F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
NOV 5 2001
UNITED STATES COURT OF APPEALS
PATRICK FISHER
Clerk
TENTH CIRCUIT
NATHAN T. OLPIN,
Petitioner-Appellant,
v. No. 00-9003
COMMISSIONER OF INTERNAL
REVENUE,
Respondent-Appellee.
APPEAL FROM THE DECISION OF THE
UNITED STATES TAX COURT
(T.C. No. 10437-99)
W. Kevin Jackson of Jensen, Duffin, Carman, Dibb & Jackson, Salt Lake City,
Utah, for Petitioner-Appellant.
Karen D. Utiger (Randolph Hutter and Ann B. Durney with her on the briefs),
U.S. Department of Justice, Tax Division, Washington, D.C., for Respondent-
Appellee.
_________________________
Before KELLY and McKAY, Circuit Judges, and BROWN, District Judge. *
________________________
*
The Honorable Wesley E. Brown, United States Senior District Judge for
the District of Kansas, sitting by designation.
McKAY, Circuit Judge.
__________________________
Nathan T. Olpin appeals a United States Tax Court order granting summary
judgment in favor of the Commissioner of Internal Revenue and denying his
motion for summary judgment. Our jurisdiction arises under 26 U.S.C. §
7482(a)(1).
I. Standard of Review
We review Tax Court decisions “in the same manner and to the same extent
as decisions of the district courts in civil actions tried without a jury.”
§ 7482(a)(1). The relevant facts are undisputed, and we review the Tax Court’s
grant and denial of summary judgment de novo. Tele-Communications, Inc. v.
Comm’r, 104 F.3d 1229, 1232 (10th Cir. 1997). The issue is whether Mr. Olpin
and his wife at that time filed a valid 1995 federal income tax return electing to
report their income jointly when neither party had signed the return.
II. Background Facts and Proceedings
The following facts are taken from unchallenged affidavits filed by Mr.
Olpin, judicial admissions, and undisputed documentary evidence submitted with
the parties’ summary judgment motions and responses.
Mr. Olpin and his former wife (“Mrs. Olpin”) were legally married
throughout 1995. R. Doc. 1, at 1; Doc. 23, at 3. Mr. and Mrs. Olpin divorced in
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September 1996 after fifteen years of marriage. R. Doc. 1, at 1; Doc. 23, at 3.
During the entire course of their marriage, Mr. and Mrs. Olpin had always filed
joint federal and state tax returns; they are not tax protesters. In 1996, the Olpins
jointly applied for and signed under oath two extensions of time in which to file
their joint 1995 federal tax returns. R. Doc. 1, at 2; Doc. 23, at 3. Both of the
Olpins submitted income information for the 1995 tax year to their professional
tax preparer. The Olpins failed to sign the return before it was filed in October
1996, though the tax preparer did sign. Mr. Olpin testified that their failure to
sign was inadvertent. Both of the Olpins testified that it had been their intention
in 1996 to file a joint federal income tax return. The Olpins filed joint state tax
returns. R. Doc. 9, at 2; Doc 23, at 4.
The IRS processed the return in November 1996 and issued tax account
transcripts for the 1995 tax year. The return showed that the Olpins owed $3,795.
Mr. Olpin had included a $50 tax payment with the unsigned return and then made
a series of payments totaling $4,510.93, including penalties and interest, from
February 1997 through October 1997. R. Doc. 17, at 2.
Mr. and Mrs. Olpin divorced in September 1996. Mrs. Olpin declared
bankruptcy in February 1997. In March 1997, the IRS filed its first proof of
claim in the amount of $2,500 against Mrs. Olpin’s estate for the unpaid taxes. In
September 1997, the IRS amended the amount of its claim to $5,012, despite the
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fact that Mr. Olpin had been making payments. The IRS informed Mrs. Olpin
during her bankruptcy deposition that she and Mr. Olpin had failed to sign their
1995 joint return. Mrs. Olpin testified that the IRS also informed her that its
claim for deficiency was based in part on Mr. Olpin’s allegedly unreported
income for 1995. However, the May 1999 deficiency notice alleged no
discrepancies between Mr. Olpin’s reported income and actual income. Mrs.
