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Robert Hogue allowed petitioner to do so. Robert Hogue did not
act as an independent trustee or control any aspects of
petitioners’ trusts. Thus, we do not recognize petitioners’
trusts as trusts for Federal income tax purposes, and the money
paid to those trusts is taxable to petitioners. We will grant
summary judgment with respect to the invalidity of petitioners’
trusts. Accord Residential Mgmt. Servs. Trust v. Commissioner,
T.C. Memo. 2001-297 (involving the Careys’ income tax liability
for 1995).
2. Unreported Income and Failure To Timely File
Petitioners admitted that petitioner received but did not
report $1,221,680 in 1997 as income from his health care
facilities. Petitioners also admitted that they filed their
return for 1997 late and that they are liable for an addition to
tax for failure to timely file their 1997 return and an accuracy-
related penalty under section 6662(a) for negligence for 1997.
Thus, we will grant respondent’s summary judgment motion with
respect to petitioners’ taxability on the self-employment and
interest income and petitioners’ liability for the addition to
tax for late filing and the accuracy-related penalty.
3. Deductions
Petitioners have admitted that they did not have or provide
to respondent substantiation or documentation for car and truck,
office, and mortgage interest expenses they deducted on their
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