                             T.C. Memo. 2015-199



                        UNITED STATES TAX COURT



        BRADLEY C. REIFLER AND NANCY REIFLER, Petitioners v.
         COMMISSIONER OF INTERNAL REVENUE, Respondent



      Docket No. 18082-10.                       Filed October 13, 2015.



      Kevin M. Flynn, for petitioners.

      Carina J. Campobasso and Erika B. Cormier, for respondent.



           MEMORANDUM FINDINGS OF FACT AND OPINION


      LARO, Judge: Petitioners petitioned the Court to redetermine deficiencies

respondent determined in their Federal income tax for years 2000 through 2005 as
                                           -2-

[*2] well as accuracy-related penalties under section 6662 and additions to tax

under section 6651(a)(1) and (2)1 as follows:

                                 Additions to tax           Accuracy-related penalties
                              Sec.             Sec.          Sec.               Sec.
   Year     Deficiency     6651(a)(1)       6651(a)(2)      6662(a)            6662(h)
  2000      $4,215,759    $905,546.56     $1,006,162.85   $159,514.40      $1,367,274.80


  2001       2,697,054        ---                ---       110,458.40         857,904.80


  2002       1,665,561        ---                ---        67,699.40         392,000.00


  2003       1,126,931      37,135.44        206,308.00   225,290.00               ---


  2004        914,120         ---                ---      147,353.40            70,941.20


  2005       1,092,913        ---                ---      182,072.40            73,020.40

      The parties filed two stipulations of settled issues which resolved all the

issues raised in the notice of deficiency except for the applicability of the

additions to tax under section 6651(a)(1) (failure to timely file) for the 2000 and




      1
        Unless otherwise indicated, section references are to the Internal Revenue
Code (Code) in effect for the years in issue. Rule references are to the Tax Court
Rules of Practice and Procedure, and dollar amounts are rounded to the nearest
dollar.
                                         -3-

[*3] 2003 tax years.2 At trial petitioners conceded the applicability of the addition

to tax for the 2003 tax year.

      We decide the following issues:

      1. whether a purported joint Federal income tax return for the 2000 tax year

that included the signature of Mr. Reifler but not of Mrs. Reifler was a valid tax

return.3 We hold it was not;

      2. whether petitioners are liable for the addition to tax under section

6651(a)(1) for the delay in filing their Federal income tax return for the 2000 tax

year. We hold they are.


      2
        Petitioners raised two additional issues in the petition: (1) the expiration of
the period of limitations on assessment for the 2000 through 2005 tax years, and
(2) petitioner Nancy Reifler’s claim for relief from joint and several liability under
sec. 6015(b) and (f). The issue of the expiration of the period of limitations on
assessment for the 2000 tax year was resolved in respondent’s favor by this
Court’s opinion in Reifler v. Commissioner, T.C. Memo. 2013-258. Petitioners
decided not to pursue and did not put on any evidence regarding the expiration of
the period of limitations on assessment for the 2001 through 2005 tax years. Mrs.
Reifler decided not to pursue and did not put on any evidence regarding the claim
for relief from joint and several liability that she raised in the petition.
Accordingly, these issues are deemed conceded.
      3
        We note that the issue of the validity of petitioners’ 2000 Federal income
tax return has been discussed in Reifler v. Commissioner, T.C. Memo. 2013-258,
but the issue has not been resolved by this Court. The Court in Reifler discussed
the validity of a tax return under the doctrines of substantial compliance and tacit
consent for the period of limitations purposes but did not rule on their applicability
to the case at hand. Instead, the Court resolved the period of limitations issue
under the equitable estoppel doctrine. Id.
                                         -4-

[*4]                           FINDINGS OF FACT

       Some of the facts have been stipulated. The stipulations of fact and the

facts drawn from stipulated exhibits are incorporated herein, and we find those

facts accordingly. Petitioners resided in New York when the petition was timely

filed. Absent a stipulation to the contrary, an appeal of this case would lie in the

Court of Appeals for the Second Circuit.

I.     Preparation and Filing of Petitioners’ 2000 Federal Income Tax Return

       Petitioners, Bradley C. Reifler and Nancy Reifler, have been married since

1988. Throughout the marriage petitioners developed certain procedures for

handling family financial, business, and tax matters. Mr. Reifler had significant

business experience. After graduating from college he started a commodity

trading firm, Reifler Trading Group, and later a sell-side broker dealer, Pali

Capital, offering differentiated packaging of investment strategies for the hedge

fund community. Mrs. Reifler was also involved in several businesses, including

Sky Blue Farm, Inc., and Studio U, LLC. Petitioners retained a certified public

accountant, David Meyrowitz, and his firm at the time, Levine, Levine &

Meyrowitz, to prepare their Federal and State income tax returns. Mr. Meyrowitz

assisted petitioners in their tax return preparation for many years both before and

after 2000.
                                          -5-

[*5] Mr. Meyrowitz, on petitioners’ behalf, requested and obtained from

respondent extensions of time to file their 2000 joint Federal income tax return

(original return or original 2000 return) until October 15, 2001.

