DocketNumber： Docket No. 1837-92
Filed Date： 6/27/1994
Status： Non-Precedential
Modified Date： 11/21/2020
1994 Tax Ct. Memo LEXIS 297">*297 Decision will be entered under Rule 155.
MEMORANDUM OPINION
FAY,
| Additions to Tax | |||||
| Sec. | Sec. | Sec. | Sec. | ||
| Year | Deficiency | 6653(a) | 6653(a)(1) | 6653(a)(2) | 6661 |
| 1980 | $ 43,242 | $ 2,162.10 | -- | -- | $ 10,810.50 |
| 1981 | 44,800 | -- | $ 2,240 | 11,200.00 | |
| 1982 | 139 | -- | -- | -- | -- |
All section references are to the Internal Revenue Code in effect for the years in issue, and all Rule references are to the Tax Court Rules of Practice and Procedure, unless otherwise indicated.
After concessions by the parties, the sole issue for decision is whether petitioner and his former wife filed a joint income tax return for the 1981 taxable year. A stipulation of settled issues and a stipulation of facts, with joint exhibits, were filed on May 10, 1993, and May 12, 1993, respectively. By this reference, these facts are so found and incorporated herein.
At the time the petition1994 Tax Ct. Memo LEXIS 297">*298 herein was filed, petitioner resided in Houston, Texas.
Petitioner and his former wife, Virginia Boyle (Mrs. Boyle), were married in August 1966 and remained married thereafter for almost 21 years until their divorce in June 1987. Joint tax returns were filed by petitioner and Mrs. Boyle for the taxable years 1966 through 1980, and 1982 through 1986.
Petitioner, during 1981, owned and operated his own home construction company, International Homes, Inc. Mrs. Boyle was employed by Capital Bank during 1981. During 1981, and through April 1982, Mrs. Boyle served as a loan officer and vice president to Capital Bank.
The 1981 return reported income from Mrs. Boyle's employment at Capital Bank in the amount of $ 33,430.00. Interest and dividend items of income attributable solely to Mrs. Boyle, and jointly to Mrs. Boyle and petitioner were reported on the 1981 return. Exemptions were also claimed for both petitioner and Mrs. Boyle on the 1981 return. In addition, the appropriate box was checked to indicate "married filing jointly", the tax was computed using joint rates, and the names and Social Security numbers of both spouses appeared at the top of the return. In other words, 1994 Tax Ct. Memo LEXIS 297">*299 although Mrs. Boyle did not sign the return, it was otherwise in the form of a joint return. Petitioner did not file any other Federal income tax return for the 1981 taxable year. Mrs. Boyle did not file any other Federal income tax return for the 1981 taxable year.
From 1966 through 1980, petitioner and Mrs. Boyle utilized the same process for preparation and filing of their joint Federal tax returns. This system was originally established prior to petitioner's marriage to Mrs. Boyle. Petitioner would accumulate all tax-related information during the year in a drawer in his desk, such desk being located in the study. Once petitioner and Mrs. Boyle were married, petitioner asked Mrs. Boyle to accumulate her tax information in that drawer as well. When it became time to prepare the tax return petitioner would take all the information out of the drawer and deliver it to his Certified Public Accountant (C.P.A.) who would then prepare the return for that particular year. Once the return was prepared, the C.P.A. would then cause it to be delivered to petitionerer, at which time petitioner, after affixing his own signature, would allow Mrs. Boyle to examine the return before she1994 Tax Ct. Memo LEXIS 297">*300 affixed her signature to it. Once Mrs. Boyle had examined the return and executed it, the return would be mailed to the Service Center for processing.
This procedure was partially followed with respect to the 1981 tax return with petitioner delivering, some time in early 1982, the pertinent information to Jess Kaps (Mr. Kaps), 1994 Tax Ct. Memo LEXIS 297">*301 to personally read over and execute the 1981 return. Petitioner affixed his signature to the 1981 return on April 14, 1982. During the evening of April 14, 1982, petitioner called Mrs. Boyle at her parents' home in Wichita Falls and informed her that he was in possession of their completed 1981 return, and that, because a request for an extension had not been filed, the 1981 return needed to be executed by her and mailed. Mrs. Boyle made it clear to petitioner that she wanted to review the return, as she had for the prior 15 years, and that it was not possible for her to fly home in order to review and execute the return. Finally, upon being told by petitioner that petitioner and Mr. Kaps had already executed the return, and recalling that nothing significant had happened during the year, Mrs. Boyle verbally authorized petitioner to execute and submit the 1981 return on her behalf. This was the only time during the course of their marriage that Mrs. Boyle did not herself review and execute their joint return.
1994 Tax Ct. Memo LEXIS 297">*302 On April 15, 1982, petitioner, having already executed the 1981 return, placed the return on top of a "do" pile located on his desk in his office. At this point petitioner testified that he did not recall the events surrounding the final execution, involving Mrs. Boyle's signature, and submission of the 1981 return.
