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Management fees
reported as
Trust Schedule C
Year Interest distribution gross receipts
1995 $3,711 $2,349 -0-
1996 3,026 3,712 $24,589
1997 1,523 3,261 27,726
1998 Unable Unable Unable
to to to
determine1 determine1 determine1
1Schedules B, C, D, and E were not attached to the copy of
the Gouveias’ Form 1040, U.S. Individual Income Tax Return, for
1998 that is included in the record. The Gouveias reported
$30,208 of Schedule C net profit on their 1998 Form 1040.
None of the Gouveias’ tax returns for the years at issue
identified the McKenzie Trust as the source of any income
reported on the returns. It appears, however, that the
management fees reported on Schedules C attached to some of the
Gouveias’ tax returns for the years at issue were those paid by
the McKenzie and/or Pago Trusts.
On May 17, 2001, the Gouveias agreed to extend the time for
assessment of their income tax for 1997 until June 30, 2002, by
signing Form 872; on April 10, 2002, the Gouveias agreed to
further extend that date until June 30, 2003, and signed another
Form 872. On August 14, 2002, the Gouveias signed Form 872 for
their 1998 taxable year, which extended the time for assessment
until December 31, 2003.
On October 7, 2002, respondent issued a notice of deficiency
for 1995 and 1996, which was issued more than 3, but less than 6,
years after the 1995 and 1996 returns were filed. On October 10,
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