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Upon the formation of NHUSS Trust, NHUSS, Inc., purportedly
contributed all of its assets relating to petitioners’ furniture
business to NHUSS Trust. It is unclear what, if any, assets were
purportedly contributed to RJ Pendergraft Trust and to In God We
Trust.
On May 31, 2002, petitioners reported to respondent their
status as trustees of the above three trusts on separate Forms
56, Notice Concerning Fiduciary Relationship.
For 1999 and 2000, petitioners’ joint individual Federal
income tax returns and the three trusts’ Federal income tax
returns were prepared by Sam Fung (a.k.a. Fong), purportedly a
certified public accountant.
In connection with the preparation of their joint Federal
income tax returns, petitioners provided to Mr. Fung check
registers relating to petitioners’ furniture business along with
a summary of the various related expenses (e.g., cost of goods
sold and transportation).
Petitioners reported on their joint Federal income tax
returns for 1999 and 2000 nominal wages as taxable income, which,
after petitioners’ personal exemptions, was reduced to zero
taxable income and resulted in no tax liability being reported on
petitioners’ joint individual Federal income tax returns for 1999
and 2000.
On trust Federal income tax returns for 1999 and 2000, filed
with respondent on behalf of NHUSS Trust, the income of the
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Last modified: May 25, 2011