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Attorney and Declaration of Representative. On Form 2848, Mr.
Norton designated attorney Joe Alfred Izen, Jr. to represent the
Pago Trust before the Internal Revenue Service (IRS) for tax
matters relating to the trust’s 1997, 1998, and 1999 taxable
years. Mr. Norton did not authorize Mr. Izen to perform any
specific additional acts in the power of attorney and left the
spaces on the Form 2848 for any such authorizations blank. The
IRS agent assigned to these cases accepted the Forms 56 and 2848
and never determined that they were invalid.
On August 12, 2002, Mr. Norton agreed to extend the time for
assessment of the Pago Trust’s income tax for 1998 until December
31, 2003, by signing Form 872, Consent to Extend Time to Assess
Tax.
On October 10, 2002, respondent issued a notice of
deficiency to the Pago Trust for its 1998 taxable year in which
respondent disallowed all of the Pago Trust’s deductions for
business expenses, taxes, depreciation, income distributions,
management fees, and fiduciary fees. Accordingly, respondent
increased the Pago Trust’s taxable income by $102,010.
On January 13, 2003, a timely petition for redetermination
challenging the notice of deficiency was filed in this Court on
behalf of the Pago Trust. The caption of the petition contained
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