MatrixInfoSys Trust - Page 7




                                        - 7 -                                         
          “deemed admitted admissions” and accept petitioner’s answers to             
          respondent’s admissions.  On October 16, 2000, considering                  
          petitioner’s presence at trial, the Court denied respondent’s               
          motion to dismiss and for the imposition of a section 6673                  
          penalty.  Although the case was allowed to continue, the Court              
          denied petitioner’s motion to withdraw the deemed admissions.  At           
          trial on October 16, 2000, the Court consolidated petitioner’s              
          case with the trust’s case.  After a considerable exchange                  
          regarding his oath, petitioner testified (in general) that “I               
          think I filed everything I needed to, that I was required to.”              
          Petitioner's Income-Producing Activity                                      
               During 1994, 1995, 1996, and 1997, petitioner performed                
          computer analysis and programming services for Duraflame, Inc.,             
          and California Cedar Products, Inc.  These companies paid for               
          petitioner’s services at an hourly rate and made payments                   
          directly to the trust.                                                      
               Petitioner did not file individual Federal income tax                  
          returns for 1994 through 1997.  Forms 1041, U.S. Income Tax                 
          Return for Estates and Trusts, were filed on behalf of the trust            
          for 1994, 1995, 1996, and 1997.  Respondent made the following              
          alternative determinations with regard to the trust:  (1) The               
          trust is not entitled to various deductions and exemptions; (2)             
          it is a sham; and (3) it is a grantor trust subject to sections             
          671 through 679.  Respondent also determined that the money paid            






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Last modified: May 25, 2011