Om and Anjali Soni v. Comm., CA-2, No. 22-829-ag
This post is part of our series on recent important tax cases that may be of interest to accounting, tax, and finance professionals. For more like this, see our Federal Tax Update and California Federal Tax Update, which offer a comprehensive analysis of the year’s most pivotal tax developments.
Tax Return was Jointly Filed Even though Spouse did not Sign the Return (Om and Anjali Soni v. Comm., CA-2, No. 22-829-ag (Jul. 27, 2023))
The U.S. Court of Appeals, Second Circuit, affirmed the Tax Court’s Jan. 7, 2022, opinion that Om and Anjali Soni’s 2004 tax return was jointly filed. Four circumstances were identified as probative of the taxpayers’ intent. First, Anjali knew “a return had to be filed” because “[s]he was generally aware of the U.S. tax system but chose not to engage.” Second, Anjali knew of Om’s “expert knowledge” because he was an experienced businessperson and she “chose to trust [his] handling of their family’s finances, which included [the] preparation and filing of their returns, including the [Return].” Third, the Sonis filed a joint petition in the Tax Court. And fourth, Anjali only belatedly challenged the IRS’s characterization of the Return as “joint,” not having “disavow[ed]” its “joint status” until trial. The Appeals Court found that the fact that the Sonis filed a joint tax return for every year from 1999 through 2003, and from 2005 through 2014, further supported their finding that the Sonis intended to file jointly.
Tax practitioner planning. Why would taxpayers argue that the return was not a valid joint return? Taxpayers are jointly and severally liable for taxes and penalties on a jointly filed return. Perhaps the Sonis hoped to protect Mrs. Soni’s separately held assets.
Also see.
Lindsey Jones v. Comm., CA-9, 2022-1 USTC §50,111 (Feb. 3, 2022), where unsigned return was still a valid married filing joint return because spouse tacitly consented to the filing of a joint return when she provided tax documents to her spouse.