      Consistent with petitioners’ practice since their marriage, the original 2000

return shows petitioners’ selection of “married filing jointly” as their filing status

and includes income from activities in which both participated. Mrs. Reifler

testified that she relied on Mr. Reifler to handle the family financial and tax

matters, including preparation and filing of tax returns. Mrs. Reifler also testified

that she intended to file a joint return for 2000.

      Petitioners followed their usual procedures for preparing and signing the

original 2000 return. Mr. Meyrowitz signed and dated the original 2000 return

and sent it to petitioners on or about October 9, 2001. Mr. Reifler signed the

original 2000 return, took it home, and placed it in a bin where he usually placed

documents that required his spouse’s signature. The next morning Mr. Reifler

took the original 2000 return back to his office and mailed it to respondent’s

Andover, Massachusetts, Service Center (Andover Service Center). The reason

Mrs. Reifler did not sign the original return is not known. There was no date next

to Mr. Reifler’s signature. Mr. Reifler testified he does not recall checking for his

wife’s signature before mailing the original 2000 return.
                                        -6-

[*6] Sometime after the Andover Service Center received the original 2000

return, respondent returned it to petitioners. The Internal Revenue Manual (IRM)

requires the examining agent to perform certain actions before sending a return

back to a taxpayer. See IRM pt. 3.11.3.6.2.1 (Jan. 1, 2001). The examining agent

must attach certain forms explaining to the taxpayer why the return is being sent

back, what needs to be done with respect to the tax return, and when is the

deadline to comply and resubmit the return. Id.

      Petitioners claim they received a date-stamped original 2000 return with

some red ink marks on it but did not receive any attached correspondence. The

date on the stamp was October 15, 2001. Neither Mr. Reifler nor Mr. Meyrowitz

could recall discussing any correspondence related to the original return.4

      Mr. Reifler explained that he was not alarmed to have received back the

original tax return with some red ink marks on it because he requested copies of

his tax returns from time to time for various business reasons. Specifically, Mr.

Reifler claimed that near the end of 2001 he needed a copy of his tax return to

submit to the European American Bank (EURAM) because he was joining the

EURAM’s board of directors as of January 2002.

      4
       At trial Mr. Reifler testified that he relied heavily on Mr. Meyrowitz’ tax
expertise. Petitioners usually consulted with Mr. Meyrowitz when it came to
correspondence with tax authorities.
                                        -7-

[*7] Petitioners did not subsequently send the original return back to the

Andover Service Center.

II.     The Second 2000 Return

        On July 29, 2002, respondent issued a taxpayer delinquency notice to

petitioners, informing them that he had not received their 2000 Federal income tax

return. On August 25, 2002, after petitioners discussed the delinquency notice

with Mr. Meyrowitz, they signed a second Form 1040, U.S. Individual Income Tax

Return, and supporting schedules, stated August 25, 2002, as the date of signing,

and sent it to the Andover Service Center (second 2000 return). Petitioners

maintain that this was merely a copy of the original return, but they did not include

any correspondence with the second 2000 return explaining their position to

respondent. As a result, respondent treated the second 2000 return as petitioners’

original Federal income tax return for 2000 with a filing date of September 2,

2002.

III.    Petitioners’ Subsequent Treatment of the Original 2000 Return

        On April 29, 2004, respondent commenced an audit of petitioners’ returns

for the years 2000 through 2005. Petitioners consented several times to extensions

of the period of limitations with respect to the 2000 tax year.
                                         -8-

[*8] On July 1, 2005, Mr. Meyrowitz sent a letter to respondent notifying him

that petitioners considered the original 2000 return as the return triggering the

running of the period of limitations for the 2000 tax year. This was the first time

the issue of the original 2000 return’s submission date and validity came up.5

      Respondent issued the notice of deficiency to petitioners on May 17, 2010,

before the expiration of the last extension.

      Petitioners had possession and control of the original 2000 return at all

times before trial. At trial petitioners introduced the original return and signature

pages into evidence as Exhibits 16-P and 17-P. Mr. Reifler admitted in an

affidavit dated November 2, 2011, that he had made certain alterations to the

original return. The alterations included covering red ink marks on the original

return in opaquing liquid, making a copy of page 2, and asking Mrs. Reifler to

sign the copy of page 2. Mr. Reifler separately kept the original of page 2 and

attached a copy signed by Mrs. Reifler to the rest of the return that had been sent

back to petitioners by the Andover Service Center. Mr. Reifler likely made the




      5
        The Court held in Reifler v. Commissioner, T.C. Memo. 2013-258, in favor
of respondent on the period of limitations issue. The opinion discussed the
validity of the original 2000 return but resolved the matter on equitable estoppel
grounds.
                                        -9-

[*9] alterations shortly after the Andover Service Center sent the original 2000

return back to him.6

                                     OPINION

I.    Burden of Proof

      In general, the taxpayer bears the burden of proof except as otherwise

provided by statute or determined by the Court. Rule 142(a)(1). The

Commissioner has the burden of production with respect to the liability of an

individual for an addition to tax under section 6651(a)(1). See sec. 7491(c); see

also Rule 142(a)(1) (the Commissioner bears the burden of proof as to his

allegation in the answer concerning the increase in the section 6651(a)(1) addition

to tax). The burden of showing reasonable cause under section 6651(a) remains

on the taxpayer. See Higbee v. Commissioner, 116 T.C. 438, 446-448 (2001).

