Prindle International Marketing, UBO, Keyus Group, Trustee - Page 10

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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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