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Prindle, and that Bates and Keyus participated in telephone
meetings about Prindle, monitored Prindle's expenditures, and
kept Prindle's records. Mrs. Fox testified that after she wrote
a check on the Prindle account to K-Mart for clothes, Bates
prevented her from using the Prindle account to pay it. She did
not explain how Bates did that. She could not recall whether she
repaid Prindle for those clothes. Mrs. Fox later testified that
Bates allowed her to use the Prindle account to pay for clothes
if they were going to a seminar. Petitioners offered no other
examples of actions Bates or Keyus took with Prindle's income or
property. Mr. Fox testified that neither Bates nor Keyus had any
rights to any of Prindle's assets. We conclude that Bates did
not control Prindle's purported assets.
2. Prindle Lacked Economic Substance
A trust which has no economic substance is not recognized
for Federal tax purposes. Zmuda v. Commissioner, 731 F.2d 1417,
1421 (9th Cir. 1984), affg. 79 T.C. 714 (1982); Markosian v.
Commissioner, 73 T.C. 1235, 1245 (1980); Furman v. Commissioner,
45 T.C. 360, 364 (1966), affd. per curiam 381 F.2d 22 (5th Cir.
1967). Petitioners presented no credible evidence that they
established Prindle for any reason other than tax avoidance.
Petitioners contend that Frank Lyon Co. v. United States,
435 U.S. 561 (1978), and Sacks v. Commissioner, 69 F.3d 982, 988
(9th Cir. 1995), revg. and remanding T.C. Memo. 1992-596, require
us to recognize Prindle for Federal income tax purposes and
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