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to do certain things not stated in the record to receive payments
from Oxyfresh, and he testified that his income from all Oxyfresh
sales had stopped for a while because others performed better
than he did. This suggests that income from Oxyfresh would not
continue after he died.
Finally, the fact that petitioners thought they could use
Prindle for estate planning3 does not help them because the
expectancy of such an advantage does not establish entitlement to
an income tax advantage.
Petitioners contend that Mr. and Mrs. Fox's children are the
beneficiaries of Prindle, but the record is unclear on this
point. Some trust documents that Smith prepared and Mr. and Mrs.
Fox signed stated that Mr. and Mrs. Fox were Prindle's
beneficiaries, while others indicated that Mr. and Mrs. Fox's
children were beneficiaries.
Prindle did not file income tax returns to report income
that Mr. and Mrs. Fox deposited in the Prindle account from
Oxyfresh and the real estate business. Petitioners' position
that Prindle was not a sham is undermined by the fact that Mr.
and Mrs. Fox did not treat Prindle as if it were a taxpayer.
Also, there is no evidence that Mr. and Mrs. Fox filed gift tax
returns reporting the alleged transfer of property to Prindle.
Sec. 2501.
3It is not clear whether they meant to avoid probate, estate
tax, or inheritance tax.
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