Judy McFarland (Ms. McFarland) was petitioner's bookkeeper and an officer, acting as secretary/treasurer, at International Homes, Inc., during the period here at issue. At the time of trial, Ms. McFarland was employed by petitioner and had worked for petitioner in one capacity or another for a continuous period of 14 years. Additionally, Ms. McFarland is a second cousin to Mrs. Boyle, their grandmothers having been sisters. It is our conclusion, despite the confusion in the record, that Ms. McFarland signed Mrs. Boyle's name to the 1981 return on April 15, 1982, rather than April 14, 1982, and then caused this return to be mailed to the proper service center.
Although Mrs. Boyle did not remember exactly when she finally reviewed the 1981 return, it appears that she did review the 1981 return approximately 6 months after it was filed. At that time she noticed that1994 Tax Ct. Memo LEXIS 297">*303 a refund of $ 61,227 had been claimed on the return.
In late 1983 or early 1984, Mrs. Boyle executed a power of attorney in favor of Mr. Kaps, her C.P.A., to deal with tax matters for several taxable years, including the 1981 taxable year. Additionally, on September 19, 1984, Mrs. Boyle executed a Special Consent to Extend the Time to Assess Tax for any Federal income tax due on the 1980 and 1981 returns. On December 9, 1988, Mrs. Boyle executed a form granting a power of attorney to Leonard S. Roth Discussion
Petitioner argues, in essence, that the 1981 return filed on behalf of petitioner and Mrs. Boyle does not constitute a valid joint return because Mrs. Boyle did not sign it herself. Petitioner asserts several additional alternative positions which we disregard as without merit. Respondent argues that, despite the1994 Tax Ct. Memo LEXIS 297">*304 absence of Mrs. Boyle's actual signature on the 1981 return, Mrs. Boyle intended to file the joint return which in fact was filed, and, therefore, a valid joint return exists for the 1981 taxable year. We agree with respondent.
The petitioner bears the burden of establishing that he and his former wife did not file a joint return for the 1981 taxable year.
The rule regarding joint returns and the signatures affixed to them has been long settled in that where an income tax return is intended by both spouses to be a joint return, the absence of the signature of one spouse does not prevent their intention from being realized.
Petitioner cites a number of cases to support his position. We find these cases clearly distinguishable from the immediate case. In fact, one such case which petitioner cites,
Petitioner testified, and we believe, that, at the time petitioner affixed his signature to the 1981 joint return, petitioner fully intended to file the 1981 return as a joint return. Mrs. Boyle testified, and we believe, that in April 1982 she fully intended to file the 1981 return as a joint return. The 1981 joint return that petitioner and Mrs. Boyle intended to file was actually filed in April 1982.
There was conflicting testimony at trial with respect1994 Tax Ct. Memo LEXIS 297">*306 to how the signature purporting to be that of Mrs. Boyle appeared on the 1981 return. Petitioner testified that Mrs. Boyle did not authorize him to sign the return on her behalf, that he did not sign it on her behalf, and that, after he signed his own name to the return, he placed the return on his desk and does not remember what happened to it thereafter. Ms. McFarland testified that she signed the return on behalf of Mrs. Boyle after receiving Mrs. Boyle's authorization, at which time she then caused the return to be properly mailed. Mrs. Boyle denies authorizing Ms. McFarland to sign the return on her behalf but testified that she authorized petitioner to do so. Petitioner focuses on this conflict for purposes of arguing that there is not a valid 1981 joint return.
We believe that the most likely chain of events was that Mrs. Boyle authorized petitioner to execute the return on her behalf, at which time petitioner thereafter directed Ms. McFarland to sign Mrs. Boyle's name and have it mailed. After analysis of the record and the applicable case law, however, we deem this conflict to be irrelevant to the ultimate issue at hand and find that, regardless of how Mrs. Boyle's 1994 Tax Ct. Memo LEXIS 297">*307 "signature" came to be on the return, be it by Judy McFarland at petitioner's direction after Mrs. Boyle authorized petitioner to execute the return on her behalf, or be it by Judy McFarland with Mrs. Boyle's direct authorization, the result remains the same: Mrs. Boyle was apprised of the contents of the 1981 return, and she intended that it be executed and filed as a joint return on her behalf. See
To reflect the foregoing,
1. 50 percent of the interest due on the deficiency.↩
1. The record reflects Jess Kaps (Mr. Kaps) as the Boyles' CPA during the years at issue but is unclear as to how many years Mr. Kaps had been preparing the Boyles' returns.↩
2. At the trial, Mrs. Boyle testified that it was her father who was lying ill and needed to be attended to. Petitioner and Judy McFarland testified that it was Mrs. Boyle's mother who was ill. Because the identity of which parent was ill is of no consequence to the outcome of this case, the word "parent" will be used to refer to the ailing individual.↩
3. Leonard S. Roth is Mrs. Boyle's counsel in her related Tax Court case, docket No. 1838-92.↩