-3-
respondent’s determinations of the additions to tax and
penalties.3 We sustain those determinations in full.
I. Background
Petitioners were previously before the Court for taxable
years 1997 and 1998 in the cases of God’s Helping Hands Living
Estate Plan Trust, John M. & Thelma Smoll, Trustees v.
Commissioner, docket No. 8468-01, and John M. & Thelma Smoll,
Trustees v. Commissioner, docket No. 8489-01. Those cases were
resolved with a Closing Agreement on Final Determination Covering
Specific Matters (closing agreement). That litigation involved a
dispute between the parties as to whether God’s Helping Hands
Living Estate Plan Trust should be recognized for Federal income
tax purposes. God’s Helping Hands Living Estate Plan Trust had
been established by petitioners and purported to operate a
farming business, holding title to the Smoll family residence,
vehicles, and other personal assets, along with deducting the
personal living expenses of the taxpayers. The closing agreement
provided the following:
NOW IT IS HEREBY DETERMINED AND AGREED FOR FEDERAL
INCOME TAX PURPOSES THAT:
1. The God’s Helping Hands Living Estate Plan shall
be disregarded for federal income tax purposes;
2. The taxpayers agree that there was no substantial
change in the manner in which they transacted their
3 At trial, the Court informed the parties that it would
grant respondent’s motion with respect to the deficiencies in
Federal income tax.
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