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Return for Estates and Trusts (trust return), for each of the
taxable years 1996 and 1997. In separate Schedules K-1, Benefi-
ciary’s Share of Income, Deductions, Credits, etc., that Richards
Management Trust included with each of its 1996 and 1997 trust
returns, Richards Management Trust showed Mr. Richards and
Richards Charitable Trust as beneficiaries and Mr. Richards as
the fiduciary of Richards Management Trust.
In each of its 1996 and 1997 trust returns, Richards Manage-
ment Trust deducted depreciation with respect to certain personal
assets of Mr. Richards, including Mr. Richards’ personal resi-
dence that he had transferred to Richards Management Trust at a
time that is not disclosed by the record. Richards Management
Trust also deducted other amounts in its 1996 and 1997 trust
returns with respect to personal expenses of Mr. Richards.
During respondent’s examination of Richards Management
Trust’s 1996 and 1997 trust returns and thereafter, no books,
records, or other information was provided to respondent estab-
lishing (1) the jurisdiction under the laws of which Richards
Management Trust was purportedly organized, (2) the person who is
authorized to act on behalf of Richards Management Trust, and
(3) that Richards Management Trust was at all relevant times a
trust cognizable for Federal tax purposes. Nor did Richards
Management Trust at any time provide any books, records, or other
information to respondent establishing the income reported and
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Last modified: May 25, 2011