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FINDINGS OF FACT
Some facts have been stipulated and are so found. The
stipulated facts and exhibits submitted therewith are
incorporated herein by this reference. Petitioners are husband
and wife who resided during the relevant years in the State of
Washington without a separate property agreement. They filed a
joint 1994 Federal income tax return on November 19, 1996.
Neither of them filed a 1995 Federal personal income tax return.
Mr. Fox is a college graduate who worked in the U.S.
military for 20 years. He also completed some graduate work in
business administration including a course in taxation. He and
Ms. Fox worked during the subject years as distributors for
Oxyfresh, Inc. (Oxyfresh), a wholesaler of health care products.
In that capacity, they sold Oxyfresh products and recruited and
trained individuals to do the same.
Petitioners created the Prindle Trust in 1991 and have
continued to manage and operate the Prindle Trust in the same
manner throughout its existence. Petitioners were the Prindle
Trust’s managing agents, trustees, and beneficiaries. They also
controlled its bank account. In Prindle Intl. Mktg., UBO v.
Commissioner, T.C. Memo. 1998-164, affd. without published
opinion 229 F.3d 1157 (9th Cir. 2000), we decided (and the Court
of Appeals for the Ninth Circuit agreed) that the Prindle Trust
was without economic substance and was formed for tax avoidance.
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Last modified: May 25, 2011