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For every year from 1979 through 1987, petitioner and her
husband, John E. Hansen, filed a joint Federal income tax return
on which the Hansens reported a large overpayment, which they
elected to be applied to the following year's tax liability. An
examination of the Hansens' 1981 tax return resulted in a
deficiency which was paid in 1986 out of the amount then standing
to the credit of the Hansens in their 1986 income tax account.
Moreover, the Hansens' returns for 1984, 1985, and 1986 were
examined by respondent's agents, resulting in the assessment of
substantial deficiencies and additions to tax in 1988, which in
turn were paid in part as a result of collection activities by
respondent.
Whether or not as a result of this history, when the Hansens
filed a 1988 Federal income tax return on August 16, 1989, the
words "under penalties of perjury" (the jurat) were crossed out.2
Similarly, on a subsequent date, the Hansens filed a 1989 joint
income tax return on which the jurat was deleted. As a result of
these two filings, respondent determined that no valid return was
filed for 1988 or 1989, and assessed a frivolous return penalty
of $500 under section 6702 for each of those filings.
2 For convenience, we will refer to this document as the
1988 return, even though we do not intend to validate it as a
return, in view of the deletion of the jurat. The 1988 return
reflected a tax liability of $3,494.05, and an overpayment of
$22,945.28, of which $10,000 was requested to be refunded and the
balance to be applied to the 1989 estimated tax.
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