- 16 - In this case, there are multiple factual issues relevant to determining petitioners’ tax liability. Petitioners have not addressed or provided any evidence concerning $61 of interest income or substantiated expenses claimed by the OMK trusts. Consequently, section 7491(a)(2) does not place on respondent the burden of proving those factual issues. The resolution of the remaining issues does not depend on which party has the burden of proof. We resolve those issues on the preponderance of the evidence in the record. I. Income of the OMK Trusts Is Taxable to Petitioners Respondent determined that the OMK trusts should be disregarded for Federal income tax purposes and the income reported by the trusts taxed to petitioners. Courts have consistently invalidated similar trusts for Federal income tax purposes. Those courts that have been faced with the issue have been uniform in their determinations that those entities will not allow a taxpayer to shift the incidence of taxation away from himself to the trust. We cite only a few of the many cases so holding. See, e.g., Zmuda v. Commissioner, 731 F.2d 1417 (9th Cir. 1984), affg. 79 T.C. 714 (1982); Holman v. United States, 728 F.2d 462 (10th Cir. 1984); O’Donnell v. Commissioner, 726 F.2d 679 (11th Cir. 1984); Hanson v. Commissioner, 696 F.2d 1232 (9th Cir. 1983), affg. T.C. Memo. 1981-675; Schulz v. Commissioner, 686 F.2d 490 (7th Cir. 1982),Page: Previous 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Next
Last modified: May 25, 2011