Husband Can't Sign Joint Return For Allegedly Insane WifeFebruary 15, 2017

In Moss, TC Memo 2017-30TC Memo 2017-30 (2017), the Tax Court held that a husband who alleged that his wife's mental illness led her to the delusion that she was a victim of the "Madoff fraud" could not file a return over her objection as a married filing joint status taxpayer. Since the husband had no signed power of attorney, he was barred from claiming that he filed a valid joint return with his wife as her agent. The wife had refused to sign the joint return and she filed her own return as married filing separately.

I.R.C. § 6012(b)(2), provides that when a person cannot make a return due to incapacity, "the return of such individual shall be made by a duly authorized agent, his committee, guardian, fiduciary or other person charged with the care of the person or property of such individual". Treas. Reg. § 1.6012-(a)(5) provides reasons a person may be unable to make a return include disease, illness, or continuous absence from the U.S.

Reg. § 1.6013-1(a)(2) provides that a return for a disabled person must be accompanied by the following even when there is a spouse signing:

  1. IRS Form 2848 (Power of Attorney and Declaration of Representative), or, a power of attorney authorizing the agent to represent the taxpayer in making, executing, or filing the return;

  2. A statement signed by the spouse who is signing the return confirming that the incapacitated spouse consents to the signing of the return; or

  3. 3. A request for permission from, and determination made by, the appropriate IRS district director that good cause exists for permitting an agent to submit the return. (Reg. § 1.6012-1(a)(5))

In this case, Mr. Moss filed the return and attached to it a letter stating that his wife was seriously mentally ill, that IRS should disregard all information she sent, and that the return included her income for 2008 as well as his. He did not attach any power of attorney that would authorize him to act on behalf of his wife.

While Mrs. Moss was hospitalized in 2005 and 2006and was delusional, Mr. Moss never sought official status as a conservator, holder of a power of attorney, or guardian of his wife. Since Mrs. Moss never submitted to IRS any consent for Mr. Moss to file the return for her and instead insisted on filing a separate return, his jointly filed return was rejected by the I.R.S. and the Tax Court.

The Court stated that a person's previous commitment to a hospital and a spouse's assertion of mental illness were not sufficient to invalidate an individual's right to file his or her own return. Furthermore, since he did not qualify as his wife's agent and had no power of attorney or Form 2848 and did not file a statement confirming that she consented to the signing of the return, the return was properly rejected. The court did note that in certain circumstances, a joint return may be found, even without a spouse's signature, but only if there is other evidence that the husband and wife intended to file a joint return which in this case was lacking.

Conclusion, when dealing with a taxpayer who may lack capacity, be sure to obtain a valid power of attorney or other proof of authority to sign on such person’s behalf to avoid litigation with the Internal Revenue Service.

Related Practice: Tax

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