Forrest v. Commissioner

• Decision Date: 27 June 1978
• Docket Number: Docket No. 861-77.
• Citation: 37 TCM (CCH) 1033,1978 TC Memo 239
• Parties: Gene Forrest v. Commissioner.
• Court: U.S. Tax Court

37 TCM (CCH) 1033

1978 TC Memo 239

T.C. Memo. 1978-239.

Gene Forrest v. Commissioner.

Docket No. 861-77.

United States Tax Court.

Filed June 27, 1978.

Gene Forrest, 5 Horizon Rd., Fort Lee, N.J., pro se. Michael A. Mayhall, for the respondent.

Memorandum Findings of Fact and Opinion

SCOTT, Judge:

Respondent determined a deficiency in petitioner's Federal income tax for the calendar year 1974 in the amount of $812.44. The issues for decision are:

(1) Whether petitioner is entitled to have his tax computed on a basis other than that of a married person filing a separate return, and

(2) Whether the Commissioner is estopped to deny petitioner the right to compute his tax other than on the basis of a married person filing a separate return.

Findings of Fact

Some of the facts have been stipulated and are found accordingly.

Petitioner, who resided in Fort Lee, New Jersey, at the time of the filing of the petition in this case, timely filed an income tax return for the taxable year 1974 which he signed on April 14, 1975. On this return he checked the filing status of "Unmarried Head of Household" and computed his tax accordingly.

During the taxable year 1974, petitioner was married to Marcia Forrest and until July 1 of that year they resided together in East Brunswick, New Jersey with their minor son, David. Petitioner and Marcia Forrest were legally divorced in October 1975. The judgment of divorce filed October 24, 1975, provided for the payment by petitioner of alimony and child support and for Mrs. Forrest to have custody of the child. The judgment also provided:

FURTHER ORDERED that the defendant shall save the plaintiff harmless from any and all income taxes due the Internal Revenue Service to and including the date of the signing of this Order, for which the parties may become obligated now or in the future, whether said income tax obligation is as a result of earnings from working, or earnings from stocks, bonds, or bank accounts, or earnings of any nature whatsoever;

FURTHER ORDERED that the defendant shall be entitled to claim the infant child on his income tax return as a dependent;

On July 9, 1974, the Superior Court of New Jersey, Chancery Division, Middlesex County, entered an order for pendente lite support, requiring petitioner to pay support and maintenance to his wife, and on August 21, 1974, entered an order for an increase in pendente lite support. The original order for pendente lite support contained the following provisions:

ORDERED, that the defendant shall pay to the plaintiff for the support and maintenance of the plaintiff and the parties' son, David Forrest, (unallocated) pendente lite, the sum of $350.00 per month commencing as of May 31, 1974, until further Order of this Court; and it is further

ORDERED, that the plaintiff shall sign the 1973 Joint Federal Income Tax Return prepared by the defendant, a copy of which has already been supplied by the defendant to the plaintiff and the defendant shall indemnify and hold the plaintiff harmless from any liability in connection with the signing of the aforesaid Joint Income Tax Return; * * *

After petitioner and Mrs. Forrest ceased to reside together in 1974, the principal place of abode of petitioner's minor son, David, for the balance of 1974 was the residence of Mrs. Forrest. Petitioner did not share the residence with his wife and child after July of 1974.

In March 1975 petitioner called the Internal Revenue Service office in Newark, New Jersey and requested to be advised how he should file his 1974 income tax return. He was advised that he could either choose to file a joint return with Mrs. Forrest or to file as head of a household. Petitioner computed his tax both ways and determined that less tax resulted from filing as head of a household. His return was audited and petitioner was told by the auditor that he had overpaid his tax by $100 and a refund would be made to him. Three months later petitioner received in the mail a document entitled "Revised Report." This document was on a printed form entitled "Report of Individual Income Tax Audit Changes." On the report, dated December 1, 1975, petitioner's filing status was shown as "single." Two small adjustments, one increasing and one decreasing petitioner's income as reported, with the net adjustment being a decrease in the amount of $333.50, were made and petitioner's tax was computed on the basis of a filing status of "single," resulting in an additional tax shown of $215.20. On the second page of the "Revised Report" furnished to petitioner the following appeared under "Explanation of Adjustments:"

B. Head of Household status has been disallowed. Your unmarried child must live together with you for the entire year in the household you maintain as the principal residence of both you and the child.

