct. 1318, the problem being one of importance in the administration of the revenue laws.
We are not called upon to determine the scope of equitable recoupment when it is asserted in a suit for refund of taxes in tribunals possessing general equity jurisdiction. Cf. Bull v. United States, 295 U.S. 247 , 55 S. Ct. 695; Stone v. White, [320 U.S. 418, 422] 301 U.S. 532 , 57 S.Ct. 851. But its use in proceedings before the Board is governed by the circumscribed jurisdiction of that agency. The Internal Revenue Code, not general equitable principles, is the mainspring of the Board's jurisdiction. Until Congress deems it advisable to allow the Board to determine the overpayment or underpayment in any taxable year other than the one for which a deficiency has been assessed, the Board must remain impotent when the plea of equitable recoupment is based upon an overpayment or underpayment in such other year. The judgment of the court below is therefore reversed and that of the Board of Tax Appeals is affirmed.
[ Footnote 1 ] Section 504(a) of the Revenue Act of 1942, c. 619, 56 Stat. 798, 957, 26 U.S.C.A. Int.Rev.Code, 1100, changed the name of the Board of Tax Appeals to The Tax Court of the United States. Section 504(b), 26 U.S. C.A. Int.Rev.Code, 1100 note, provided that this change in name was to have no effect on the jurisdiction, powers and duties of the agency. See also H. Rep. No. 2333, 77th Cong., 2d Sess., pp. 172, 173.
[ Footnote 2 ] The respondent filed its tax returns on the basis of a fiscal year ending on June 30. The inventory of June 30, 1935, was common to successive years, being the closing inventory for the 1935 fiscal year and the opening inventory for the 1936 fiscal year.
[ Footnote 3 ] See, for example, Appeal of R. P. Hazzard Co., 4 B.T.A. 150; Appeal of Cornelius Cotton Mills, 4 B.T.A. 255; Appeal of Dickerman & Englis, Inc ., 5 B.T.A. 633; B. T. Couch Glue Co. v. Commissioner, 12 B.T.A. 1321; Gould-Mersereau Co., Inc., v. Commissioner, 21 B.T.A. 1316; Heyl v. Commissioner, 34 B.T.A. 223; Red Wing Potteries, Inc., v. Commissioner, 43 B.T.A. 841; Elbert v. Commissioner, 2 T.C., No. 113.
[ Footnote 4 ] 53 Stat. 158, 26 U.S.C. 1100, 26 U.S.C.A. Int.Rev.Code, 1100.
[ Footnote 5 ] The Board has not hesitated to exercise its jurisdiction under 272(g) to consider the taxes for other taxable years insofar as relevant to the correct redetermination of the deficiency in question. See Evens & Howard Fire Brick Co. v. Commissioner, 8 B.T.A. 867; Commercial Trust Co. v. Commissioner, 8 B.T.A. 1138; D.N. & E. Walter & Co., Inc., v. Commissioner, 10 B.T.A. 620; J. C. Blair Co. v. Commissioner, 11 B.T.A. 673; Greenleaf Textile Corp. v. Commissioner, 26 B.T.A. 737, affirmed 2 Cir., 65 F.2d 1017; W. M. Ritter Lumber Co. v. Commissioner, 30 B.T.A. 231, 277.
[ Footnote 7 ] Before 272(g) of the Internal Revenue Code was enacted, the Board held that it had jurisdiction to determine an overpayment for a year as to which no deficiency had been found by the Commissioner and to apply that overpayment against the liability for the year as to which he had found a deficiency, thus giving effect to the doctrine of equitable recoupment. Appeal of E. J. Barry, 1 B.T.A. 156. Soon thereafter, however, Congress passed 274(g) of the Revenue Act of 1926 (now 272(g) of the Internal Revenue Code) taking such jurisdiction away from the Board.

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