II.   Validity of the Original 2000 Return That Lacked Mrs. Reifler’s Signature

      A.     Signature Requirement Overview

      This case is about taxpayers who filed a purported joint Federal income tax

return lacking the signature of one of them.


      6
        The alleged reason for making the alterations is that Mr. Reifler needed “a
return that included my wife’s signature, for some purpose having nothing to do
with the IRS. It may have been to secure a line of credit or for purposes of
business financing, or for some other business reason.”
                                        - 10 -

[*10] Section 6011 grants the Commissioner authority to develop forms and

regulations for filing tax returns and requires taxpayers to comply with those

forms and regulations. See sec. 6011(a); sec. 1.6011-1(b), Income Tax Regs.

Further, section 6061(a) provides that any return or other document required to be

made under any provision of the internal revenue laws or regulations must be

signed. Regulations require signatures of both spouses on a joint tax return.7 Sec.

1.6012-1(a)(5), Income Tax Regs. Form 1040 for the 2000 tax year provides

space for signatures of both spouses and states in part: “If a joint return, both must

sign.” Instructions for the 2000 Form 1040 include the same requirement and

      7
        There are two exceptions to this general rule. First, a spouse may sign a
return on behalf of the other spouse if he or she acts as an agent of a spouse and
complies with the requirements of sec. 6012-1(a)(5), Income Tax Regs. Whenever
a return is made by an agent, it must be accompanied by a power of attorney
authorizing the agent to represent his principal in making, executing, or filing the
return. Id. This exception does not apply under the facts of this case because
there is no evidence in the record that Mrs. Reifler ever executed a power of
attorney granting Mr. Reifler the authority to sign tax returns on her behalf. The
original 2000 return did not include a power of attorney. The second exception
applies in cases where one spouse is physically unable by reason of disease or
injury to sign a joint return. Id. In such cases, the other spouse may with the oral
consent of the one who is incapacitated, sign the incapacitated spouse’s name in
the proper place on the return followed by the words “By __________ Husband
(or Wife)” and by the signature of the signing spouse in his or her own right. A
declaration of the nonsigning spouse must be attached to such a tax return
explaining the circumstances preventing the spouse from signing the return.
Again, this exception is not applicable in the case before us because there is no
evidence that Mrs. Reifler was absent from the country or incapacitated such that
she could not sign the tax return in October 2001.
                                        - 11 -

[*11] unequivocally warn that a Form 1040 is not considered a valid tax return

unless signed by a taxpayer. See Instructions for 2000 Form 1040, p. 52.8

      Signatures on a tax return not only verify that a return has indeed been filed

by the person indicated on the front page of a Form 1040 but also certify that all

the statements in the tax return are made under penalty of perjury and are true,

correct, and complete to the best of the taxpayer’s knowledge. See sec. 6065;

2000 Form 1040, p. 2.

      Petitioners advance two theories in support of their claim that the original

2000 return was a valid and timely filed joint Federal income tax return despite the

lack of Mrs. Reifler’s signature.9 The first theory, the so-called substantial

compliance doctrine, stands for the idea that a tax return need not be perfect to be

valid. See, e.g., Badaracco v. Commissioner, 464 U.S. 386, 397 (1984);



      8
        We take judicial notice of these instructions pursuant to Fed. R. of Evid.
201, at the request of respondent. Instructions are publicly available on the
Internal Revenue Service (IRS) Web site, and the text of instructions is not subject
to reasonable dispute.
      9
        At trial the Court raised the question whether the October 2001 return
might be a valid separate return of Mr. Reifler. Petitioners’ counsel referred to
this colloquy in their opening brief but did not pursue this possibility (nor explain
the consequence, if any, on petitioners’ liability for the addition to tax under sec.
6651(a)(1)), urging instead “that a valid joint Form 1040 was filed by both Mr.
and Mrs. Reifler on October 15, 2001.” We therefore do not address the
possibility that the original 2000 return is a valid separate return.
                                         - 12 -

[*12] Zellerbach Paper Co. v. Helvering, 293 U.S. 172, 180 (1934); Florsheim

Bros. Drygoods Co. v. United States, 280 U.S. 453, 459-460 (1930). The second

theory, the tacit consent doctrine, is a narrowly tailored exception to the

requirement that both spouses sign a joint tax return. Reifler v. Commissioner,

T.C. Memo. 2013-258. Courts use it mostly in situations where one of the spouses

signs a return for the other, and the other spouse later disputes the issue of joint

and several liability for the deficiencies and penalties arising out of a purportedly

joint tax return. Id. We hold that neither of these theories applies here. The

original 2000 return received and stamped by the Andover Service Center on

October 15, 2001, was not a valid and timely filed joint Federal income tax return

because it lacked Mrs. Reifler’s signature.

