Daniel C. Noonan - Page 11

                                       - 11 -                                         

          that a spouse's refusal to sign a joint return, for reasons                 
          unrelated to the return, does not preclude the return from                  
          qualifying as a joint return.  Federbush v. Commissioner, supra.            
          Moreover, Mrs. Noonan allegedly refused to sign the May return              
          she had received from Ms. Burton because of her belief that the             
          return might contain inaccuracies.  This excuse is not convincing           
          in that she could have easily compared it to the original in her            
          father's possession and observed that it was exactly the same.              
          Her other excuse, that she did not want to be held liable for any           
          deficiencies relating to the return, is equally not convincing in           
          that she has an adequate remedy in contract law, should it become           
          necessary.  We think that her effort to file a separate return              
          when she was not liable to do so was an effort (with or without             
          Ms. Burton's cooperation and advice) to frustrate petitioner's              
          attempt to file the joint return pursuant to their prior                    
          agreement.  Her testimony to the contrary was unpersuasive.                 
               We must, however, consider the effect of the requirement in            
          the indemnification agreement that petitioner submit funds to the           
          law firm to cover the tax liability before the law firm would be            
          responsible for filing the return.  This is a "condition                    
          precedent" under contract law and failure to comply therewith               
          usually voids the contract obligation.5                                     

          5  In California, a property settlement agreement is a                      
          contract, and the rules of contract law apply in its                        
                                                             (continued...)           




Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  Next

Last modified: May 25, 2011