Court Opinion

ID: 4488909
Source: CourtListenerOpinion
Date Created: 2020-01-17 22:01:34.175511+00
Date Added: 2024-06-11T15:03:53.492300
License: Public Domain

*466OPINION.
Littleton:
Three questions are raised in this case. (1) The petitioner claims the right to have the community income for the years 1920, 1921, and 1922 divided between himself and his wife, and accordingly to have the taxes assessed separately on his proportion. A joint return was filed by them for each of those years. This question has already been decided by the Board adversely to petitioner’s present position. R. Downes, Jr., 5 B. T. A. 1029; Joe R. Miller, 6 B. T. A. 94; J. W. Macon, 7 B. T. A. 450; G. B. Foster, 7 B. T. A. 559; Torlief Torland, 11 B. T. A. 35; Deposit Trust & Savings Bank, Executor, 11 B. T. A. 706. The action of the Commissioner on this issue is, therefore,’ approved.
(2) The petitioner makes the same claim with respect to 1923 and 1924. No returns were filed for these years, but the Commissioner, after investigation, prepared returns for these years in the same manner as in the preceding years, that is, on a joint basis, and proposed the assessment of the tax for the husband and wife to the husband, petitioner^ in this proceeding. The authority for such investigation and returns is contained in section 3176, Revised Statutes, which reads in part as follows:
If any person, corporation, company or association fails to make and file a return or list at the time prescribed by law or by regulation made under authority of law, or makes, willfully or otherwise, a false or fraudulent return or list, the collector or deputy collector shall make the return or list from his own knowledge and from such information as he can obtain through testimony or otherwise. In any such ease the Commissioner may, from his own knowledge and from such information as he can obtain through testimony or otherwise, make a return or amend any return made by a collector or deputy collector. Any return or list so made and subscribed by the Commissioner, or by a collector or deputy collector and approved by the Commissioner, shall be prima facie good and sufficient for all legal purposes.
In R. Downes, Jr., supra, we denied to the petitioner, who had filed a return on a joint basis, the right to change to a separate basis. The foundation of this decision is that under section 223, Revenue Act of 1921, a husband and wife may either file separate returns or a *467joint return and that whichever method is pursued, the return or returns filed become the return or returns recognized and required by the statute. The decision further holds that taxpayers are not permitted or required to file more than one return for a taxable year. It followed, therefore, that since the return contemplated by the statute was filed when-the joint return was filed, the Board could not recognize new returns on a separate basis as the returns required by statute.
Now, is the situation different where no return was filed by the husband or wife, but a return was filed on their behalf by the Commissioner? In other words, does the return filed by the Commissioner become the return of the husband and wife, and stand on the same basis as a return filed by the parties themselves? We think so. Not only does section 3116 provide that upon the failure of a taxpayer to make a return, the return may be made by the Commissioner from his own knowledge and from such information as he can obtain, but also that any return so made “ shall be prima facie good and sufficient for all legal purposes.” In the opinion of the Board, this provision can only mean that Congress intended that a return so filed should answer the same purposes as if filed by the parties themselves. Since these returns filed by the Commissioner have the same status as returns filed by the parties themselves, we are of the opinion that it follow's that the same considerations which led us to deny a change from a joint to the separate basis in 1920, 1921, and 1922, must likewise apply in 1923 and 1924 and prevent a similar change in these years.
This conclusion is not only not in conflict with section 1212, Revenue Act of 1926, but, on the contrary, receives support therefrom. Section 1212 reads as follows:
Income for any period before January 1, 1925, of a marital community in the income of which the wife has a vested interest as distinguished from an expectancy, shall be held to be correctly returned if returned by the spouse to whom the income belonged under the State law applicable to such marital community for such period. Any spouse who elected so to return such income shall not be entitled to any credit or refund on the ground that such income should have been returned by the other spouse.
The section is directly applicable here for the reason that the returns in question were for periods prior to November 1, 1925, and were for a marital community in Texas, where the wife has a vested interest as distinguished from an expectancy. R. W. Ramming, 6 B. T. A. 188. In R. Downes, Jr., supra, we said:
Section 1212 of the Revenue Act of 1926 does not afford the petitioner relief in this case. That section does not afford taxpayers the privilege of filing income-tax returns upon the basis of community property laws whore they did not originally file returns on such basis.
*468In view of the foregoing we must hold that the returns as filed by the Commissioner for 1923 and 1924 on a joint basis can not now be changed to a separate basis as contended for by the petitioner.
(3) The third question relates to the assertion by the Commissioner of a penalty of 25 per cent of the amount of the tax, under section 3176, Revised Statutes, for failure to file returns for 1923 and 1924. The petitioner in his brief abandons his contention with respect to this point, and we hold that the penalty may be assessed.
Reviewed by the Board.

Judgment will he entered for the respondent.