P wife signed a Form 900, Tax Collection Waiver, containing a waiver extending the 10-year period of limitations on collection for the first 4 of the tax years in issue. After signing the waiver, Ps entered into an installment agreement with R. Although P husband's signature purportedly appears on the Form 900, P husband contends that he never signed the Form 900 and, therefore, the waiver is invalid as to both Ps. R contends that P husband signed the waiver and that, if P husband did not sign the waiver, the waiver is nevertheless valid as to both Ps. Ps also contend that R failed to send Ps a notice of deficiency for the tax years in issue.Held:
Held, further, P wife may separately enter into a valid waiver of the 10-year period of limitations on collection for tax years for which she has filed a joint tax return, and the waiver is valid as to her. The waiver, however, is *2 not valid as to P husband unless he also signed the Form 900 or unless he may not otherwise repudiate it.
Held, further, because the waiver of the 10-year period of limitations on collection is a dispute regarding the underlying liability, we review de novo the issue of whether P husband's signature on the Form 900 is authentic.
Held, further, Ps did not meet their burden of proving that P husband did not sign the Form 900.
Held, further, alternatively, regardless of the authenticity of P husband's signature, P husband may not repudiate the waiver contained in the Form 900.
Held, further, because it is unclear from the record whether a notice of deficiency was sent to Ps for certain of the tax years in issue, we remand the case to R's Appeals Office to clarify the record pursuant to
*2 OPINION
WELLS, Judge: Respondent sent a Notice of Determination Concerning Collection Action(s) Under
Some of the facts and certain exhibits have been stipulated. The stipulations of fact are incorporated in this Opinion by reference and are found accordingly.
*3 At the time the petition was filed, petitioners resided in California.
Petitioners are husband and wife. Petitioners filed joint Federal income tax returns for the tax years in issue.
Petitioner Shelby L. Jordan (Mr. Jordan) was a professional football player in the National Football League (NFL).
On April 3, 1989, respondent assessed petitioners' income tax for their 1987 tax year after petitioners filed a Federal income tax return and did not pay the tax shown on the return.
On June 1, 1992, respondent assessed petitioners' income tax for their 1986 tax year on the basis of an audit of petitioners' return for that year.
On April 26, 1993, respondent assessed petitioners' income tax for their 1988 and 1989 tax years on the basis of an audit of petitioners' returns for those years.
On March 2, 1995, petitioner Donazella H. Jordan (Mrs. Jordan) signed Form 900 containing a waiver until December 31, *5 2010, of the period of limitations on collection of petitioners' tax due for petitioners' 1985, 1986, 1987, 1988, and 1989 tax years. The Form 900 contains a signature purporting to be Mr. Jordan's, but Mr. Jordan disputes that the signature is his. Respondent's Revenue Officer W. Wallace (Ms. Wallace) signed the Form 900 on March 6, 1995, on behalf of respondent. On March 20, 1995, petitioners entered into an installment agreement for their 1985, 1986, 1987, 1988, and 1989 tax years (installment agreement). 3
On July 8, 1996, respondent assessed petitioners' *6 income tax for their 1994 tax year after petitioners filed a Federal income tax return for that year but failed to pay the tax shown on the return.
On September 30, 1996, respondent assessed petitioners' income tax for their 1995 tax year after petitioners filed a Federal income tax return for that year but failed to pay the tax shown on the return.
*4 On February 22, 2000, petitioners submitted an offer-in-compromise for their tax years 1985 through 1989, 1992, and 1994 through 1999. On September 5, 2001, respondent rejected the offer-in-compromise. On June 19, 2002, petitioners paid respondent in full for their 1985, 1996, 1997, 1998, 1999, and 2000 tax years.
On February 13, 2007, respondent sent petitioners a Notice of Federal Tax Lien Filing and Your Right to a Hearing Under
On March 13, 2007, petitioners timely submitted a Form 12153, Request for a Collection Due Process or Equivalent Hearing. At the hearing, petitioners raised the issue of whether the 10-year period of limitations on collection remained open and whether the Form 900 was valid, contending that the *7 signature on the Form 900 purporting to be Mr. Jordan's was not, in fact, his signature.
Appeals Officer S. Lavenburg (Ms. Lavenburg) conducted the review of petitioners' file. On May 1, 2007, Ms. Lavenburg contacted Ms. Wallace, the revenue officer at the time the Form 900 was signed. The notice of determination states that Ms. Wallace confirmed to Ms. Lavenburg that both petitioners signed the Form 900 on March 2, 1995, and that she specifically remembered Mr. Jordan signing because he was an "N.F.L. player." On May 2, 2007, Ms. Lavenburg contacted petitioners' representative, J. Behar (Mr. Behar), and discussed the validity of Mr. Jordan's signature on the Form 900. Ms. Lavenburg declined petitioners' request that the IRS hire a handwriting expert to confirm that the signature was in fact Mr. Jordan's signature. On May 15, 2007, Ms. Lavenburg compared the signature on the Form 900 to those on petitioners' 1989 and 1995 Federal income tax returns and noted that the signature on the Form 900 matched that on the 1989 return but not that on the 1995 return. Ms. Lavenburg ultimately concluded that the filing of the NFTL was appropriate.
