Valid return; election to file joint return. This
ruling clarifies when documents prepared or executed by the Secretary under
section 6020 of the Code, or waivers on assessment constitute valid returns
under Beard v. Commissioner, 82 T.C. 766 (1984), aff’d,
793 F.2d 139 (6th Cir. 1986), for purposes of the election to file a joint
return under section 6013. Rev. Rul. 74-203 revoked.
1. Are documents made by the Internal Revenue Service, as authorized
under section 6020(b) of the Internal Revenue Code, joint returns of income
tax for the husband and wife?
2. Is a document prepared by the Service under section 6020(a) and executed
by a husband and wife a joint return of income tax for the husband and wife?
3. Is a Form 870 prepared by the Service and executed by a husband and
wife a joint return of income tax for the husband and wife?
Taxpayers, husband and wife, failed to file a return for the 1999 tax
year. A revenue agent was assigned to secure the return. The taxpayers did
not provide the revenue agent all information necessary for the preparation
of the return. The revenue agent made separate returns using information from
other sources using tax rates applicable to married individuals filing separate
returns. The taxpayers did not sign the documents made by the revenue agent.
The taxpayers, husband and wife, failed to file a return for the 1999
tax year. A revenue agent was assigned to secure the return. The taxpayers
provided the revenue agent with all information necessary for the preparation
of the return and expressed their intention to file a joint return. The revenue
agent prepared a joint return using the information provided by the taxpayers.
The taxpayers signed the joint return prepared by the revenue agent under
penalties of perjury.
The taxpayers, husband and wife, failed to file a return for the 1999
tax year. A revenue agent was assigned to secure the return. The taxpayers
did not provide the revenue agent all information necessary for the preparation
of the return. The revenue agent did not prepare a joint return and instead
prepared a Form 870, Waiver of Restrictions on Assessment and Collection
of Deficiency in Tax and Acceptance of Overassessment, and the
taxpayers consented to the immediate assessment of taxes for the 1999 tax
year by signing the Form 870. Form 870 is not verified by a written declaration
that it is made under the penalties of perjury.
In general, a document filed with the Service is treated as a return
if the document: (1) contains sufficient data to calculate the tax liability;
(2) purports to be a return; (3) represents an honest and reasonable attempt
to satisfy the requirements of the tax law; and (4) is executed under penalties
of perjury. Beard v. Commissioner, 82 T.C. 766, 777 (1984), aff’d,
793 F.2d 139 (6th Cir. 1986) (citing Badaracco v. Commissioner,
464 U.S. 386 (1984); Zellerbach Paper Co. v. Helvering,
293 U.S. 172 (1934); and Florsheim Bros. Drygoods Co. v. United
States, 280 U.S. 453 (1930)).
Section 6013 generally authorizes a husband and wife to make a single
return jointly of income tax. Section 1.6013-1(a)(1) of the Income Tax Regulations
provides that a husband and wife may elect to make a joint return. Taxpayers
must make an election to make a joint return on a validly filed return.
Section 6020(a) authorizes the Secretary to prepare a return for a taxpayer
who fails to make and file a return if the taxpayer discloses all information
necessary for the preparation of the return. If the taxpayer signs the return
prepared by the Secretary, the return may be received as the taxpayer’s
return.
If a taxpayer fails to make a return, or makes a false or fraudulent
return, section 6020(b) authorizes the Secretary to make a return from his
own knowledge and from such information as he can obtain through testimony
or otherwise.
Section 6065 requires that a return ”shall contain or be verified
by a written declaration that it is made under the penalties of perjury.”
Joint return filing status under section 6013(a) is predicated on the
husband and wife making an election and intending to file a joint return.
Accordingly, the Service may not elect joint filing status on behalf of taxpayers
in a return it prepares and signs under the authority of section 6020(b). See
Millsap v. Commissioner, 91 T.C. 926 (1988), acq. in
result, 1991-2 C.B. 1 (filing status used by IRS in preparing return
under section 6020(b) does not bind taxpayers in later deficiency proceeding).
In Situation 1, the documents made by the revenue agent under the authority
of section 6020(b) are not returns of income tax filed by the husband and
wife for purposes of section 6013 because they did not sign the returns under
penalties of perjury. The documents made by the revenue agent under the authority
of section 6020(b) also do not constitute valid elections to file a joint
return under section 6013.
In Situation 2, the document prepared by the revenue agent under the
authority of section 6020(a) was signed by the husband and wife under penalties
of perjury. The section 6020(a) document (1) contains sufficient data to calculate
the tax liability, (2) purports to be a return, (3) represents an honest and
reasonable attempt to satisfy the requirements of the tax law, and (4) is
executed under penalties of perjury. The section 6020(a) document, therefore,
constitutes a valid return under the four-part Beard test
and, because it is signed by both the husband and wife, it is a joint return
of income tax for purposes of section 6013.
A Form 870, although signed by both husband and wife, is not verified
by a written declaration that it is made under the penalties of perjury. A
Form 870 is not a return under the Beard test because
it does not purport to be a return and it is not signed under penalties of
perjury as required by section 6065. Beard, 82 T.C. at
777.
In Rev. Rul. 74-203, 1974-1 C.B. 330, the Service determined that a
Form 870 signed by taxpayers, husband and wife, was a return of the taxpayers
for purposes of section 6020(a) and a valid election to file a joint return
under section 6013. Rev. Rul. 74-203 is inconsistent with Beard and
the cases cited therein on what constitutes a valid return, because a Form
870 does not purport to be a return and is not executed under penalties of
perjury.
ISSUE 1. Documents made under the authority of
section 6020(b) that are not signed by the taxpayers under penalties of perjury
are not returns filed by the taxpayers for purposes of section 6013 and are
not valid elections to file a joint return.
ISSUE 2. A document prepared by the Service under
the authority of section 6020(a) that is signed by the taxpayers under penalties
of perjury is a return of the taxpayers for purposes of section 6013 and constitutes
a valid election to file a joint return.
ISSUE 3. A Form 870, which includes a waiver signed
by the taxpayers, is not a return filed by the taxpayers for purposes of section
6013 and does not constitute a valid election to file a joint return. This
holding also applies to Form 1902, Report of Individual Income Tax
Audit Changes (obsoleted 1988), and Form 4549, Income
Tax Examination Changes, and any successor forms to these forms.
EFFECT ON OTHER DOCUMENTS
Rev. Rul. 74-203 is revoked. A Form 870 signed by taxpayers, husband
and wife, is not a return under section 6020(a) and it is not an election
to file a joint return under section 6013. This holding also applies to Form
1902, Report of Individual Income Tax Audit Changes (obsoleted
1988), and Form 4549, Income Tax Examination Changes,
and any successor forms to these forms, because these documents do not purport
to be returns and do not contain a jurat with a penalties of perjury clause.
The principal author of this revenue ruling is Michael E. Hara of the
Office of Associate Chief Counsel (Procedure & Administration). For further
information regarding this revenue ruling, contact Michael E. Hara at (202)
622-4910 (not a toll-free call).
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