Marvin L. Barmes and Barbara J. Barmes - Page 35




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               The Sovereignty promotional materials included copies of two           
          letters.  The first was a letter dated March 29, 1996, written by           
          “Gregory P. Karl, CPA”, and addressed to “Chuck Felthaus, Chief-            
          Accounting Branch, Internal Revenue Service” in Philadelphia,               
          Pennsylvania (Karl letter).  The second was a letter dated                  
          December 17, 1996, written by “Charles F. Felthaus, Chief,                  
          Accounting Branch”, and addressed to “Gregory Paul Karl”                    
          (Felthaus letter).  The Karl letter stated in pertinent part:               
               I have a number of Pure Trust clients and I have an                    
               urgent request.  Please let me know the income tax                     
               requirements for a Pure Trust Organization as well as                  
               the proper procedure for obtaining an Internal Revenue                 
               Service issued Employer Identification Number for them.                
          The Felthaus letter stated in pertinent part:  “We cannot process           
          your application for a [sic] Employer Identification Number.  A             
          Pure Trust organization has no tax requirements, therefore a                
          [sic] Employer Identification Number is not required.”                      
               The Sovereignty promotional materials also included a                  
          document entitled “Pure Trust Organization Application” (applica-           
          tion).  The application requested certain information, including            
          the “settlor’s”22 name and address, the name of the pure trust              
          organization, the names of the trustees, whether each trustee was           
          to have signatory authority over any bank accounts, the names of            
          the beneficiaries, and the number of so-called capital units each           

               22The application stated:  “The Settlor(s) is/are the indi-            
          vidual(s) who will be transferring property into the ‘Trust                 
          Estate’”.                                                                   





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