By letter dated May 24, 2007, respondent sent petitioners *8 a notice of determination sustaining the filing of the NFTL with respect to petitioners' 1986, 1987, 1988, 1989, 1994, and 1995 tax years. Petitioners timely filed with this Court a petition for review of respondent's determination.
*5 DiscussionAt the hearing, the taxpayer may raise any relevant issue including appropriate spousal defenses, challenges to the appropriateness of collection actions, and collection alternatives.
Where the validity of the underlying tax liability is properly in issue, the Court will review the matter de novo. Where the validity of the underlying tax is not properly in issue, however, the Court will review the Commissioner's determination for abuse of discretion.
We first decide whether petitioners bear the burden of proof. The period of limitations on collection is an affirmative defense, and the party raising it must specifically plead it and carry the burden of proof with respect to such defense.
The record shows that the NFTL was filed 10 years after the date of assessment for petitioners' 1986, 1987, 1988, and 1989 tax years. Respondent *11 introduced a waiver of the period of limitations on collection, signed in conjunction with an installment agreement, that made the filing of the NFTL timely. The signatures on such a waiver are presumed valid. See
Before we address the validity of the waiver, we consider whether Mrs. Jordan's signature on the Form 900 is sufficient to bind petitioners to the waiver of the 10-year period of limitations on collection 5*12 *13 of their tax liabilities. Petitioners *7 contend that, because a joint return must be signed by both parties, the waiver of the period of limitations must be signed by both parties in order to be effective. Respondent contends that one spouse may enter into a valid waiver for both spouses who have signed a joint return for the year covered by the waiver, even if the other spouse has not signed the waiver.
Spouses filing a joint return are separate taxpayers.
In the context of a waiver of the period of limitations on assessment pursuant to
We conclude that the same reasoning contained in the
Petitioners contend that Mr. Jordan's *15 signature on the Form 900 was not his and that it was forged. Before we decide that issue, however, we must first consider whether we review the forgery issue de novo; i.e., whether the Court decides for itself whether the signature is Mr. Jordan's, or instead under an abuse of discretion standard; i.e., whether the Appeals officer abused her discretion in concluding that Mr. Jordan signed the Form 900.
We have held that a challenge to the 10-year period of limitations on collection is a challenge to the underlying liability.
Under a de novo standard of review, we consider all of the relevant evidence introduced at trial. Respondent contends that the Court should not consider any evidence that is not in the administrative record at the time of the Appeals hearing, a limitation known as the administrative record rule.
As stated above, petitioners bear the burden of proving that the waiver is invalid. Both parties presented evidence concerning the authenticity of Mr. Jordan's signature. Mr. Jordan testified that he did not sign the Form 900. Additionally, Mr. Jordan testified that he was not present when his wife signed the Form 900 on her own behalf and could not recall whether it was signed in connection with an installment agreement.
Petitioners also called Richard Orsini, a handwriting expert, to testify. Mr. Orsini examined 11 checks that Mr. Jordan*19 signed during 1995 (1995 checks). Mr. Orsini compared the signatures on the 1995 checks with Mr. Jordan's alleged signature on the Form 900. Mr. Orsini found it highly probable that, on the basis of the signatures contained on the 1995 checks, the signature on the Form 900 was not *10 Mr. Jordan's signature and that the evidence tended to show that the signature was probably made by his wife.
Additionally, Mr. Jordan's signature on petitioners' 1995 joint return does not appear to match the signature on the Form 900, and it does not appear to match Mr. Jordan's signatures on the 1995 checks. The last name of the signature appearing on the Form 900 more resembles Mrs. Jordan's signature of her last name than Mr. Jordan's signature of his last name.
Respondent offered countervailing evidence to prove that the signature on the Form 900 is Mr. Jordan's signature. The signature on petitioners' 1989 joint Federal tax return closely resembles the signature on the Form 900. Petitioners do not contest the authenticity of the signature on their 1989 tax return and do not contend that the signature on their 1989 return is not Mr. Jordan's signature.
By way of background, as noted above, the notice of *20 determination states that Ms. Wallace remembered "that the waiver was signed by both Mr. and Mrs. Jordan in her presence." Also, the case activity record from the Appeals Office hearing shows that Ms. Lavenburg confirmed that Ms. Wallace "specifically remembers both [taxpayers'] signing [the] waiver because Mr. [Jordan] was an 'N.F.L. player'."
