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“deemed admitted admissions” and accept petitioner’s answers to
respondent’s admissions. On October 16, 2000, considering
petitioner’s presence at trial, the Court denied respondent’s
motion to dismiss and for the imposition of a section 6673
penalty. Although the case was allowed to continue, the Court
denied petitioner’s motion to withdraw the deemed admissions. At
trial on October 16, 2000, the Court consolidated petitioner’s
case with the trust’s case. After a considerable exchange
regarding his oath, petitioner testified (in general) that “I
think I filed everything I needed to, that I was required to.”
Petitioner's Income-Producing Activity
During 1994, 1995, 1996, and 1997, petitioner performed
computer analysis and programming services for Duraflame, Inc.,
and California Cedar Products, Inc. These companies paid for
petitioner’s services at an hourly rate and made payments
directly to the trust.
Petitioner did not file individual Federal income tax
returns for 1994 through 1997. Forms 1041, U.S. Income Tax
Return for Estates and Trusts, were filed on behalf of the trust
for 1994, 1995, 1996, and 1997. Respondent made the following
alternative determinations with regard to the trust: (1) The
trust is not entitled to various deductions and exemptions; (2)
it is a sham; and (3) it is a grantor trust subject to sections
671 through 679. Respondent also determined that the money paid
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