Source: http://procedurallytaxing.com/the-eight-circuit-gives-both-sides-a-hard-time-on-what-is-a-separate-return-for-section-6013b-purposes/
Timestamp: 2019-02-18 01:36:35
Document Index: 547137567

Matched Legal Cases: ['§ 6013', '§ 6013', '§ 6013', '§ 6013', '§ 6013', 'art 851']

February 12, 2015 by Carlton Smith 2 Comments
The 8th Circuit will rule against the Ibrahim appellants–but for reasons different than the reasons the Tax Court and the DOJ articulated.
Attorney DiPietro essentially argues that, for § 6013 purposes, Mr. Ibrahim filed no return at all. He argues that only an MFS return is a “separate return” and, thus, he concludes that Mr. Ibrahim’s filed HOH return is not a “separate return.” This argument actually wins the battle…but it loses the war.
If Mr. Ibrahim did not file a “separate return,” then he filed no return recognized by § 6013. So far, so good. Because Mr. Ibrahim did not file a separate return, he and his wife are free to file a joint return. But now the tide turns.
Under § 6013(b)(2)(B), no one may elect an MFJ status if the Commissioner issues a valid NOD to either spouse and if the noticed spouse timely petitions the Tax Court. Importantly, the Commissioner may issue an NOD even when a taxpayer files no return. In Ibrahim, the Commissioner issued a valid NOD and Mr. Ibrahim filed a timely Tax Court petition. And those acts signify Mr. Ibrahim’s legal demise.
It is immaterial whether Mr. Ibrahim’s HOH return is, or is not, a “separate return” under § 6013. He cannot prevail because he, whether as a “separate return” filer or as a “separate return” non-filer, falls victim to § 6013(b)(2)(B). I predict the 8th Circuit will so hold.
The issue you raise has already been litigated, and the IRS no longer is willing to make that argument.
The Tax Court in Phillips v. Commissioner, 86 T.C. 443 (1986), affd. in part and revd. in part 851 F.2d 1492 (D.C. Cir. 1988), held that where a taxpayer did not file a return, and the IRS did not do a substitute for return, either, a taxpayer who petitions the Tax Court in response to a notice of deficiency is not limited by the rule of section 6013(b)(2)(B) and so can elect to file a joint return for the first time in Tax Court. Some years late, the Tax Court held that in similar circumstances, but where the IRS prepared a substitute MFS return, that the substitute return was a return for purposes of section 6013(b)(1)(B), thereby precluding the taxpayer from electing MFJ status while in Tax Court — and the 10th Circuit affirmed the Tax Court’s holding and reasoning. Smallridge v. Commissioner, T.C. Memo., affd. 804 F.2d 125 (10th Cir. 1986)
But, then, the in Milsap v. Commissioner, 91 T.C. 926 (1988), an en banc Tax Court overruled Smallridge, holding that a taxpayer in Tax Court could elect to file MFJ, despite the IRS’ having prepared an MFS substitute for return. The issue has not been litigated further because the IRS acquiesced in Milsap’s holding in 1991 AOD LEXIS 32.