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Be Careful What You File For!

Abdelhadi v. Comm’r, T.C. Memo. 2018183, 2018 WL 5609201 (2018)

(a) Facts: Husband and wife were married in 2014. Before getting married, they were romantically involved with one another and had both a daughter and a son.

The IRS received a joint tax return for tax year 2007, in which the couple clearly was not married. The wife “did not see, review, or sign that return; she has not seen it since and it is not part of the record.” 2018 WL 5609201, at *2. (To the extent that the wife’s signature appeared on the return, she presumably argued that her signature had been forged.)

The IRS assessed a deficiency on the 2007 return. The wife filed a petition for innocent spouse relief. The IRS denied the claim, and the wife appealed.

(b) Issue: Was the wife entitled to innocent spouse relief?

(c) Answer to Issue: No, but the Tax Court expressly refused to rule upon whether joint and several liability existed to begin with.

(d) Summary of Rationale: The wife argued that she did not file a joint tax return in 2007 because she never signed such a return. Further, the wife was not even permitted by law to file a joint return for 2007 as the parties were not then married.

The IRS did not contest the above facts, but it argued that when considering a petition for innocent spouse relief, the Tax Court lacked jurisdiction to rule upon whether the petitioning spouse was liable for the tax to begin with. The Tax Court agreed. “Because petitioner did not file a joint return, there is no relief we can grant under section 6015.” Id. at *2.

Observation: When a spouse does not sign a valid joint tax return to begin with, the spouse should file an action in the Tax Court for relief from joint and several liability on the ground that the return was invalid, not a request for innocent spouse relief. See, e.g., Hiramanek. The wife in Abdelhadi was obviously not subject to liability on a return she did not sign, but she pushed the wrong procedural button.