      B.     Substantial Compliance Doctrine

      Petitioners contend that caselaw has significantly changed the apparently

compulsory language of the Code with respect to compliance with tax return

requirements. Indeed, in Florsheim Bros. Drygoods Co., 280 U.S. at 459-460, the

Supreme Court in dicta mentioned that tax returns may be imperfect and contain

mistakes. In Zellerbach Paper Co. v. Helvering, 293 U.S. at 180, Justice Cardozo,

speaking for the Court, stated that even though at the time of filing the omissions

and inaccuracies in a return were such as to require an amendment, if a return
                                         - 13 -

[*13] “purports to be a return, is sworn to as such * * * and evinces an honest and

genuine endeavor to satisfy the law” it will be saved from nullity. Another

Supreme Court case, Badaracco v. Commissioner, 464 U.S. at 397, confirmed that

even a fraudulent return could be sufficient to trigger the running of the period of

limitations if, on its face, such a return meets the Zellerbach test.

      Yet petitioners’ reliance on Florsheim, Zellerbach, and the substantial

compliance doctrine is misplaced. This Court in Beard v. Commissioner, 82 T.C.

766, 777 (1984), aff’d per curiam, 793 F.2d 139 (6th Cir. 1986), clarified the

elements of the Supreme Court test in Florsheim to determine whether the filing of

a document is sufficient to trigger the running of the period of limitations and for

the purpose of section 6651(a)(1). The Beard test includes four distinct elements,

one of which is a requirement that a taxpayer execute the return under penalties of

perjury. Id. Other elements of the Beard test are: (1) the return must have

sufficient data to calculate tax liability; (2) the document must purport to be a

return; and (3) there must be an honest and reasonable attempt to satisfy the

requirements of the tax law. Id.

      Petitioners argue that under the substantial compliance doctrine their

original 2000 return was valid because it met all of the requirements of the Beard

test except being signed by Mrs. Reifler. Respondent contends that the lack of a
                                          - 14 -

[*14] signature on the original 2000 return is fatal to finding it valid under the

Beard test. We agree with respondent. Signature under penalty of perjury and an

honest and reasonable attempt to satisfy the requirements of the tax law are two

distinct and separate requirements under Beard.

      The general rule in the Second Circuit is that an unsigned return does not

start the running of the period of limitations. Kalb v. United States, 505 F.2d 506,

508 (2d Cir. 1974) (citing Lucas v. Pilliod Lumber Co., 281 U.S. 245, 248-249

(1930), holding that a return unverified by oath did not meet the plain

requirements of the statute). Other Courts of Appeals and this Court follow the

same rule. See, e.g., Olpin v. Commissioner, 270 F.3d 1297, 1300 (10th Cir.

2001) (“The general rule when a tax return is unsigned is that it is invalid.”), aff’g

T.C. Memo. 1999-426; Bachner v. Commissioner, 81 F.3d 1274, 1280 (3d Cir.

1996) (“[I]nclusion of the taxpayer’s signature is a prerequisite to the validity of

the tax return for purposes of the statute of limitations.”), remanding 109 T.C. 125

(1997); Shea v. Commissioner, 780 F.2d 561, 568 (6th Cir. 1986) (“[F]ailure of

either party to sign the return * * * renders it invalid[.]”), aff’g in part, rev’g in

part T.C. Memo. 1984-310; Brafman v. United States, 384 F.2d 863, 868 (5th Cir.

1967) (stating that the Code requires tax returns to be signed in order to be

effective); Doll v. Commissioner, 358 F.2d 713, 714 (3d Cir. 1966) (“return failed
                                         - 15 -

[*15] to meet the requirements of the statute” where neither taxpayer signed), aff’g

T.C. Memo. 1965-191; Elliott v. Commissioner, 113 T.C. 125, 128 (1999)

(“Failure to satisfy the requirements for filing a return is fatal to the validity and

the timeliness of the return.”).

      An invalid return remains invalid even if the IRS accepts and processes it.

See, e.g., Olpin v. Commissioner, 270 F.3d at 1301 (“[A]cceptance cannot cure an

invalid return.”); Downing v. Commissioner, T.C. Memo. 2007-291, slip op. at 26

(holding IRS’ acceptance of return and payment “would not waive the statutory

requirements for a valid return”); Julicher v. Commissioner, T.C. Memo. 2002-55,

slip op. at 37 (“[T]he signature requirement for purposes of a valid joint return

may not be waived by Internal Revenue Service personnel.”).

       As this Court noted in Beard, the requirements for a return to trigger the

running of the period of limitations are the same as those for the purpose of a

section 6651(a)(1) analysis. Beard v. Commissioner, 82 T.C. at 777. Thus,

signatures of both petitioners on the original 2000 return were necessary to meet

the validity requirements for section 6651(a)(1) purposes.

      Petitioners point to two cases, Blount v. Commissioner, 86 T.C. 383 (1986),

and White v. Commissioner, T.C. Summary Opinion 2002-101, to persuade this
                                        - 16 -

[*16] Court we should apply the substantial compliance doctrine in the current

case. Both cases are distinguishable from the case before us.

