What If The IRS Audits The Trust
The IRS typically audits what it has a paper trail for. So if required to file a tax return for the trust, they are able to initiate an audit process. Typically, it works like this: If one has submitted a return, there is very little that can be done, as one has successfully given jurisdiction over to the IRS. If they take the trust to court, and one has filed a return, the IRS has established venue and jurisdiction to get a ruling. If one did not submit a return, then one only need to appear before the court by "Special Appearance" and challenge the Venue, as only a court of legal competence like an Article III court of equity can do. If that fails (only because one didn't challenge venue correctly) then one can challenge the subject-matter jurisdiction. Which ends with a rightly-furious judge telling the Plaintiffs [The IRS] to never bring such a suit before their courtroom again. Yet another alternative involves bringing up the principle of lawful money redemption (if one has already redeemed with proof). The IRS will never allow this subject to be brought up in any court - leading to a relatively quick dismissal.
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