Universal Trust 06-15-90 - Page 8




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                    gross receipts was determined using the bank deposits method.                                                                                          
                    The notice also disallowed, for lack of substantiation, the                                                                                            
                    $51,865 expense and $31,210 distribution deductions claimed on                                                                                         
                    the Form 1041.  As a result of these adjustments, the notice                                                                                           
                    determined that there was a $37,312 deficiency in petitioner’s                                                                                         
                    income tax and that petitioner was liable for a $7,462 accuracy-                                                                                       
                    related penalty under section 6662(a).                                                                                                                 
                              As previously indicated, see supra p. 4, we have held that                                                                                   
                    most of the income that is the subject of the three “whipsaw”                                                                                          
                    notices, including the notice in the case at hand, is properly                                                                                         
                    taxable to Mr. Johnston, and that all but $25 of the balance was                                                                                       
                    paid for work done by Ms. Ghavami.  See Johnston v. Commissioner,                                                                                      
                    T.C. Memo. 2000-315.                                                                                                                                   
                    Facts Relating Primarily to Respondent’s Motion To Dismiss                                                                                             
                              As noted above, the original indenture provided that Four WS                                                                                 
                    TT01 was petitioner’s first trustee.                                                                                                                   
                              The record contains almost no information about Four WS                                                                                      
                    TT01.8  Mr. Chisum testified that Four WS TT01 is a trust, and                                                                                         
                    that Mr. Chisum was (and is) its managing agent and trustee.                                                                                           
                    However, Mr. Chisum did not offer and the record does not contain                                                                                      
                    any trust indenture, corporate charter, partnership agreement, or                                                                                      

                              8 In response to the Court’s question at the hearing,                                                                                        
                    Mr. Chisum testified that the “Four WS” in the name Four WS TT01                                                                                       
                    stood for the question-phrase “What’s Wrong With White?”                                                                                               






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