- 14 -
further that she did not really view the trust as being separate
from herself.9
The record does not establish that Parnell and Armageddon
were independent trustees or that they performed any significant
duties or exercised any significant control or power over the
farm or parts businesses. Contrary to the terms of Article IV,
Section 3, of the Declaration of Trust, Parnell and Armageddon
did not have “absolute and exclusive power and control over the
management and conduct of the business”. Petitioners concede
that Inman and Foshaug were strangers to Oak Hill and were
nothing more than figurehead presidents of the corporate
trustees, merely signing documents, often blank or incomplete, at
the instigation of the Noskes. The use of strangers as signers
of organizational documents and the absence of any meaningful
role by nominal trustees in the operation of the trust are
evidence that the purported trust lacks economic substance. See
Para Techs. Trust v. Commissioner, T.C. Memo. 1994-366, affd.
without published opinion sub nom. Anderson v. Commissioner, 106
F.3d 406 (9th Cir. 1997), and cases cited therein.
9 Petitioners argue that petitioner husband curtailed his
involvement in the farm and parts businesses after 1985 because
of health problems. Any such curtailment of petitioner husband’s
activities, however, cannot credibly be attributed to the
existence of Oak Hill, allegedly created 2 years previously. In
any event, petitioner husband continued to serve a managerial and
supervisory role in the farm’s operation even after 1985.
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