- 12 - Like for instance, if I made, let’s say 40,000 in a year, I only had to pay Social Security on that 8,000 that I paid myself. But let’s say the other balance of the 32,000, I had to pay income tax on, but not Social Security tax. That was my understanding. I guess what you’d say is for tax reasons. Based on Richard Pelham’s testimony and the totality of the evidence, we conclude that the primary purpose of establishing the trust was to avoid employment tax. The trust lacked independent economic substance. Richard Pelham was, in substance, the grantor of the trust. Thus, the income and expenses from the operations of Lake Lock & Key during the years in issue are attributable to the Pelhams and not to the trust. The Pelhams are liable for self-employment taxes on the net income of Lake Lock & Key for the years in issue. To reflect the foregoing and concessions of the parties, Decisions will be entered under Rule 155.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12
Last modified: May 25, 2011