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than creation of income tax losses, it will not be recognized for
tax purposes. Zmuda v. Commissioner, 731 F.2d 1417, 1421 (9th
Cir. 1984) (citing Thompson v. Commissioner, 631 F.2d 642, 646
(9th Cir. 1980), affg. 66 T.C. 1024 (1976)), affg. 79 T.C. 714
(1982).
Petitioner is not a stranger to disregarded trusts. In
Castro v. Commissioner, T.C. Memo. 2001-115, this Court held that
a trust created by DSG for Kevin Castro was a “flagrant tax
avoidance scheme” and properly disregarded for Federal tax
purposes because it lacked economic substance.11 Petitioner’s
involvement, himself and through DSG, in disregarded trusts as in
Castro and in the instant case demonstrates his continued
association with sham transactions and is further evidence of
fraudulent conduct.
8. Failing To Make Estimated Tax Payments
Petitioner did not file estimated tax forms or timely pay
his taxes due for the years in issue. When asked at trial
whether petitioner could recall whether he made any estimated tax
payments for the years at issue, petitioner replied: “No, I did
not.” Moreover, there is no evidence in the record that
petitioner made any payments for estimated taxes.
11 The Court notes that counsel for petitioners in Castro v.
Commissioner, T.C. Memo. 2001-115, and in the instant case is the
same individual.
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