A district court has held that, where a husband forged his wife's signature on their joint federal tax returns, the returns were still valid joint returns. The court said the wife never objected to his forging. How could she if she never knew about it or gave consent? How is this possible? Let’s review the case.
A little background on the law: The Internal Revenue Code provides that any return or other document required under any provision of the internal revenue laws or regulations must be signed by both spouses on a joint tax return. In fact, the IRS instructions warn that a Form 1040 is invalid unless signed by both taxpayers.
In a recent case, Alice and Phil Coggin were married until his death in 2011. On November 25, 2009, Mr. Coggin filed married-filing-jointly tax returns for the 2002 through 2007 tax years on behalf of himself and Ms. Coggin. Mr. Coggin signed Ms. Coggin's signatures on the 2002 through 2007 joint tax returns without her knowledge or consent.
Mr. Coggin was responsible for family financial matters. Ms. Coggin "assumed that [Mr. Coggin] was handling" the taxes and "trusted him to do the right thing." After his death, Ms. Coggin learned that he had signed her name on the 2002 through 2007 joint returns. She thereafter filed married-filing-separately returns for those years and sought a refund of part of the 2002 through 2007 taxes that Mr. Coggin paid.
The reasons for doing this are irrelevant to the court’s ultimate ruling. The IRS disallowed her married-filing-separately returns. The parties agreed that if the joint returns filed by Mr. Coggin were valid, then Ms. Coggin could not seek to "undo" those returns based on her later-filed separate returns. That is another rule in tax law.
The district court held that the joint returns were valid. The court said there is a limited exception to the rule requiring both signatures: when only one spouse signs a joint return, the return is valid if the non-signing spouse intended to file jointly. "The intent to file jointly may be inferred from the acquiescence of the non-signing spouse." Therefore, "where a husband files a joint return without objection of the wife, who fails to file a separate return, it will be presumed the joint return was filed with the tacit consent of the wife."
The court said that Ms. Coggin never filed a timely separate tax return, and she understood that her husband prepared and filed joint returns on her behalf. The court rules Ms. Coggin intended to file the 2002 through 2007 joint tax returns.
Ms. Coggin also argued Mr. Coggin's misrepresentation to her that she did not need to sign the 2002 through 2007 tax returns negated her consent to jointly file; she cited the innocent spouse provisions. The court said the innocent spouse exception acts only to relieve a spouse of tax liability, not to entitle a spouse to a refund. Ms. Coggin's claim was for a refund, not for relief from tax liability, and she identified no case or statute that would entitle her to a refund based on Mr. Coggin's misrepresentation. That is our experience; it is nearly impossible to successfully assert innocent spouse.
So, the next time you allow a spouse to “just sign my name” on a check or tax filing, think if there may be unintended consequences.
