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Respondent asserted that, alternatively: (1) The trust
arrangements are a sham and are disregarded for tax purposes; (2)
the South Denali Lands Trust is a grantor trust whose income is
taxable to Mr. and Mrs. Norton; and (3) the assignment of income
to the South Denali Lands Trust is not recognized for tax
purposes and is taxable to Mr. and Mrs. Norton. Additionally,
respondent imposed an addition to tax under section 6651(a)(1)
for failure to file and an accuracy-related penalty under section
6662(a).
Denali Company Trust
The Denali Company Trust was created in 1993 and is doing
business as SNE. The Denali Company Trust owns trucks,
equipment, and tools. These items were owned and used in the
construction business by Mr. and Mrs. Norton and then transferred
to the Denali Company Trust. Mr. Owens and Mr. Crockett are the
trustees and the signatories on the bank account. David Norton
is the protector of the trust. The beneficiaries are the Crystal
Diversified Trust and Michael Andr�. Mr. Norton is the general
manager. Mr. Norton’s day-to-day conduct of business has not
changed due to the formation of the Denali Company Trust, except
that the trust required Mr. Owens’ permission on large projects.
The trustees approved a resolution that would allow Mr. Norton
the following duties as manager:
* * * lend his name, reputation, goodwill, and good
credit standing, licenses and authorizations etc. to
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Last modified: May 25, 2011