Olpin testified that because she had not seen the 1995 joint return and had no
independent knowledge of Mr. Olpin’s income for 1995, “at the suggestion of the
Internal Revenue Service [she] signed and filed a separate federal individual tax
return for the tax year 1995.” R. Doc. 9, at 2.
Mrs. Olpin informed Mr. Olpin of the unsigned joint return and of her
understanding that the IRS would object to the confirmation of her bankruptcy
petition unless she filed a separate return for 1995. Over Mr. Olpin’s objection,
Mrs. Olpin filed her separate return on February 9, 1998. By this time, Mr. Olpin
had satisfied the entire joint tax liability. The IRS amended its bankruptcy proof
of claim to state that Mrs. Olpin owed no back taxes for the 1995 tax year on the
same day Mrs. Olpin filed her separate return. R. Doc. 19, Ex. I.
In August 1998, the IRS informed Mr. Olpin that he had not filed a valid
1995 tax return because the joint return was not signed. R. Doc. 7, Ex. E. Mr.
Olpin met with IRS agents on two occasions and asked to sign the return in order
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to correct the problem. However, the agents refused to let him sign it. Id.
Doc.17, at 2-3. The IRS informed Mr. Olpin that he and Mrs. Olpin could still
file an amended “valid joint return,” but he could not “unilaterally file a joint
return” without Mrs. Olpin’s signature. Id. Doc. 7, Ex. E. Mrs. Olpin had already
filed her separate tax return by that time, and she refused to sign another joint
return with Mr. Olpin even though she could have done so. Therefore, an
amended joint return with two signatures was never filed with the IRS.
On September 14, 1998, the IRS reversed its original processing of the
Olpins’ joint 1995 tax return to state that it was not a valid return because it was
not signed. In May 1999, the Commissioner issued a Notice of Deficiency to Mr.
Olpin stating that the 1995 joint return was “not considered a tax return” because
it “was not signed by either spouse.” Id. Ex. A. Using the income information
supplied by Mr. Olpin on the original joint tax return and by Mrs. Olpin on her
separate return, the tax deficiency was then based on a refiguring of Mr. Olpin’s
tax liability under a married filing separately status.
Mr. Olpin challenged the deficiency in the Tax Court. The parties filed
cross-motions for summary judgment. Mr. Olpin argued that the original 1995
joint return would have been valid but for the IRS’s untimely and unreasonable
refusal to allow him to sign the return. The Commissioner argued that a return
must be signed or it is invalid. The Tax Court granted summary judgment in the
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Commissioner’s favor. Mr. Olpin appealed to this court. On January 25, 2001,
this court entered a decision reversing the judgment of the Tax Court. On
March 9, 2001, a petition for panel rehearing was filed by the Commissioner. On
May 1, 2001, this court issued a written order granting the Commissioner’s
petition for rehearing. We withdrew our prior opinion and vacated our judgment.
The case was reargued to this panel.
III. Tax Return Signature Requirements
The Internal Revenue Code states that “any return . . . required to be made
under any provision of the internal revenue laws or regulations shall be signed in
accordance with forms or regulations prescribed by the Secretary.” 26 U.S.C.
§ 6061. The Code also requires that “[e]xcept as otherwise provided by the
Secretary, any return . . . required to be made under any provision of the internal
revenue laws or regulations shall contain or be verified by a written declaration
that it is made under the penalties of perjury.” 26 U.S.C. § 6065. The Code
clearly states that, in order to be valid, a tax return must be signed. Additionally,
Treasury Regulations provide that “[a] joint return of a husband and wife (if not
made by an agent of one or both spouses) shall be signed by both spouses.”