      In Blount, the Commissioner returned the income tax return to the taxpayer

with a request to attach a missing Form W-2, Wage and Tax Statement, and

re-send the return. See Blount v. Commissioner, 86 T.C. at 385. The return itself

had been signed by the taxpayer and thus complied with the Beard requirements

on its face. Id. The taxpayer in Blount promptly sent his return with all the

requested documents back to the IRS within the stated deadline. Id. The Court

held that despite the omission of Form W-2, the taxpayer had filed the return

timely. Id. at 387-388. In contrast, in the case before us, petitioners’ original

2000 return had not been signed by one of the spouses and was not returned to the

Andover Service Center until its resubmission in September 2002.

      White v. Commissioner, T.C. Summary Opinion 2002-101, is

distinguishable, too.10 In White, a married taxpayer submitted a tax return that

was not signed by his spouse and was missing a Form W-2. Id. The

Commissioner sent the return back to the taxpayer with instructions to correct the

defects, and the taxpayer then resubmitted the return within the time provided by

      10
        Sec. 7463(b) precludes Summary Opinions from being treated as precedent
in other cases, but this Court’s Rules do not prohibit citations of Summary
Opinions to the extent they are persuasive.
                                         - 17 -

[*17] the Commissioner. This Court did not impose an addition to tax under

section 6651(a)(1) because the Commissioner conceded the issue of the validity of

the taxpayer’s joint tax return that did not have one spouse’s signature. The initial

return was deemed to be filed timely. In this Court, the issue of whether a joint tax

return is valid with only one spouse’s signature has not been litigated or decided.

We also note that the Commissioner’s concession of an issue in a case, especially

a Tax Court case resulting in a nonprecedential Summary Opinion, does not bind

him for future cases as opposed to a position taken by the Commissioner in a

revenue ruling or other form of official public guidance. See Dover Corp. & Subs.

v. Commissioner, 122 T.C. 324, 350 (2004); Rauenhorst v. Commissioner, 119

T.C. 157, 170-173 (2002); see also IBM Corp. v. United States, 343 F.2d 914, 919

(Ct. Cl. 1965) (stating that, as a general rule, a taxpayer “can never avoid liability

for a proper tax by showing that others have been treated generously, leniently, or

erroneously by the Internal Revenue Service”).

      Tax law is complex and confusing to most of us. Sometimes it is

appropriate for the courts to clarify the subtleties of statutory and regulatory

provisions. The requirement of a signature on a tax return, however, is not one of

those issues. It would be inappropriate for this Court to use its power to create a

potentially unlimited exception to a well-established and fairly simple rule. It
                                         - 18 -

[*18] would also be contrary to the principles stated in Beard, Lucas, Kalb, and

other cases.

      The substantial compliance doctrine indeed allows a taxpayer to file a return

that may contain some inaccuracies and mistakes as long as an honest and

reasonable attempt to comply with the tax law requirements has been made. But,

as clarified in Beard, signing a return under penalty of perjury is a separate and

distinct requirement that has not been met in this case.11 The substantial

compliance doctrine is not intended and should not be used to justify a failure to

comply with simple and clear requirements. The history of the doctrine and the

policy behind it do not support the finding that the substantial compliance doctrine

is applicable in this case.

      C.       Tacit Consent Doctrine

      In their second argument in support of the validity of the original 2000

return, petitioners contend that “[i]t is well-established by a long line of cases that

a joint Form 1040 filed with the signature of only one spouse is valid if both the

husband and wife intended to file a joint return.” (Citations omitted.) Petitioners

      11
         The IRS has extensive procedures for handling unsigned tax returns. See,
e.g., Internal Revenue Manual pt. 3.11.3.6.2.1 (Jan. 1, 2001). Normally, even the
Commissioner’s sending back a joint tax return to a taxpayer to sign or provide
some supplemental information does not materially prejudice taxpayers. This is a
rather taxpayer-friendly regime allowing some room for occasional oversight.
                                        - 19 -

[*19] argue that they are entitled to a finding that the original 2000 return is valid

without the signature of Mrs. Reifler under the tacit consent doctrine because they

intended to file a joint tax return. Mrs. Reifler stated in an affidavit dated May 16,

2012, that she relied on her husband to handle the family tax matters and

acquiesced to the filing of the original 2000 return. Respondent argues that the

tacit consent doctrine is relevant only to the issue of determining whether the

spouses are jointly and severally liable for the income tax return that they intended

to file jointly but has no bearing on the question of whether a Form 1040 signed by

one spouse but not the other is an income tax return within the meaning of sections

6011, 6061(a), and 6651(a).

      We find petitioners’ arguments unpersuasive. At the outset of our

discussion of the tacit consent doctrine, we note that courts generally apply this

doctrine when one spouse signs a joint return for both spouses and it is later

shown that the other spouse has tacitly consented to the joint return filing. Reifler

v. Commissioner, T.C. Memo. 2013-258, at *15. Most of the cases that petitioners

cite follow this general pattern. See, e.g., Heim v. Commissioner, 251 F.2d 44

(8th Cir. 1958) (return included both signatures, but it was later discovered that it

was the family accountant who had signed the wife’s name on the return per her

phone instructions; court held the tax return was joint), aff’g 27 T.C. 270 (1956);
                                        - 20 -

[*20] Estate of Campbell v. Commissioner, 56 T.C. 1 (1971) (stating that husband

signed a joint return for both his wife and himself; wife never objected to this

practice; Court held the tax return was joint); Federbush v. Commissioner, 34 T.C.

