Nichols
Nichols v. Commissioner
Opinion
Lead Opinion
MEMORANDUM **
Paul F. and Eleanore M. Nichols appeal pro se from a decision of the United States Tax Court upholding the Commissioner of Internal Revenue’s (“Commissioner”) determination of income tax deficiencies for *283 the tax years 1997 and 1998, and an accuracy-related penalty under 26 U.S.C. § 6662 . We have jurisdiction under 26 U.S.C. § 7482 . We review for clear error the Tax Court’s determination that a transaction lacked economic substance, Keane v. Commissioner, 865 F.2d 1088, 1090 (9th Cir.1989), and its finding that a taxpayer is hable for accuracy-related penalties, Custom Chrome, Inc. v. Commissioner, 217 F.3d 1117, 1121 (9th Cir.2000). We affirm.
The Tax Court did not err in determining that the trusts the Nichols created were shams, because the record shows that they lacked economic substance. See Zmuda v. Commissioner, 731 F.2d 1417, 1421 (9th Cir.1984). In making this determination, the Tax Court properly placed the burden of proving the deficiencies incorrect on the Nichols, because the record shows they did not cooperate with the Commissioner’s reasonable requests for information and documents. See 26 U.S.C. § 7491 (a)(2)(B).