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The issue for decision is whether United Sovereigns "A
Trust" (United Sovereigns) is a nullity or sham trust.2
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulation of facts and the attached exhibits are
incorporated herein by this reference. Petitioners Neil J.
Christal (Mr. Christal) and Kathryn E. Christal (Mrs. Christal),
husband and wife, resided in Belmont, California, at the time
they filed their petition.
In 1986, Mr. Christal, Gregory Phelps (Mr. Phelps), and Dan
Cantore formed a corporation named United Sovereigns, Inc.
United Sovereigns, Inc., was a "multi-level" organization which
promoted the principles of network marketing and offered services
and activities to customers including, but not limited to, a
monthly newsletter, tax services, and estate planning. The
customers of United Sovereigns, Inc., paid $50 a month to receive
these services. Customers of United Sovereigns, Inc., could have
the monthly fee withdrawn automatically from their bank account
1(...continued)
the Tax Court Rules of Practice and Procedure.
2 The statutory notice of deficiency sets forth numerous
adjustments. In their briefs, petitioners only address whether
United Sovereigns was a nullity or sham trust and fail to address
any other adjustments in the notice of deficiency. Therefore, we
find that petitioners have abandoned all issues other than
whether United Sovereigns was a nullity or sham trust. Petzoldt
v. Commissioner, 92 T.C. 661, 683 (1989).
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