Lund

MEMORANDUM *

Appellants (“Lunds”) appeal the decision of the Tax Court sustaining the Commissioner Of Internal Revenue’s (“Commissioner”) determination that Robert Lund (“Lund”) was operating a sham trust (“The *593 Zero Gee Trust”) and that the Lunds were personally hable for tax on the income purportedly earned by the trust in 1994, 1995, and 1996, and were personally hable for negligence penalties for failure to pay the tax when due. We have jurisdiction pursuant to 26 U.S.C. § 7482 . We affirm the decision of the Tax Court in ah respects.

Trusts lacking in economic substance are considered shams and are properly disregarded for federal income tax purposes. Zmuda v. C.I.R, 731 F.2d 1417, 1421 (9th Cir.1984). Here, the Tax Court apphed a four factor test to determine that the Zero Gee Trust lacked economic sub-stanee:(l) Lund’s relationship to the trust property (his computer consulting business) did not differ materially before and after he formed the trust and granted the business to the trust; (2) the trust did not have independent trustees; (3) no economic interest passed to the named beneficiaries of the trust; (4) Lund did not honor restrictions imposed by the trust or…