- 9 -
affg. per curiam T.C. Memo. 1969-48; Clark v. Commissioner, 266
F.2d 698, 708-709 (9th Cir. 1959), affg. in part and remanding in
part T.C. Memo. 1957-129; Tokarski v. Commissioner, 87 T.C. 74,
77 (1986); see also Hawkins v. Commissioner, T.C. Memo. 1993-517,
affd. without published opinion 66 F.3d 325 (6th Cir. 1995).
The Court of Appeals' opinion in United States v. Scott,
supra, is most helpful to us in understanding the form,
substance, and operation of Ideal Management. The opinion
describes in detail how the trusts were marketed as a device for
a purchaser to eliminate his or her income tax liability without
losing control of his or her money and other assets. Like the
trust at hand, the trusts in Scott were generally structured so
that it would appear that the trust income was distributed to
foreign trust beneficiaries, which then redistributed the income
to other foreign trust beneficiaries that were outside the reach
of the U.S. taxing arm. Id. at 1570. Other relevant
characteristics of the trusts examined in United States v. Scott,
supra, include that:
(1) The purchasers transferred their property, including
houses, into trust;
(2) the trusts claimed depreciation deductions for the
property;
(3) the trusts were reported to the Commissioner as simple
trusts;
(4) Mr. Yung was a trustee;
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