Joint Returns Were Valid Despite Husband Forging Wife's Signature

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Joint Returns Were Valid Despite Husband Forging Wife’s Signature

Posted by Kim Chen on August 4th, 2018

Coggin, (DC NC 7/17/2018) 122 AFTR 2d ¶ 2018-5046
A district court has held that, where a husband forged his wife’s signature on their joint federal tax returns, the returns were still valid joint returns. The holding was based on the fact that the wife never objected to his forging and didn’t file separate returns other than separate amended returns filed many years after the return due dates.
Background—requirement that returns be signed. Code Sec. 6061(a) provides that any return or other document required to be made under any provision of the internal revenue laws or regs must be signed. Reg. § 1.6013-1(a)(2) requires signatures of both spouses on a joint tax return. Form 1040 provides space for signatures of both spouses and states: “If a joint return, both must sign”. Instructions for Form 1040 warn that a Form 1040 is not considered a valid tax return unless signed by the taxpayer.
Background—joint/separate returns. A husband and wife may elect to file a joint tax return or they may file separately. (Code Sec. 6013(a)) For any tax year with respect to which a joint return has been filed, separate returns may not be made by the spouses after the time for filing the return of either has expired. (Reg. § 1.6013-1(a)(1)) Thus, one spouse cannot file a valid joint return and then, years later, seek to replace that joint return with a separate return.
Background—innocent spouse relief. Code Sec. 6015 provides that a spouse who has made a joint return may elect to seek relief from joint and several liability under one of three relief provisions.
Facts. Alice and Phil Coggin were married until his death in 2011. On Nov. 25, 2009, Mr. Coggin filed married-filing-jointly tax returns for the 2002 through 2007 tax years on behalf of himself and Ms. Coggin. Mr. Coggin signed Ms. Coggin’s signatures on the 2002 through 2007 joint tax returns without her knowledge or consent.
Mr. Coggin was responsible for family financial matters. Ms. Coggin “assumed that [Mr. Coggin] was handling” the taxes and “trusted him to do the right thing”.
After his death, Ms. Coggin learned that he had signed her name on the 2002 through 2007 joint returns. She thereafter filed married-filing-separately returns for those years and sought a refund of part of the 2002 through 2007 taxes that Mr. Coggin paid.
IRS disallowed her married-filing-separately returns. The parties agreed that if the joint returns filed by Mr. Coggin were valid, then Ms. Coggin could not seek to “undo” those returns based on her later-filed separate returns.
Joint returns were valid. The district court held that the joint returns were valid.
The court said that there is a limited exception to the rule requiring both signatures: when only one spouse signs a joint return, the return is valid if the non-signing spouse intended to file jointly. “The intent to file jointly may be inferred from the acquiescence of the nonsigning spouse.” (Crew, TC Memo 1982-535) Thus, “where a husband files a joint return without objection of the wife, who fails to file a separate return, it will be presumed the joint return was filed with the tacit consent of the wife”. (Heim (CA 8 1958) 1 AFTR 2d 660)
The court said that Ms. Coggin never filed a timely separate tax return, and she understood that her husband prepared and filed joint returns on her behalf. She did not file separate tax returns for the 2002 through 2007 tax years until 2012.
The court said that these undisputed facts established as a matter of law that Ms. Coggin intended to file the 2002 through 2007 joint tax returns.
Ms. Coggin also argued that Mr. Coggin’s misrepresentation to her that she did not need to sign the 2002 through 2007 tax returns negated her consent to jointly file; she cited the innocent spouse provisions.
The court said that, while this misrepresentation was undisputed, it did not create a material issue of fact with respect to her intent. And, the court said, the innocent spouse exception acts only to relieve a spouse of tax liability, not to entitle a spouse to a refund. Ms. Coggin’s claim was for a refund, not for relief from tax liability, and she did not identify any case or statute that would entitle her to a refund based on Mr. Coggin’s misrepresentation.