740 (1960) (husband signed a joint return both for himself and wife at a time when

they had personal difficulties and wife refused to sign; Court held the

Commissioner correctly determined the return was a joint return when the

taxpayers failed to provide evidence to the contrary), aff’d, 325 F.2d 1 (2d Cir.

1963); Presley v. Commissioner, T.C. Memo. 1979-339 (husband signed the

wife’s name on a joint tax return after securing her oral permission to do so; Court

held the return was joint); Simms v. Commissioner, T.C. Memo. 1968-298

(husband signed a joint tax return for himself and wife; at trial wife tried to assert

that she did not sign the tax return and should not be liable for any deficiencies,

but failed to meet the burden of proof; Court held tax return was joint), aff’d per

curiam, 422 F.2d 340 (4th Cir. 1970).

      The facts in the cases that petitioners cite are distinguishable from their own

situation. In Heim, Campbell, Federbush, Presley, and Simms, the Commissioner

asserted joint and several liability on the basis of returns that were purportedly
                                        - 21 -

[*21] signed by both spouses.12 In the current case, there was only Mr. Reifler’s

signature on the original 2000 return, not Mrs. Reifler’s. Unlike the circumstances

in the cases cited above, the Andover Service Center never accepted petitioners’

original 2000 return for processing and filing. Instead, the Andover Service

Center followed instructions existing at the time and sent the return back to

petitioners for them to correct the defects.

      Another case from the Court of Appeals for the Second Circuit that

petitioners cite, O’Connor v. Commissioner, 412 F.2d 304 (2d Cir. 1969), aff’g in

part, rev’g in part T.C. Memo. 1967-174, is inapposite and illustrates the

limitations of the tacit consent doctrine. In O’Connor v. Commissioner, 412 F.2d

at 309, the Court of Appeals stated that the absence of a wife’s signature on the

return “removes the presumption of correctness ordinarily attaching to the

Commissioner’s determination of jointness.” When there is no second signature

on the tax return, the burden of producing additional evidence on the issue shifts

to the Commissioner. Id. Because the Tax Court’s findings of facts are reviewed

by appellate courts for clear error, the Court of Appeals in O’Connor deferred to


      12
         We note that such returns would also be sufficient under the Beard test on
their face. They would also pass the initial inquiry as to their validity under
Badaracco v. Commissioner, 464 U.S. 386 (1984), and Zellerbach Paper Co. v.
Helvering, 293 U.S. 172 (1934).
                                        - 22 -

[*22] the Tax Court’s determination that there was sufficient evidence in the

record to support a finding of a joint tax return. Id. In the current case,

respondent never suggested that the original 2000 return was a valid joint tax

return and did not try to use the tacit consent doctrine to his advantage. To the

contrary, the Andover Service Center rejected the original 2000 return because it

lacked one spouse’s signature and sent it back to petitioners. Thus, the facts in

this case are distinguishable from the situation in O’Connor, where the

Commissioner accepted the return for filing.

      In Downing v. Commissioner, T.C. Memo. 2007-291, another case that

petitioners cite to support their position, the taxpayer failed to produce any

evidence showing that he and his wife ever filed a return for 1995. The versions

of what purported to be the tax return offered by the taxpayer did not have the

signature of his wife; they had only the signatures of the taxpayer and the family

accountant. Id., slip op. at 24-25. Under the circumstances, the Court held that

the taxpayer failed to show he filed a valid joint tax return and did not decide

whether the tacit consent doctrine applied to the facts of the case. Id.

      We observe the sincerity, candor, and demeanor of each witness to evaluate

his testimony and to assign weight thereto for the purpose of finding disputed

facts. HIE Holdings, Inc. v. Commissioner, T.C. Memo. 2009-130, aff’d, 521 F.
                                        - 23 -

[*23] App’x 602 (9th Cir. 2013). We will not accept the testimony of a witness at

face value if we find that the totality of the facts conveys to us an impression that

is contrary to the witnesses’ testimony. Neonatology Assocs., P.A. v.

Commissioner, 115 T.C. 43, 84 (2000), aff’d, 299 F.3d 221 (3d Cir. 2002).

      Going back to the facts of the current case, Mrs. Reifler testified that she

trusted her husband to take care of the financial and tax matters and intended to

file a joint return with him for the 2000 tax year. Yet there is no adequate

explanation in the record as to why the regular procedures petitioners had

followed for many years--and which had worked well for them before and after

2000--did not work for the 2000 tax year. It is also not clear from the record why

Mr. Reifler, a sophisticated businessman, did not check for Mrs. Reifler’s

signature before mailing in the original 2000 return. Petitioners do not recall

whether they discussed the original 2000 return or whether Mr. Reifler ever asked

Mrs. Reifler to sign it.

