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Background
For purposes of respondent’s motion and petitioners’ motion,
the parties do not dispute the following factual allegations that
are part of the record. At all relevant times, each petitioner
was a trust organized under the laws of the State of Arizona and
was engaged in business in that State. Each petitioner filed a
Federal income tax return (return) for 1994, which was signed by
Jimmy C. Chisum as agent for the trustee. Neither of those
returns contained the name of the trustee or any information that
enabled respondent to determine who the trustee of each peti-
tioner was at the time each such return was filed.
Upon commencement of the examination of the 1994 return
filed by each petitioner, respondent requested that each peti-
tioner provide respondent with complete copies of the trust
documents relating to each such petitioner as well as other items
of substantiation. Each petitioner refused to provide respondent
with the trust documents and other information requested.
At the time respondent issued the notice of deficiency
(notice) to each petitioner, respondent’s address records indi-
cated an entity named D & E Sword Co. as the trustee for each
petitioner. Respondent’s address records were not based on any
trust documents or other legal documents submitted by each
petitioner that could constitute credible evidence regarding who
was/is the trustee of each petitioner. Instead, respondent’s
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Last modified: May 25, 2011