*504 WIENER, Circuit Judge. Petitioners-Appellants, Bruce and Sher-ilyn S. Gunkle, husband and wife (together, the Gunkles), appeal the judgment of the United States Tax Court (Tax Court) rendered pursuant to Section 7483 of the Internal Revenue Code (I.R.C.). They seek reversal of that judgment, which sustained the determination of Respondent-Appel-lee, the Commissioner of Internal Revenue (Commissioner), that the Gunkles had an income tax deficiency and an accuracy-related addition to tax for 2007 as the result of unreported income and disallowed deductions for charitable contributions. We affirm. I. FACTS AND PROCEEDINGS A. Facts Bruce is a graduate of the United States Naval Academy and holds a master’s degree in theology from Antioch University. After he retired from the military, he and Sherilyn settled in Texas. Bruce incorporated the City of Refuge Christian Fellowship, Inc. (City of Refuge, Inc.) in 1990 as a Texas non-profit corporation, exempt from federal taxes under I.R.C. § 501(c)(3) (501(c)(3)). The Gunkles’ income tax debacle began in 2002 when Bruce attended a church leadership conference and heard Elizabeth Gardner, wife of Frederick Ric Gardner (together, the Gardners) speak about a religion-related tax gimmick that they were marketing, at the core of which was a so-called corporation sole as an alternative to a customary non-profit entity exempt from taxes under 501(c)(3). 1 Central to the Gardners’ step-transaction tax scheme 2 was the proposition that persons like the Gunkles could assign their income to a corporation sole and deduct the amounts thus assigned as charitable donations without the need to qualify that entity under 501(c)(3), and would thereby transform taxable individual income into non-taxable income. The Gardners marketed their packaged how-to program to those attending the conference, and Bruce was among the purchasers. 3 *505 As the first step in implementing the Gardeners’ multi-step plan, Bruce dissolved his existing 501(c)(3) non-profit corporation, City of Refuge, Inc., through the Texas Secretary of State, thereby terminating its tax-exempt status in the process. As his next step, Bruce formed the Office Of Presiding Pastor, Bruce W. Gunkle, And His Successors, A Corporation Sole as a Nevada entity within the ecclesia of the City of Refuge (the corporation sole). As the tax court observed, Gunkle concluded that he did not wish to continue operating as a nonprofit corporation ... because of concern that such status might allow Governmental interference with the organization and that the ‘business model’ of a corporation allowed the directors a say in the operations. 4 The next step in the Gun-kles’ series was their signing of a vow of poverty, which they had the corporation sole accept and agree to provide all their needs as Apostles and as pastors of this church ministry. The check will be placed in the church pastoral account every two weeks according to all the needs of the pastors. As their last step down the Gard-ners’ primrose path, the Gunkles deeded their residence to Bruce’s corporation sole, all the while continuing to reside there. During 2007, the tax year at issue, the Gunkles performed …
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