When my brother and I were very young, my father established a trust
fund for us.  The main purpose of the trust was to fund our college
educations.  In the
ownership of the trust is a producing oil well.  The royalty payments
from the oil well operator come monthly are payable to:

Son1 Qpublic and Son2 Qpublic Trust
Father Qpublic Trustee

Assuming of course that Qpublic is our family name.  

Over the past 25 years, these monies were supposed to be deposited
into a trust account at a brokerage firm.  For Most of those 25 Years,
The royalty payments were spent by father directly and for most of
these 25 years, taxes were not paid on the Oil Royalties. 
Consequently, the funds were not available when it came time to
financing college.

My brother and I are both adults now.  The oil well is still owned by
the trust and the checks are still made out to the trust.  My father
is still spending the money from the royalty payments and I am pretty
sure he is not paying taxes on it.

My concern is not the misuse of funds.  Rather I am concerned about
tax issues.  Are my brother and I liable for the non payment of
federal and state taxes even though we have never had access to the
trust or control over the funds?

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Clarification of Question by farblonjet-ga on 20 Jan 2006 17:30 PST

I am concerned about the tax consequences of the non payment of taxes
from the Trusts inccome from the oil well royalties. Are my brother
and I in a pickle?

thanks

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Clarification of Question by farblonjet-ga on 20 Jan 2006 17:35 PST

Oh, the trust does not own an entire oil well, only a fraction of a
percentage of an oil well.  otherwise, that would be like a millions
and millions of dollars of income over the last 25 years.

Would it be wise for my brother and I to hire a lawyer to get our
names of the deed for the oil well?

Are you absolutely certain that no taxes have been paid or are you
just guessing about that aspect?  You children would have no tax
liability, so you can quit worrying about that.

What state is applicable here?  You can contact your state tax
authority's website to find out the phone number or address or e-mail
to contact them to file a complaint about possibly unpaid taxes to ask
them to investigate (and also contact federal tax authority through
www.irs.gov, and even if you leave your name the investigation would
give you anonymity and father would not be able to identify you as the
complainers.  Certainly would be best for him if taxes are unpaid for
him to get this straightened out while he is still alive.

Have you all discussed this matter with your father?  Do you intend to
go to college and do you need this money for that or will you all get
it from other sources?  This is irresponsible behavior on his part. 
Have you seen the trust and does it specify who will be trustee after
he dies?  I understand your reluctance to make a big issue with him,
but if he wants to keep the money he should dissolve the trust, unless
his intentions are to eventually stop taking the money until after he
dies and then let you all get the payments.

Taking your names off the deed will not accomplish much of anything,
and the deed is probably in the name of the trust anyway.  If you have
any questions that are unresolved you should be discussing this with a
trust attorney or tax accountant/CPA.

4KEITH (I'm NOT a GOOGLE Researcher)
Accountant

I forgot to mention that after the state tax authority investigates,
they will tell you definitively whether your father owes any taxes or
whether he has paid and/or is in the clear.  Perhaps you want to
complain to the state tax authority first and see what their
investigation shows before you go to the federal tax authorities.

4KEITH (I'm NOT A GOOGLE Researcher)

My concern is not the money and have allready gone to college.  My
only concern is if my brother and I are liable for the property taxes
(oklahoma) and state and federal income taxes.