Internal Revenue Service
Revenue Ruling
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smRev. Rul. 78-27
1978-1 C.B. 387
IRS Headnote
Returns; spouse's signature signed by taxpayer. A spouse who made a gift, the value of which exceeded the credits and exclusions if gift-splitting were properly elected, may not validly sign the name of the other spouse on the taxpayer signature line or consent of spouse line of returns to elect gift-splitting in the absence of facts or circumstances permitting such signature as agent as provided by section 25.6019-1(d) of the regulations. The filing of correctly signed amended returns by the taxpayer and his spouse, filed beyond the time prescribed in section 2513(b) of the Code, will not perfect the prior returns.
Full Text
Rev. Rul. 78-27
Advice has been requested whether, under the circumstances described below, the signature by a taxpayer of the spouse's name on a gift return is sufficient to signify the spouse's consent for the purpose of section 2513(a) of the Internal Revenue Code of 1954.
A and B, a married couple, are residents of a non-community property state. In December 1975, X, A and B's child received a gift of 20 acres of land that had been recorded in A's name. The value of the gift exceeded the credits and exclusions allowable if gift-splitting was properly elected. A timely filed a gift tax return for the fourth quarter of 1975 on February 15, 1976, reporting the taxable gift. While at A's attorney's office, A signed on the taxpayer signature line of the return and, as a matter of minor personal convenience to B who was at home, also signed B's name on the consent of spouse signature line. A also timely filed the gift tax return required to be filed by B for the fourth quarter of 1975 on February 15, 1976. No gifts were reported on that return. As a matter of personal convenience A signed B's name to the taxpayer signature line.
In April 1977, A filed an amended gift tax return for the fourth quarter of 1975, reporting the gift. A signed the taxpayer signature line and B signed the consent of spouse signature line. In April 1977, B also filed an amended gift tax return for the fourth quarter of 1975 on which no gifts were reported. B signed the taxpayer signature line.
Section 2513(a) of the Code provides that a gift made by a taxpayer to any person other than a spouse shall be considered as made one-half by the taxpayer and one-half by the taxpayer's spouse if both spouses have signified their consent for all such gifts made during the calendar quarter.
Section 2513(b) of the Code provides that such consent may be signified at any time after the close of the calendar quarter in which the gift was made, but not after a return for such calendar quarter is filed by either spouse.
Section 25.6019-1(d) of the Gift Tax Regulations provides that a return shall not be made by an agent unless by reason of illness, absence, or nonresidence, the person liable for the return is unable to make it within the time prescribed. If by reason of illness, absence or nonresidence, a return is made by an agent, the return must be ratified by the donor or other person liable for its filing within a reasonable time after such person becomes able to do so. If the return filed by the agent is not so ratified, it will not be considered the return required by the statute. If a return is signed by an agent, a statement fully explaining the inability of the donor must accompany the return.
Section 25.6019-2 of the regulations provides that section 25.6019-1 is applicable with respect to the filing of a gift tax return on returns in the case of a husband and wife who consent to the application of section 2513 of the Code.
Rev. Rul. 54-6, 1954-1 C.B. 205, based on provisions of the 1939 Code and regulations thereunder (substantially the same as the 1954 Code and regulations), provides that gift-splitting provisions apply where one spouse filed a Federal gift tax return and, in addition to signifying consent, executes thereon as agent for the absent spouse a consent to treat the gift as having been made one-half by each spouse, and as such agent also files a gift tax return for the absent spouse, provided that the return and consent executed by the one spouse as agent for the other are ratified within a reasonable time after the absent spouse is able to do so.
In the instant situation no facts are present that would have permitted A to file B's gift tax return as agent or to consent to gift-splitting as an agent under section 25.6019-1(d) and section 25.6019-2 of the regulations. B was not unable to make a return or to consent to gift-splitting because of illness, absence or nonresidence. No statement explaining the inability of the donor accompanied the return and no statement ratifying the return was filed within a reasonable time. B's signature on the amended returns filed in April 1977 did not meet the signification requirements of section 2513(b) of the Code.
In Edwin L. Jones v. Commissioner, 327 F.2d 98 (4th Cir. 1964), the Court held a spouse's signature was not required to signify consent to gift-splitting under section 2513 of the Code. In that case no taxes would have been assessable if the gifts listed in the returns had been split between the spouses. Consent to gift-splitting for the year in question was supported by the express consents for the splitting of other gifts in returns for earlier years.
The Jones case is distinguishable from this case because here there were no previous express consents by B to support gift-splitting, and unlike Jones, B by consenting to gift-splitting, would become jointly and severally liable for A's gift tax liability and B's gift tax liability.
Accordingly, the signature by A of B's name on the gift tax return filed on February 15, 1976, was not sufficient to signify B's consent to have gifts made by A considered as made one-half by A and one-half by B. The filing of the amended returns did not perfect the prior attempt to elect gift-splitting. Also, such filing was not itself a valid gift-splitting election since it did not occur within the period prescribed in section 2513(b) of the Code.