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him. Because Mr. Norton never possessed the Pago Trust’s
checkbook, on the few occasions he and petitioner met each year,
Mr. Norton signed several blank checks at a time, as well as
checks that petitioner had already filled out.
Mr. Norton’s lack of participation in the Pago Trust is
further demonstrated by his failure to review any of the trust’s
formation documents before signing them, his failure to review
any of the Pago Trust’s business records or the income tax
returns he signed, and his failure to inquire into the
reasonableness of the management fees the Pago Trust paid
petitioner. Moreover, Mr. Norton never participated in selecting
the Cross Street property or in any decisions with regard to its
development, and the record lacks any credible evidence that Mr.
Norton controlled any significant trust decisions.
In contrast, petitioner exercised complete control over the
trust’s assets and made all decisions relating to the trust’s
daily business under the authority granted to him in the
maintenance and manager agreements. Moreover, petitioner
maintained the unfettered discretion to determine the amount of
his own management fees.
As a result, we find that no independent trustee had any
meaningful role in operating the Pago Trust. See Markosian v.
Commissioner, supra at 1243; Zmuda v. Commissioner, supra at 720;
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