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Tax Court rules agent was not authorized to sign couple’s tax return

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Tax Hot TopicsThe Tax Court ruled that a couple’s jointly filed Form 1040 was not a valid return because the agent appointed by the taxpayers to sign the return was not properly authorized.

In Levi v. Commissioner, T.C. Memo 2015-118 (June 30, 2015), the taxpayers, a married couple, hired an attorney to prepare their 2010 Form 1040. The taxpayers executed a Form 2848, “Power of Attorney and Declaration of Representative,” appointing the attorney as the taxpayers’ representative. The attorney prepared, signed and submitted the taxpayers’ Form 1040.

Thereafter, the IRS examined the taxpayers’ 2010 tax return and determined deficiencies. The IRS also asserted failure-to-file penalties under Section 6651(a)(1), on the basis that the taxpayers did not sign the 2010 return “in their names,” and that as a result, the return was not deemed to be filed on time.

In ruling for the IRS, the Tax Court held that tax returns must be signed by the actual taxpayer, unless the taxpayer has appointed a duly authorized agent. Treas. Reg. Sec. 1.6012-1(a)(5) states that an agent can sign a taxpayer’s return if the taxpayer is unable to do so as a result of “disease, injury, or continuous absence from the United States, or if, upon a showing of good cause, the taxpayer obtains permission from the IRS.”

Under the facts in Levi, the taxpayers were not sick, injured or continuously absent from the United States, nor did they obtain permission from the IRS for the attorney to sign their return as an agent. As a result, the agent’s signature was not authorized, and the taxpayers’ tax return was not valid.

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Dave Auclair
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david.auclair@us.gt.com

Shamik Trivedi
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shamik.trivedi@us.gt.com

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