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A trust may be a sham for Federal tax purposes if the
grantor retains control over the property or income placed in the
trust and does not change how the property or income is treated.
United States v. Noske, 117 F.3d 1053, 1059 (8th Cir. 1997);
Paulson v. Commissioner, 992 F.2d 789, 790 (8th Cir. 1993), affg.
per curiam T.C. Memo. 1991-508. We generally do not recognize a
trust for Federal tax purposes if the grantor keeps substantially
unfettered powers of disposition or beneficial enjoyment of trust
property. See United States v. Buttorff, 761 F.2d 1056, 1061
(5th Cir. 1985); Schulz v. Commissioner, 686 F.2d 490, 495 (7th
Cir. 1982), affg. T.C. Memo. 1980-568; Vnuk v. Commissioner, 621
F.2d 1318, 1320 (8th Cir. 1980), affg. T.C. Memo. 1979-164.
Petitioners dealt with the alleged trust property as if it
were their own. They did not change how they conducted their
real estate and Oxyfresh businesses. They opened a checking
account for Prindle. However, they alone had signature authority
over that account. There is no evidence that anyone other than
Mr. and Mrs. Fox had any access to any property that Prindle may
have had.
Petitioners contend that Christopher Bates (Bates) was an
independent trustee and that he controlled all aspects of
Prindle. Petitioners contend that Mr. and Mrs. Fox did not have
unfettered powers of disposition or beneficial enjoyment because
they needed the concurrence of Bates for the Keyus Group (Keyus)
(formerly known as the Joinder Group) to act with respect to
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