Treas. Reg. §1.6013-1(a)(2). The 1995 Form 1040 (the form filed by the Olpins)
states on its face, “If a joint return BOTH must sign.” Doc. 6, Ex. B. The
Secretary has not created any applicable exception to § 6065’s verification
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requirement. Because the Olpins did not file electronically, the Code exception
for electronically filed returns does not apply in this case.
The general rule when a tax return is unsigned is that it is invalid. Lucas v.
Pilliod Lumber Co., 281 U.S. 245, 249 (1930) (a return unverified by oath did not
meet the plain requirements of the statute); Brafman v. United States, 384 F.2d
863, 868 (5th Cir. 1967) (the Code requires tax returns to be signed in order to be
effective); Shea v. Comm’r, 780 F.2d 561, 568 (6th Cir. 1986) (“failure of either
party to sign the return . . . renders it invalid.”); Bachner v. Comm’r, 81 F.3d
1274, 1280 (3d Cir. 1996) (“inclusion of the taxpayer’s signature is a prerequisite
to the validity of the tax return”); Doll v. Comm’r, 358 F.2d 713, 714 (3d Cir.
1966) (“return failed to meet the requirements of the statute” where neither
taxpayer signed). The courts have fashioned one exception. If one spouse on a
joint return signs, then there is an inquiry as to the intent of the other spouse. In
re Hanesworth, 936 F.2d 583, 1991 WL 114639 (10th Cir. 1991). However, the
Hanesworth exception is not applicable here because neither party signed the joint
return. Therefore, in this case, it is not necessary to reach the issue of intent.
Even if Mr. Olpin had been allowed to sign the return at a later date, the
Hanesworth exception would not be available to him. His own evidence showed
that at the time he offered to sign the return Mrs. Olpin had already filed a
separate return and refused to sign the joint return. Accordingly, as a matter of
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law, he could not meet the standard of proof required.
IV. Waiver
Mr. Olpin’s argument that the “acceptance” of his return by the IRS can
cure the lack of signatures must fail. Even though the IRS processed the Olpins’
joint return, accepted Mr. Olpin’s payments, and failed to return the Form 1040
for the Olpins to sign, acceptance cannot cure an invalid return. The Supreme
Court has stated that “explicit statutory requirements [] must be observed and are
beyond the dispensing power of Treasury officials.” Angelus Milling Co. v.
Comm’r, 325 U.S. 293, 296 (1945); see also Lucas v. Pilliod Lumber Co., 281
U.S. 245 (1930) (an analogous case in which the Supreme Court explicitly
rejected the notion of waiver by acceptance).
V. Administrative Practice - Duty
The duty to sign a tax return is on the taxpayer. 26 U.S.C. §§ 6061, 6065.
However, in a case like Mr. Olpin’s, when the IRS discovers the error, the IRS
usually returns the tax return to the taxpayer for his signature. The IRS
apparently inadvertently missed the lack of signatures on Mr. Olpin’s return.
While it may be the administrative practice of the IRS to return unsigned tax
returns to taxpayers, the Internal Revenue Code does not place such a duty on the
IRS. Rather, the Internal Revenue Code places the duty to sign a tax return solely
on the taxpayer. See id. Operating procedures of the IRS do not create rights in
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the taxpayer. Gille v. United States, 33 F.3d 46, 48 (10th Cir. 1994) (citations
omitted) (IRS procedures do not have the force of law because the procedures
manual is “directory rather than mandatory”); see also Doll v. Comm’r, 24 T.C.M.
(CCH) 995, 996 (1965), aff’d, 358 F.2d 713 (3d Cir. 1966) (even though the IRS
could have made taxpayers aware of failure to sign their returns and requested
signatures, that still did not constitute waiver of signature requirements);
Bachner, 81 F.3d at 1281 (IRS agents “with only delegated authority” have no
authority to waive statutory requirements concerning return submissions).
Accordingly, the administrative practice argument is unavailing.
VI. Estoppel
We asked the parties to address the issue of estoppel in their briefs on
appeal. Upon review of the briefs, we conclude that the argument is without
merit.
For the foregoing reasons, the decision of the Tax Court is AFFIRMED.
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