Leon L. Zachman and Estate of Ione Zachman - Page 14

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         opinion sub nom. Anderson v. Commissioner, 106 F.3d 406 (9th Cir.            
         1997), and cases cited therein.                                              
              Petitioners also concede that Strohmeier served no                      
         meaningful function as “manager” of Hillside Farm.  Similarly,               
         there is no evidence that Strohmeier’s successor, Ellering,                  
         served any meaningful function as manager of Hillside Farm.9  In             
         fact, there is no evidence that Hillside Farm ever conducted any             
         business at all.10                                                           
              Upon the alleged creation of Hillside Farm, no economic                 
         interest passed to any beneficiary other than petitioners.  Nor              
         does the record establish that the subsequent purported transfer             

               9 Petitioner testified that Ellering made “some” decisions             
          about farm activities, but he was unable to offer specific                  
          examples, stating that “we just talked about the weather, and see           
          what would be the best thing to do.”  He testified that his sons,           
          rather than Ellering, made all decisions about when to plant                
          crops, cut hay, and such.  Dale Zachman testified that there had            
          been instances when the purchase of new farm machinery had been             
          “delayed” for Ellering’s approval, but when questioned he could             
          not recall a specific instance.                                             
               10 On brief, petitioners seek to attribute to Parnell and              
          Armageddon the activities of the Noskes, arguing that Parnell and           
          Armageddon controlled Hillside Farm’s “checkbook” through the               
          agency of the Noskes. Petitioners have not established, however,            
          that the Noskes were in fact the agents of Parnell or Armageddon.           
          There is no mention of the Noskes in the Declaration of Trust.              
          There is no evidence that the Noskes were authorized to or                  
          actually did assume the fiduciary duties allegedly imposed on the           
          corporate trustees under the purported trust documents.  Rather,            
          the totality of the evidence strongly suggests that the Noskes              
          provided petitioners with bookkeeping services, for which they              
          were compensated, and bad advice as part of a conspiracy to                 
          defraud the United States, for which they were imprisoned.                  


Last modified: May 25, 2011