T.C. Summary Opinion 2003-120
UNITED STATES TAX COURT
LAURA ANN FLOOD, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 10645-02S. Filed August 27, 2003.
Laura Ann Flood, Petitioner, pro se.
Rebecca S. Duewer and Paul R. Zamolo, for respondent.
PAJAK, Special Trial Judge: This case was heard pursuant to
the provisions of section 7463 of the Internal Revenue Code in
effect at the time the petition was filed. Unless otherwise
indicated, section references are to the Internal Revenue Code in
effect for the year in issue. The decision to be entered is not
reviewable by any other court, and this opinion should not be
cited as authority.
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Respondent issued a Letter 3193-c, Notice of Determination
Concerning Collection Action(s) Under Sections 6320 And/Or 6330,
in which respondent determined that the two Notices of Federal
Tax Lien filed against petitioner would not be released or
withdrawn. This Court must decide: (1) Whether petitioner is
entitled to amend her 1995 tax return, and (2) whether respondent
improperly considered petitioner’s section 401(k) plan as a means
of satisfying her tax liabilities.
Some of the facts in this case have been stipulated and are
so found. Petitioner resided in Alameda, California, at the time
she filed her petition.
During taxable year 1995, petitioner, a legal secretary, was
married to Joseph F. Beharrysingh (Mr. Beharrysingh). With the
concurrence of petitioner and for family reasons, Mr.
Beharrysingh filed an individual income tax return, with the
filing status of married filing separate, for taxable year 1995.
Sometime thereafter, petitioner and Mr. Beharrysingh divorced.
On February 3, 1997, petitioner filed an individual income
tax return for 1995, dated “4/15/96", with the filing status of
married filing separate, and reported a total tax of $14,476,
less Federal withholding of $6,687.68, for an amount owed of
$7,788.36.
Petitioner offered into evidence an unsigned and undated
Form 1040X, Amended U.S. Individual Income Tax Return, changing
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her filing status and that of Mr. Beharrysingh from “married
filing separately” to “married filing jointly” for the year 1995,
and showing tax due of $4,483. The Form 1040X bears an Internal
Revenue Service, Fresno, California, date stamp of June 7, 1997.
Petitioner also offered a Form 8009, We Need More
Information to Process Your Amended Return, issued by respondent.
Two boxes were checked on that Form 8009: Box 1, which requested
that the amended return be signed by both spouses; and Box 28,
which discussed the full payment of tax requirement for a
subsequently filed joint return, which in petitioner’s case
called for a payment of $4,483.
In October 2000, respondent issued two Forms 668(Y)(c),
Notice of Federal Tax Lien, to petitioner. One was for taxable
years 1991 and 1995; the other was for taxable year 1993.
On November 13, 2000, petitioner submitted a request for a
hearing, which was held on June 4, 2001.
Petitioner raises only two issues as a result of her
hearing. Petitioner contends that she should be entitled to
amend her 1995 individual income tax return and that her section
401(k) plan was improperly considered as a means of satisfying
her outstanding tax liabilities.
We first address the amended return question. Section
6013(b) allows a joint return to be filed after separate returns
have been filed, if for the taxable year for which separate
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returns were filed a joint return could have been filed. Under
section 6013(b)(2), a joint return may not be filed, subsequent
to filing separate returns, after the expiration of 3 years from
the last date prescribed by law for filing the return for such
taxable year. The 3-year period of limitations for filing a
joint return under section 6013(b) for the 1995 taxable year
expired on April 15, 1999. Furthermore, section 6013(b)(2)
provided that no election could be made “unless there is paid in
full at or before the time of the filing of the joint return the
amount shown as tax upon such joint return”.
The Taxpayer Bill of Rights 2, Pub. L. 104-168, sec. 402(a),
110 Stat. 1459 (1996), amended section 6013(b)(2) by repealing
the requirement that the tax shown on the subsequently filed
joint return be paid in full at or before the filing of the joint
return. What is critical here is that this amendment was made
effective for taxable years beginning after July 30, 1996. Sec.
6013(b)(2); sec. 1.6013-2(b)(1), Income Tax Regs. Thus, the law
governing taxable years before July 30, 1996, requires full
payment of the tax shown on a subsequently filed joint return.
Petitioner offered no evidence, other than her own
testimony, that she complied with the Form 8009 request to submit
a Form 1040X signed by both spouses. Petitioner testified that
she believed she signed the Form 1040X and mailed it to
respondent. She did not say her husband signed the form. The
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hearing examiner searched the Internal Revenue Service computer
records for Mr. Beharrysingh and petitioner and found no record
of an amended return being filed.
With respect to the Form 8009, petitioner admitted that she
“could not pay this new amount [of $4,483] in full before the
amended return [could] be considered”. Thus, petitioner admits
she did not comply with the requirements set forth in the Form
8009.
Instead, petitioner claimed that “section 6013(b) had been
amended effective January 1, 1997 to allow taxpayers to amend
from separate returns to joint, without paying outstanding taxes
due first.” Petitioner is very articulate, but she is wrong
about the effective date. As stated, the amendment of section
6013(b), which removed the payment requirement, was effective for
taxable years beginning after July 30, 1996. The amending
legislation was prospective in application, not retroactive, and
thus is inapplicable here. The taxable year in issue is 1995, a
taxable year that obviously precedes the effective date of the
amendment. Any subsequently filed joint return for taxable year
1995 would have to have been accompanied by full payment of any
tax due as shown on that return. Even if petitioner had been
able to establish that she submitted a signed Form 1040X within
the prescribed statutory period, she admitted she could not have
made the payment of tax required in order to file such a form.
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Unfortunately for petitioner, we conclude that petitioner
did not amend her 1995 tax return under the requirements of
section 6013(b)(2) as in effect for the taxable year in question.
We now turn to the section 401(k) plan question. Petitioner
contends that respondent improperly considered the use of
petitioner’s section 401(k) plan as a means to satisfy
petitioner’s outstanding tax liability. We do not view this as
improper. Respondent was required to take into account
petitioner’s assets, including the retirement plan.
Reviewed and adopted as the report of the Small Tax Case
Division.
Decision will be entered
for respondent.