Michael T. Carey and Leone R. Carey - Page 9

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          Robert Hogue allowed petitioner to do so.  Robert Hogue did not             
          act as an independent trustee or control any aspects of                     
          petitioners’ trusts.  Thus, we do not recognize petitioners’                
          trusts as trusts for Federal income tax purposes, and the money             
          paid to those trusts is taxable to petitioners.  We will grant              
          summary judgment with respect to the invalidity of petitioners’             
          trusts.  Accord Residential Mgmt. Servs. Trust v. Commissioner,             
          T.C. Memo. 2001-297 (involving the Careys’ income tax liability             
          for 1995).                                                                  
               2.   Unreported Income and Failure To Timely File                      
               Petitioners admitted that petitioner received but did not              
          report $1,221,680 in 1997 as income from his health care                    
          facilities.  Petitioners also admitted that they filed their                
          return for 1997 late and that they are liable for an addition to            
          tax for failure to timely file their 1997 return and an accuracy-           
          related penalty under section 6662(a) for negligence for 1997.              
          Thus, we will grant respondent’s summary judgment motion with               
          respect to petitioners’ taxability on the self-employment and               
          interest income and petitioners’ liability for the addition to              
          tax for late filing and the accuracy-related penalty.                       
               3.   Deductions                                                        
               Petitioners have admitted that they did not have or provide            
          to respondent substantiation or documentation for car and truck,            
          office, and mortgage interest expenses they deducted on their               






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