In Uncategorized on 04/03/2018 at 16:51

I wish ex-Ch J Michael B (“Iron Mike”) Thornton had designated this one, as it’s a cautionary tale for lawyers. Even when the client comes tearing at the last red-hot minute at day’s end of Day Ninety, if there’s anything spousal in play, ask if both spouses are in.

Here’s Cardell S. Jones, Docket No. 3996-17, filed 4/3/18. But it’s not Cardell’s story, rather it’s Johnnie M. Jones; in private life she’s Mrs. Cardell.

IRS issued separate but equal SNODs to Cardell and to Johnnie. But only Cardell petitions, and Cardell’s attorney enters appearance for Cardell only. No mention of Johnnie until long after Day Ninety, when attorney moves to change caption, adding Johnnie.

Attorney claims  “Petitioner gave Counsel his Notice of Deficiency however, Counsel was not apprised of a separate Notice of Deficiency for Petitioner’s wife, Johnnie M. Jones.” Order, at p. 1.

IRS says, so sad, too bad, but Rule 41(a) prohibits any amendment that would confer jurisdiction where none had theretofore been established.

“Petitioner’s counsel asserts that because petitioner and Ms. Jones ‘are married[,] * * * own the same assets[,] and filed their tax returns jointly’, she ‘has an interest in the subject matter and not joining as an indispensable party would impede her ability to protect her interest.’ Although a husband and wife may file a joint tax return, they are treated as separate taxpayers; nothing in section 6212(b)(2) prohibits respondent from sending separate notices of deficiency even though a joint return may have been filed. See Garfinkel v. Commissioner, 67 T.C. 1028, 1030 (1977); Rodney v. Commissioner, 53 T.C. 287, 307 (1969); Dolan v. Commissioner, 44 T.C. 420, 433 (1965).” Order, at p. 2.

Now Johnnie could ratify the petition if she had been named therein to begin with and hadn’t signed.

But that doesn’t cut it here.

Ex-Ch J Iron Mike: “…this case involves not a joint notice of deficiency but separate notices of deficiency issued to petitioner and Ms. Jones. And in the light of the representation by petitioner’s counsel that he was ‘not apprised’ of any notice of deficiency having been issued to Ms. Jones when he filed the petition in this case, we do not see how he could have intended to file the petition on behalf of Ms. Jones as well as petitioner. In addition, the petition makes no mention of Ms. Jones but rather references petitioner only in the singular. In these circumstances we conclude that there was no intent on behalf of petitioner’s counsel to file a timely petition placing Ms. Jones’ tax liabilities…in issue and thus there was no original petition filed on Ms. Jones’ behalf for her to ratify. See Normac, Inc. v. Commissioner, 90 T.C. 142, 148 (1988); Cordero v. Commissioner, T.C. Memo. 1991-9, at *14.” Order, at p. 3.

But wait, there’s more, as the late-night telehucksters say.

“Although petitioner’s counsel claims in the motion that he was not ‘apprised of a separate Notice of Deficiency for Petitioner’s wife, Johnnie M. Jones’, we note that the notices of deficiency attached to respondent’s objection each include a Form 4089-B, Notice of Deficiency-Waiver. The Forms 4089-B each indicate that a copy of the notice of deficiency was sent to the taxpayer’s authorized representative, JGG, whose name also appears on the petition and who also filed the motion presently before us. The reliability of petitioner’s counsel’s foregoing statement is therefore called into question. Moreover, the fact that Ms. Jones’ name appeared on certain attachments to the notice of deficiency issued to petitioner should have alerted petitioner’s counsel that a notice of deficiency may also have been issued to Ms. Jones. As far as the record shows, however, counsel made no effort to determine whether Ms. Jones had also received a notice of deficiency and, having failed to file a petition on her behalf, did not attempt to remedy the dereliction until over a year after filing the petition on petitioner’s behalf.” Order, at p. 3. (Name omitted; there but for the grace of you-know-Whom goes any of us).

Takeaway- The hidden spouse trick can be played by IRS as well as by clients. Ask at intake. Even at the last hour.


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