      We also find that the subsequent alterations Mr. Reifler made to the original

2000 return, including making a copy of the second page and asking Mrs. Reifler

to sign it, indicate that he was aware of the defect in the original 2000 return and

its potential significance. We note that petitioners made these alterations soon

after receiving the original 2000 return back from the Andover Service Center.
                                         - 24 -

[*24] The record, however, does not provide any explanation as to why Mr.

Reifler did not ask Mrs. Reifler to put her signature on page 2 of the original 2000

return and instead asked her to sign a copy. There is also no explanation why

petitioners did not produce the original 2000 return in response to the notice of

delinquency in 2002. Instead, petitioners executed a clean return, dated it, and

sent it to the Andover Service Center.

       In sum, petitioners’ actions after they received the original 2000 return back

from the Andover Service Center seem inconsistent and illogical in the light of

their later testimony that in October 2001 they desired and intended to file a joint

return.13

       We find that the facts surrounding both the signing and submitting of the

original 2000 return contain too many blanks to preclude the existence of

alternative explanations as to the absence of Mrs. Reifler’s signature on the

original 2000 return. Silence does not necessarily mean “yes”. There may be

numerous reasons a spouse fails to sign a joint tax return, ranging from oversight


       13
         Both the original return and the second 2000 return showed a net loss of
over $1 million. Petitioners did not claim a refund, but it was still in their best
interest to perfect the return and mail it back to the Andover Service Center as
soon as possible. Yet petitioners’ lack of action in this respect leaves us with too
many unanswered questions. Under the circumstances, we cannot take petitioners’
self-serving testimony at face value.
                                           - 25 -

[*25] to express refusal to file a joint return. We are reluctant to extend the

reasoning from the cases discussing valid on their face tax returns purportedly

signed by both taxpayers to situations when one of the required signatures is

missing. This would place a high administrative burden both on the

Commissioner and on the courts, making us play the guessing game every time we

see a purported joint return signed by only one spouse. Although some evidence

may weigh in favor of finding that petitioners intended to file a joint return,14 we

find it insufficient in the light of gaps in the record and subsequent treatment of

the original 2000 return by petitioners.

      Extending the application of the tacit consent doctrine to cases such as the

current case has the potential of creating an exception that would swallow the rule.

We believe sufficient administrative mechanisms are already in place to deal with

such situations. Existing procedures described in the regulations and the IRM

provide how to handle documents when one of two required signatures is missing.

At the very least, a nonsigning spouse who did not intend to file a joint return may

be alerted that something is wrong. Existing regulations also provide an option for


      14
        Mrs. Reifler affirmed several times that she intended to file a joint tax
return for 2000, as in prior and subsequent years. The return included information
on businesses Mrs. Reifler was actively involved in (Sky Blue Farm, Inc., and
Studio U, LLC). Mrs. Reifler did not file a separate return for 2000.
                                          - 26 -

[*26] more “traditional” families like the Reiflers.15 If a spouse wants to delegate

his or her authority to sign a joint tax return to another spouse, section 1.6012-

1(a)(5), Income Tax Regs., provides procedures to designate that spouse as an

agent.

         Petitioners’ argument that it is the intent of the spouses that counts when it

comes to filing tax returns is somewhat tempting in that it would allow us to

resolve the case before us easily. However, as discussed above, a signature under

penalty of perjury has additional significance when it comes to determining the

issue of liability for any unpaid taxes or related penalties. It would be unfair to

expose a nonsigning spouse who never intended to sign a joint tax return to the

burdens of litigation that could span many years when that spouse did not in fact

attest to the veracity of the statements on the tax return. We believe the intent to

file a joint return is different from signing a document under penalty of perjury,

and the two do not supplement or replace each other. Using the tacit consent

doctrine in cases when a tax return is rejected by the Commissioner for lack of

compliance with the most basic requirements would only create chaos.




         15
       We use the word “traditional” in the sense petitioners used it in their
pleadings to describe their family relationship.
                                         - 27 -

[*27] D.     Conclusion

       We hold that petitioners did not timely file a valid joint tax return on

October 15, 2001, because the return filed with the Andover Service Center lacked

one of the essential--and easiest to satisfy--requirements for a valid joint tax

return, the signatures of both spouses. Petitioners’ reliance on the substantial

compliance and tacit consent doctrines is misplaced, as neither doctrine supplants

or waives the requirement for a signature under penalty of perjury contained in the

Code, the regulations, and almost a century of caselaw. It is in the province of

Congress to promulgate new laws, and it is in the province of the Secretary to

adopt new regulations implementing provisions of the Code. Should Congress or

the Secretary deem one signature to be sufficient for a valid joint tax return, this

Court will follow the new rule. Until then, signatures of both spouses will be

required for a valid joint tax return.

III.   Addition to Tax Under Section 6651(a)(1) for Failure To Timely File the
       2000 Tax Return

       A.    Overview of Section 6651(a)(1)

       Section 6651(a)(1) imposes an addition to tax for failure to timely file a

return when due “unless it is shown that such failure is due to reasonable cause
                                         - 28 -

[*28] and not due to willful neglect”. The addition equals 5% for each month that

the tax return is late, not to exceed 25% in total.

