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OPINION
COHEN, Judge: In the case at docket No. 6452-99, respondent
determined deficiencies of $12,476 and $15,260 and accuracy-
related penalties under section 6662(a) of $2,495.20 and $3,052,
with respect to Federal income taxes of petitioner Shirley L.
Johnson (Johnson) for 1996 and 1997, respectively. The
deficiencies and penalties were attributable to adjustments
related to Johnson’s receipt of income from NJSJ Asset Management
Trust (NJSJ Trust).
In the case at docket No. 6453-99, respondent determined
deficiencies of $14,056 and $17,593 and accuracy-related
penalties under section 6662(a) of $2,811 and $3,519 with respect
to petitioner NJSJ Trust’s tax liability for 1996 and 1997,
respectively. Those deficiencies were attributable to
respondent’s disallowance of Schedule C, Profit or Loss From
Business, expenses, charitable contributions, and an income
distribution deduction claimed by NJSJ Trust.
The primary issue in these consolidated cases is whether
income reported by NJSJ Trust is taxable to Johnson on
alternative grounds of lack of economic substance, assignment of
income, or grantor trust principles. The cases are now before
the Court, however, on respondent’s motions to dismiss each of
the cases for lack of prosecution and for the Court to determine
the penalty to be awarded to the United States against
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Last modified: May 25, 2011