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Oliver & Co. did not report the asphalt business net income
on any return for 1996 through 1999. On its Form 1041-A, U.S.
Information Return Trust Accumulation of Charitable Amounts, for
2000, dated September 25, 2002, Oliver & Co. reported income from
AMC Trust in the amount of $79,567, charitable deductions of
$73,567, and fiduciary fees of $6,000, leaving zero net income.
Oliver & Co. made no distribution to any charitable beneficiary
during the years in issue.
The Oliver & Co. Form 1041-A was filed after examination of
petitioners’ returns commenced. When Joey was contacted about
the examination of AMC Trust, he referred the revenue agent
conducting the examination to J.O. The Haneys sent to the
revenue agent a document entitled “Notice of Expatriation and
Repatriation” dated March 11, 2002, in which they purported to
disavow their citizenship in the United States and “repatriate
back into the Texas Republic”.
The Internal Revenue Service commenced a proceeding to
enforce a summons, and by order filed June 12, 2002, J.O. and
Joey were ordered to produce the records and materials requested
in the summons. On July 1, 2002, the U.S. District Court for the
Western District of Texas, San Antonio Division, filed an order
finding, among other things, that J.O. and Joey “had submitted a
series of ‘tax protestor’ type responses to the summons and had
not complied with the May 9, 2002 Order.” The Court order
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