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The evidence clearly establishes that Hillside Farm lacked
economic substance and was merely a paper entity created for the
primary purpose of reducing petitioners’ Federal income tax.
Petitioners’ relationship to their property did not differ
materially before and after the creation of Hillside Farm.
Although petitioners purported to transfer all their income-
producing personal property to Hillside Farm, in reality they
retained dominion and control over it, with their sons providing
most of the labor in return for weekly wages.
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. 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 Hillside Farm 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
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