      “Reasonable cause” requires the taxpayer to demonstrate that he exercised

ordinary business care and prudence and nevertheless was unable to file his or her

Federal income tax return by the due date. See United States v. Boyle, 469 U.S.

241, 246 (1985); sec. 301.6651-1(c), Proced. & Admin. Regs. Willful neglect is

defined as a “conscious, intentional failure or reckless indifference.” Boyle, 496

U.S. at 245.

      Petitioners maintain they acted with reasonable cause and without willful

neglect with respect to the preparation and filing of their joint return for the 2000

tax year. Petitioners indeed followed all their regular procedures in preparing and

mailing the original 2000 return. Our decision in this case, however, hinges on

whether petitioners exercised ordinary business care and prudence in handling the

original 2000 return when the Andover Service Center sent it back.

      Petitioners maintain they did not receive any correspondence attached to the

original 2000 return explaining what they needed to fix in their tax return. Neither

petitioners nor their accountant, Mr. Meyrowitz, have any memory of receiving or

discussing any correspondence related to the original 2000 return. Petitioners and

Mr. Meyrowitz testified that the first time they learned about respondent’s having
                                         - 29 -

[*29] no record of their 2000 income tax return filing was when they received a

notice of delinquency in 2002.

      Thereafter, Mr. Meyrowitz printed out a copy of petitioners’ 2000 return

from his files, signed it, and instructed petitioners to sign and mail it to the

Andover Service Center. Petitioners mailed this second 2000 return on or about

August 25, 2002. Neither petitioners nor Mr. Meyrowitz prepared a cover letter to

accompany the return and explain petitioners’ position.

      Respondent argues he is entitled to a presumption of administrative

regularity. See, e.g., FTC v. Owens-Corning Fiberglas Corp., 626 F.2d 966, 975

(D.C. Cir. 1980) (stating that unless contrary evidence is produced, Government

agencies are entitled to a presumption of administrative regularity and good faith).

To overcome this presumption, the person challenging it must come forward with

evidence tending to show that the mandated procedure was not followed.

Parkinson v. Commissioner, 647 F.2d 875, 876 (9th Cir. 1981), aff’g T.C. Memo.

1979-319.

      Petitioners contend that the burden of production is on respondent on the

issue of whether there was any correspondence attached to the original 2000 return

sent back to them by the Andover Service Center. Respondent maintains that,

under the presumption, we should find that the Andover Service Center properly
                                         - 30 -

[*30] followed the procedures set out in IRM pt. 3.11.3.6.2.1 (Jan. 1, 2001) by

enclosing correspondence explaining why it was returning the original 2000

return.

      We do not need to address the presumption of administrative regularity

here. Regardless of whether the Andover Service Center actually followed the

established procedures in this case, it is difficult, if not impossible, to conclude

that Mr. Reifler, a sophisticated businessman, acted with ordinary business care

and prudence when he failed to follow up with the IRS or his accountant, Mr.

Meyrowitz, as to why the original 2000 return was sent back to him with some red

ink marks on it. We find Mr. Reifler’s testimony on this issue unpersuasive.16

Petitioners have been filing tax returns for many years. Petitioners never

previously received the originals of their tax returns back. A person exercising

ordinary business care and prudence would have inquired as to the reason he or

she received a tax return back. There is no evidence on the record showing that




      16
        Mr. Reifler testified that he may have requested a copy of the tax return
from the IRS because he needed to submit it to be appointed to the board of
directors of EURAM. There is no corroborating evidence on this issue besides
Mr. Reifler’s testimony. In a supplemental affidavit dated November 2, 2011, Mr.
Reifler claimed he may have needed a “completely signed return” to secure a line
of credit or for purposes of business financing or for some other business reason.
                                        - 31 -

[*31] petitioners attempted to consult with anybody until they received a notice of

delinquency from respondent in 2002.

      As we discussed above, subsequent alterations to the original 2000 tax

return indicate petitioners knew Mrs. Reifler’s signature was missing. These

alterations also indicate petitioners understood that a tax return not signed by one

of the spouses would be insufficient for some business purposes. Yet petitioners

chose to do nothing until they received the delinquency notice. Petitioners also

chose not to provide respondent with a copy of the original 2000 return when they

sent the second 2000 return to the Andover Service Center. In our view, such

conduct does not meet the standard of ordinary business care and prudence.

      Because petitioners did not demonstrate that their failure to timely file a

Federal income tax return for the 2000 tax year was due to reasonable cause and

not willful neglect, we hold that petitioners are liable for the addition to tax under

section 6651(a)(1).

IV.   Conclusion

      We have considered all of the arguments that petitioners made, and to the

extent not discussed above, conclude that those arguments not discussed herein are

irrelevant, moot, or without merit. We have considered respondent’s arguments

only to the extent stated herein.
                                       - 32 -

[*32] To reflect the foregoing and concessions by the parties,


                                                          Decision will be entered

                                                   under Rule 155.