Petitioner went over the report and obtained the advice of an accountant. Thereafter he agreed to the adjustment and signed a document agreeing to pay the $215.20.

In February of 1976 petitioner received a statement from the Internal Revenue Service in the amount of $812.44 with the notation that he could not file as single but must file as a married person filing a separate return. Petitioner expressed a disagreement with this statement and was told to file a request for a review by a conferee of the Internal Revenue Service.

On April 6, 1976, petitioner had a meeting with a member of the Conference Section of the Internal Revenue Service in Newark and submitted evidence he had brought with him to the conferee. After the discussion between petitioner and the conferee, the conferee conferred with attorneys for the Internal Revenue Service and thereafter petitioner and the conferee agreed that petitioner's correct additional tax liability was only in the total amount of $142.05, and the conferee asked petitioner to give him a check in this amount. Petitioner drew a check, dated April 6, 1976, made payable to the Internal Revenue Service in the amount of $142.05 and handed it to the conferee.

On April 13, 1976, petitioner's check was returned to him with no explanation. Petitioner then telephoned the conferee and was advised that the conferee had been overruled by the Appellate Division of the Internal Revenue Service and that his tax liability was $692. Petitioner was sent a written notice to this effect. Petitioner then requested and had set up a meeting with the Appellate Division. At this meeting he was told that the Appellate Division did not have the jurisdiction to overrule the decision made with respect to his tax liability and that the next step he would have to take would be to take the matter to the United States Tax Court.

The total amount of tax paid by petitioner with his return and Mrs. Forrest with her return for the year 1974 is equal to the tax which would be properly reportable by Mr. and Mrs. Forrest on a joint return for the year 1974.

On January 6, 1976, a statutory notice of deficiency showing a deficiency in petitioner's income tax in the amount of $812.44 was issued to petitioner. Two adjustments were made in this notice which are not here in issue and the following explanation was given with respect to petitioner's filing status:

Explanation of Change in Filing Status

It is determined that you were still legally married at the completion of the taxable year ended December 31, 1974. Since you and your wife filed separate returns, you are not entitled to compute your tax using the rate schedules for single or head of household for the taxable year ended December 31, 1974. Your tax should be computed using the rate schedule for married taxpayers filing separate returns. Accordingly, your tax has been increased in the amount of $812.44.

Petitioner, on January 27, 1977, addressed a letter to this Court which was filed as a petition, and on February 10, 1977, filed an amended petition in which he placed in issue $670.39 of the deficiency determined by respondent, stating "Amount I believe owed — $142.05." In this amended petition petitioner alleged that he was told by the Internal Revenue Service to file as head of a household rather than joint and also alleged inconsistent and improper handling by the Internal Revenue Service of his return because of the numerous changes in position taken by employees or agents of the Internal Revenue Service. Petitioner further alleged in his petition that he should be entitled to file as a single individual since he was legally separated from his spouse under a decree of divorce or of separate maintenance.

At the trial petitioner contended that he should be entitled to file as a single individual or in the alternative, if he was wrong in this contention that "if I was advised correctly by the IRS that * * * I could not file head of household, I would certainly have elected to file jointly for I'm not a stupid person and am not willing to throw away $1,000.00, because that's the difference." Petitioner did not specifically contend that he should be entitled to file a joint return with his former wife, stating that he had discussed the matter with respondent's attorney and told him "If you allow me to file the way I would have elected to file at the beginning, if it was told to me that the proper way — I'll file that way now," and that "they advised me that I can't file that way now, because I've elected to come to this Court."¹

Opinion

Section 1(a), (c) and (d), I.R.C. 1954,² provides the tax rates for married individuals filing joint returns, unmarried individuals and married individuals filing separate returns, respectively. Each of these subsections refers to "married individual (as defined in section 143.)" Section 1(b) provides for the tax rates for the head of a household as defined in section 2(b). Section 2(c) provides that for the purposes of section 2(a) and (b) a person who is not considered married under section 143(b) shall be considered as unmarried. Section 143³ provides that the determination ...