Greg William Gouveia, a.k.a. Greg W. Gouveia, a.k.a. Greg Gouveia & Carol Ann Gorveia, a.k.a. Carol Gouveia, et al. - Page 44

                                       - 44 -                                         
          Norton v. Commissioner, supra; Lund v. Commissioner, T.C. Memo.             
          2000-334.  This factor favors respondent.                                   
                    2.   McKenzie Trust                                               
               The evidence on record with respect to Mr. Boatright’s                 
          influence and control over the McKenzie Trust is limited to the             
          appearance of his signature on various trust documents, including           
          the trust’s declaration and indenture, the checks drawn on the              
          trust’s account, and the trust’s income tax returns.  The record            
          lacks any credible evidence that Mr. Boatright functioned as an             
          independent trustee.  Mr. Boatright did not testify at trial, and           
          we conclude, based on his failure to do so, that his testimony              
          would have been unfavorable to petitioners.  Wichita Terminal               
          Elevator Co. v. Commissioner, 6 T.C. at 1165; Christal v.                   
          Commissioner, T.C. Memo. 1998-255.                                          
               It is apparent from the record that petitioner controlled              
          the operation of the McKenzie Trust.  Pursuant to the General               
          Agreement, the McKenzie Trust granted petitioner broad managerial           
          powers over the trust, which he exercised by controlling the day-           
          to-day operation of the automobile restoration business.  In                
          fact, no one other than petitioner performed any work for the               
          McKenzie Trust, and all of the income earned by the trust was               
          attributable to his expertise.                                              
               Therefore, we find that no independent trustee had any                 
          meaningful role in operating the McKenzie Trust.  See Zmuda v.              






Page:  Previous  34  35  36  37  38  39  40  41  42  43  44  45  46  47  48  49  50  51  52  53  Next

Last modified: May 25, 2011