Importantly, we note that petitioners failed to call Mrs. Jordan to testify. Mrs. Jordan would be a key witness that potentially could corroborate Mr. Jordan's testimony. Where a party who has the burden of proof fails to introduce evidence within his control and which, if true, would be favorable to him, it gives rise to a presumption that, if produced, the evidence would be unfavorable.
*11 After considering the entire record, we are not persuaded that the signature on the Form 900 is not Mr. Jordan's signature. Petitioners therefore have failed to meet their burden of proof.
Even if we were to conclude that Mr. Jordan did not sign the Form 900, we would alternatively hold that Mr. Jordan may not repudiate the waiver contained in the Form 900. We have held that a taxpayer ratified the waiver of the 10-year period of limitations on collection when he made payments pursuant to an installment agreement that was entered into on the basis of the waiver.
Accordingly, we hold that Mr. Jordan may not repudiate the waiver in the Form 900 extending the 10-year period of limitations on collection.
Lastly, we decide whether petitioners may now *24 raise in this Court the issue of whether a proper notice of deficiency was sent to them after they never raised it with respondent's Appeals Office at the hearing. Petitioners contend that a notice of deficiency was not sent for any of the tax years in issue.
Generally, the Commissioner cannot collect a tax until it has been formally and timely assessed. In years where a return is filed, the Commissioner may summarily assess the taxpayer as to the amount shown on the return without a notice of deficiency.
In
The administrative *25 record and the stipulation of facts show that petitioners' taxes for their 1987, 1994, and 1995 tax years were assessed on the basis of the filing of joint tax returns after petitioners failed to pay the tax shown on the returns. In years where a return is filed, a notice of deficiency is not necessary when the Commissioner assesses liability stated on a return but remaining unpaid.
The record before us is unclear as to whether a notice of deficiency was sent to petitioners for their 1986, 1988, and *13 1989 tax years. We have held that a verification generally is proper if the Appeals officer relied on a Form 4340, Certificate of Assessments, Payments, and Other Specified Matters, or a transcript containing similar information.
The Court has considered all other arguments made by the parties and, to the extent we have not addressed them herein, we consider them moot, irrelevant, or without merit.
To reflect the foregoing,
An appropriate order will be issued.
Footnotes
1. Unless otherwise indicated, all Rule references are to the Tax Court Rules of Practice and Procedure, and all section references are to the Internal Revenue Code, as amended.↩
2. Petitioners concede that the notice of Federal tax lien for tax years 1994 and 1995 was sent within the period of limitations on collection.
3. Generally, any extension of the period of limitations on collection made before Dec. 31, 1999, would have expired on Dec. 31, 2002. However, any extension of the limitations period made in connection with an installment agreement will expire 90 days after the end of the extension period. Internal Revenue Service Restructuring and Reform Act of 1998,
Pub. L. 105-206, sec. 3461(c)(2), 112 Stat. 764">112 Stat. 764 . As the Form 900 in the instant case was signed in conjunction with an installment agreement, if valid, it would extend the limitations period to Dec. 31, 2010, plus 90 days, or Mar. 31, 2011. SeeJoy v. Commissioner, T.C. Memo 2008-197↩ .4. Petitioners do not contend that the burden of proof should be shifted to respondent pursuant to
sec. 7491(a)↩ .5. Where the assessment of Federal income tax is made within the relevant period of limitations, the tax may be collected by levy if the levy is made within 10 years after the assessment of the tax.
Sec. 6502(a) ;Boyd v. Commissioner, 117 T.C. 127">117 T.C. 127 , 130 (2001). In 1990, Congress amendedsec. 6502(a)(1) to extend the period of limitations on collection of taxes after assessment from 6 years to 10 years. Omnibus Budget Reconciliation Act of 1990,Pub. L. 101-508, sec. 11317(a), 104 Stat. 1388">104 Stat. 1388 -458. The 10-year limitations period applies to taxes assessed after Nov. 5, 1990, and to taxes assessed on or before that date if the 6year limitations period under prior law had not expired as of that date. Id.subsec. (c), 104 Stat. 1388">104 Stat. 1388 -458. Because respondent assessed tax for petitioners' 1987 tax year on Apr. 3, 1989, and the 6-year limitations period under prior law had not expired as of Nov. 5, 1990, the 10-year limitations period on collection applies with respect to petitioners' 1987 tax year. Respondent assessed petitioners' income tax for all other years in issue after Nov. 5, 1990; consequently, the 10-year period of limitations applies to petitioners' 1986, 1988, and 1989 tax years.Generally, Federal income tax must be collected within 10 years of being assessed.
