- 20 -
absence of a trust fund), unrestricted use, nonpayment of
interest, and later application of the moneys to services are
probative but not dispositive in evaluating the existence of
complete dominion. Id. at 209-211; Highland Farms, Inc. v.
Commissioner, supra at 251; Kansas City S. Indus., Inc. v.
Commissioner, supra at 261-262; Oak Indus., Inc. v. Commissioner,
96 T.C. 559, 569-574 (1991); Michaelis Nursery, Inc. v.
Commissioner, supra.
With respect to the facts before us, here petitioner’s
customers, and not petitioner, controlled whether and when any
refund of the preneed funds would be made. The regulatory scheme
governing preneed funeral contracts expressly affords buyers the
right to cancel such contracts at any time. Mass. Regs. Code
tit. 239, secs. 4.05, 4.06(8) (2003). Further, while Mass. Regs.
Code tit. 239, sec. 4.06(8) (2003), contains a more detailed
description of the applicable cancellation procedures in the
event that a funeral trust has been established, the express text
covers preneed funeral contracts and does not limit this
cancellation right to those instances involving a funeral trust.
Accordingly, whether or not petitioner placed the preneed funds
in trust is not crucial to our analysis of the refundability
criterion.
In addition, in view of respondent’s comments on brief
suggesting that petitioner’s historical percentage of
Page: Previous 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 NextLast modified: May 25, 2011