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Modern-Day Equitable Recoupment and the "Two Tax Effect:" Avoidance of the Statutes of Limitation in Federal Tax Controversies

Abstract

Taxpayers seeking to avoid or lessen their tax liability when two types of taxes are imposed on the same taxpayer are faced with a short period of limitations during which they can gain forgivance of their tax obligations. Equitable recoupment represents a way for taxpayers to avoid the stringencies of these limitations by transforming an overpayment in one tax area to become a refund in another tax area. Using the example of estate taxes and pre-death federal income tax liability, this Article examines the nature of limitations on tax claims, how their restrictions can be avoided, the application of the doctrine of equitable recoupment, and how choosing to pursue the taxpayer's claim in the federal district court can permit a taxpayer to recoup an otherwise barred claim.

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28 Ariz. L. Rev. 595 (1986)

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Authors

Arthur W. Andrews (University of Arizona)

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