Sec. 6502 . The period of limitations on collection may be extended in two cases: (1) Where the taxpayer enters into a valid installment agreement with the Commissioner, and (2) where the Commissioner releases a levy after the period of limitations on collection has expired.Sec. 6502(a)(2) . In the case of an installment agreement, as in the instant case, the period of limitations expires 90 days after the expiration of the installment agreement.Sec. 6502(a)(2)(A)↩ .6. Respondent argues, on the basis of
Roberts v. Commissioner, T.C. Memo 2004-100">T.C. Memo 2004-100 , that the abuse of discretion standard is the applicable standard of review. However, asBoyd v. Commissioner, supra , is directly on point, we follow Boyd↩.7. Because we reach this conclusion, we need not address whether this issue is also one that must be verified by the Appeals officer pursuant to
sec. 6330(c)(1)↩ and whether the standard of review under that provision would be de novo or abuse of discretion.8. The Tax Court will follow the law of the Court of Appeals to which an appeal would lie if that law is on point.
Golsen v. Commissioner, 54 T.C. 742">54 T.C. 742 , 757 (1970), affd.445 F.2d 985">445 F.2d 985↩ (10th Cir. 1971).9.
Keller v. Commissioner, 568 F.3d 710">568 F.3d 710 (9th Cir. 2009), affg.T.C. Memo. 2006-166 ,Lindley v. Commissioner, T.C. Memo 2006-229">T.C. Memo 2006-229 ,McDonough v. Commissioner, T.C. Memo 2006-234">T.C. Memo 2006-234 , andHansen v. Commissioner, T.C. Memo 2007-56">T.C. Memo 2007-56 , and affg. in part and vacating in partBarnes v. Commissioner, T.C. Memo 2006-150">T.C. Memo 2006-150 ,Clayton v. Commissioner, T.C. Memo 2006-188">T.C. Memo 2006-188 ,Blondheim v. Commissioner, T.C. Memo 2006-216">T.C. Memo 2006-216 ,Ertz v. Commissioner, T.C. Memo 2007-15">T.C. Memo 2007-15 ,Abelein v. Commissioner, T.C. Memo 2007-24">T.C. Memo 2007-24 ,Carter v. Commissioner, T.C. Memo 2007-25">T.C. Memo 2007-25 ,Hubbart v. Commissioner, T.C. Memo 2007-26">T.C. Memo 2007-26 ,Freeman v. Commissioner, T.C. Memo 2007-28">T.C. Memo 2007-28 ,Johnson v. Commissioner, T.C. Memo 2007-29">T.C. Memo 2007-29 ,Estate of Andrews v. Commissioner, T.C. Memo 2007-30">T.C. Memo. 2007-30 ,Catlow v. Commissioner, T.C. Memo 2007-47">T.C. Memo 2007-47 , andSmith v. Commissioner, T.C. Memo 2007-73↩ .10. The Tax Court does not follow the administrative record rule. See
Robinette v. Commissioner, 123 T.C. 85">123 T.C. 85 (2004), revd.439 F.3d 455">439 F.3d 455↩ (8th Cir. 2006).11. Petitioners admit that Mrs. Jordan's signature is authentic. However, it is unclear whether Mrs. Jordan was present when Mr. Jordan purportedly signed the Form 900. The notice of determination states that Ms. Lavenburg confirmed Ms. Wallace's recollection, but respondent did not offer the testimony of either Ms. Wallace or Ms. Lavenburg.↩
12. The earliest assessment date was Apr. 3, 1989, for petitioners' 1987 tax year. Absent the waiver, the period of limitations for collection would have expired on Apr. 2, 1999. Tax for the 1986 tax year was assessed on June 1, 1992, and the period of limitations on collection would have expired on May 31, 2002. Tax for the 1988 and 1989 tax years was assessed on Apr. 26, 1993, and, absent the waiver, the period of limitations on collection would have expired on Apr. 25, 2003. Petitioners submitted an offer-in-compromise to respondent on Feb. 22, 2000, and it was rejected on Sept. 5, 2001. An offer-in-compromise suspends the period of limitations for collection for the period that the offer is pending.
Sec. 6331(k)(1) ,(3) ;sec. 301.7122-1T(h) ,Temporary Proced. & Admin. Regs., 64 Fed. Reg. 39026↩ (July 21, 1999) . While the offer-in-compromise would not have extended the limitations period for the 1987 tax year, it would have extended the limitations period for the 1986 tax year until Dec. 13, 2003, and for the 1988 and 1989 tax years until Nov. 6, 2004. Petitioners first alerted respondent to a possible forged signature on Oct. 20, 2003.