Case Name: Muriel Heim, Petitioner, v. Commissioner of Internal Revenue, Respondent
Court: United States Tax Court
Jurisdiction: United States
Decision Date: 1956-11-08
Citations: 27 T.C. 270
Docket Number: Docket No. 55159
Parties: Muriel Heim, Petitioner, v. Commissioner of Internal Revenue, Respondent.
Judges: BRuce 7., concurs in the result.
Reporter: Reports of the Tax Court of the United States
Volume: 27
Pages: 270–278

Head Matter:
Muriel Heim, Petitioner, v. Commissioner of Internal Revenue, Respondent.
Docket No. 55159.
Filed November 8, 1956.
Fred Sorenson, Esq., for the petitioner.
Ivan L. Onnen, Esq., for the respondent.

Opinion:
OPINION.
Murdock, Judge:
The petitioner contends that she is not jointly and severally liable for any deficiency or addition to the tax based upon a joint return of herself and her husband for 1951 because she did not sign any such return, did not authorize the signing or filing of any such return on her behalf, and did not know until about a year and a half later that the return filed in her behalf for 1951 was in the form of a joint return. The Commissioner received what he had every reason to believe was a genuine joint return, he took all of his subsequent actions relying upon it as a joint return and has not proceeded against the petitioner for her failure to file a separate return for 1951. The first question is whether the return filed for 1951 is sufficient basis on which to hold the petitioner jointly and severally liable for any deficiency and addition to the tax properly determined on the basis of such a return.
No great help can be obtained from prior decisions in deciding a difficult case like this, since each such case must be decided upon its own facts and differences in the facts distinguish the cases. However, the cases establish the general principle that there can be a binding joint return even though one of the spouses has failed to sign it. "The mere fact that she [the wife] did not sign the returns is not sufficient" to show that a return filed was not a joint return. W. L. Kann, 18 T. C. 1082, 1045, affd. 210 F. 2d 247, certiorari denied 347 U. S. 967. The following is from Myrna S. Howell, 10 T. C. 859, 866, affd. 175 F. 2d 240:
The 1941 return is not signed by the petitioner. Her failure to sign that return is not alone determinative. It was held in Joseph Carroro, 29 B. T. A. 646, 650, that where a husband filed a joint return, without objection of the wife, who failed to file a separate return, it will be presumed the joint return was filed with the tacit consent of the wife.
See also Walter M. Ferguson, Jr., 14 T. C. 846; Hyman B. Stone, 22 T. C. 893, 900, appeal dismissed. Cf. Elsie S. Bour, 23 T. C. 237, 239-240.
The petitioner and her husband, during all of 1951 and at all other times material hereto, were living together as husband and wife. The tax due on a joint return of the petitioner and her husband for 1951 is substantially less than the total tax due if they had filed separate returns for that year. Her husband knew this, fully intended to file a joint return for that year, and to that end requested the petitioner to furnish his accountant with the information pertaining to her income tax liability for 1951. The petitioner knew that she was required to file an income tax return for 1951 and had no intention of failing in that duty. She furnished the required information to Salisbury but she did not sign any return for that year. Salisbury informed her at the time that he had prepared a return, had signed her name to it, and it had been sent in.
Salisbury incorporated the information furnished him by the petitioner in a joint return for the petitioner and her husband, it bore the names of the husband and of the wife, it included the income, deductions, exemptions, and credits of each, and signed to it were the names of each. The Internal Revenue Service, with which it was filed, had every reason tp believe that it was a genuine joint return and proceeded on that basis. The tax computed on that return was less than the total tax withheld from the salaries of the husband and of the petitioner. Indeed, the total tax shown on the return was little more than the total tax withheld from the petitioner. A refund of the overpayment was requested on the return, each was entitled to a part of that refund, and a check in payment of that-refund, made out to the husband and wife, was sent to them, received by them, endorsed by them, and cashed.
The petitioner testified that "my whole income tax situation was looked after by Mr. Salisbury." Salisbury testified that he told the petitioner that she and her husband should file a joint retprn for 1951' and "she was for it" and expressed no objection. She claims that she never knew until late in 1953 that the return filed in her name for 1951 had been a joint return, but the refund check should have made her aware of that fact, and on her 1952 return prepared by Salisbury at her request, signed by her, and filed on February 12, 1953, there is a statement indicating that she had filed a joint return for 1951. It is difficult to see how the petitioner could have remained ignorant until the latter part of 1953 that the only return filed in her name for 1951 was a joint return.
The record clearly shows that the petitioner knew immediately after the acts were performed that a return for her for 1951 to which Salisbury had signed her name had been filed, and she acquiesced in those acts since she made no effort to correct or change anything which had been done but was content to accept what had been done as a compliance with the law requiring the filing by her of an income tax return for 1951. She testified that she did not know that the return filed for her was a joint return, but about 3 months thereafter she observed that the check mailed to her and her husband was for a refund of taxes and was made out in the joint names of herself and of her husband. She accepted the benefits of the joint return by endorsing the check and allowing it tó be paid. It is only fair to conclude from all of the evidence in this case that the petitioner acquiesced in and gave her tacit consent to the filing of the joint return for 1951 and cannot avoid the consequences of the filing of that return.
The Commissioner, in his determination, has disallowed two deductions claimed on the joint return. The remaining deductions allowed by the Commissioner are less than the standard deduction. The Commissioner in such cases usually gives the taxpayers the benefit of the standard deduction, Harold B. Johnson, 17 T. C. 1261, 1264; Gussie P. Chapman, 14 T. C. 943, 945, affd. 191F. 2d 816, certiorari denied 343 U. S. 905, and the same thing should be done here. The petitioner has not shown that any of the other adjustments made by the Commissioner in determining the deficiency was erroneous.
The Commissioner has the burden of proof to show by clear and convincing evidence that a part of the deficiency in this case was due to fraud with intent to evade tax. He has failed to sustain that burden. He called two witnesses who testified that they paid some cash to Russell, but the Commissioner failed to show clearly and convincingly that any cash was received from that source or, if received, that it was not reported on the joint return. The parties stipulated "that a waiver of restrictions was presented to Dr. Heim while he was serving time in federal prison and that he did sign it and that in legal effect on the face of it, it constitutes an admission that he owes the tax and is liable for penalties." Russell testified that he signed the document in the belief that it would enable him to apply for a parole at the end of one-third of his sentence. The evidence in regard to the waiver does not properly sustain the Commissioner's burden of proving by clear and convincing evidence that a part of the deficiency was due to fraud with intent to evade tax in the circumstances of this case. His testimony in this case does not indicate that a part of the deficiency was due to fraud with intent to evade tax.
Reviewed by the Court.
Decision will be entered u/nder Bule 50.
BRuce 7., concurs in the result.