The Tax Court held that neither the substantial compliance nor the tacit consent doctrine excused a taxpayer's failure to sign a joint return.
Bradley and Nancy Reifler were married in 1988. Over the years, Mr. Reifler generally handled their family financial and tax matters, including the preparation of income tax returns, and for the 2000 tax year he arranged for a CPA to prepare their joint return.
After the CPA prepared the return, he sent it to the couple. Mr. Reifler signed, but did not date, the original return and placed it in a bin where he usually placed documents that required Mrs. Reifler's signature. However, the next morning, before Mrs. Reifler signed the return, Mr. Reifler mailed the return to the IRS Service Center in Andover, Mass. According to Mr. Reifler, he did not check to see if his wife had signed the return before he sent it.
Sometime after the IRS received the original 2000 return, the Service returned it to the Reiflers. The Reiflers claimed that they received the original 2000 return with some red ink marks on it and date-stamped Oct. 15, 2001, but did not receive any attached correspondence. According to the Tax Court, standard IRS Service Center procedure would have been to stamp the return with a document locator number, to place a red "S" on the top left-hand corner of the first page, and to return it to the taxpayers, along with a checklist of potential return defects and a notice telling the taxpayers they forgot to sign their return.
On July 29, 2002, the IRS issued a taxpayer delinquency notice to the petitioners, informing them that the Service had not received their 2000 federal income tax return. On Aug. 25, 2002, after the Reiflers discussed the delinquency notice with their CPA, they signed a second Form 1040 and supporting schedules, dated Aug. 25, 2002, and sent them to the IRS (second 2000 return). Although the return was merely a copy of the original return, they did not include any correspondence with the second 2000 return explaining their position to the IRS. As a result, the IRS treated the second 2000 return as the petitioners' original federal income tax return for 2000 with a filing date of Sept. 2, 2002.
In April 2004, the IRS began auditing the Reiflers'2000 to 2005 tax years. Beginning on July 1, 2005, the Reiflers signed a series of consents extending the assessment and collection limitation period for 2000 until June 30, 2010. On May 17, 2010, the IRS issued a notice of...