Tax News

CCH (cch.taxgroup.com) reports:

The government was not entitled to raise a setoff claim after judgment had been entered in favor of an insurance company that sought a tax refund and only the parties' computations of the correct refund amount remained to be submitted to the court. The government had the opportunity to plead its setoff claim earlier and the evidence showed that it was not unable to do so.
Although the government contended that Tax Court Rule 155 allows for the introduction of new issues during the recalculation of deficiencies, that rule was not adopted in whole by the Court of Federal Claims. Rather, a procedure loosely based on the rule was adopted for purposes of the computation of the refund due. The cases cited by the government showed that, absent the explicit warnings contained in Rule 155, a taxpayer would proceed at his risk if he agrees to propose, jointly with the government, a judgment amount following a decision on tax liability.
Related decision at 2006-1 USTC ¶50,240.
Principal Life Insurance Company, FedCl, 2007-2 USTC ¶50,719
Other References:
Code Sec. 7422
CCH Reference - 2007FED ¶41,688.21
Tax Research Consultant
CCH Reference - TRC LITIG: 9,106