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Petitioners have presented copies of the five Universal
Notes in question, as well as a copy of the Credit Agreement with
the Herkeios Group. However, these allegedly objective economic
indicia of debt are little more than additional declarations of
intent without any accompanying objective economic indicia of
debt. Alterman Foods, Inc. v. United States, 505 F.2d 873, 879
(5th Cir. 1974); Dixie Dairies Corp. v. Commissioner, 74 T.C.
476, 495 (1980).
Petitioners contend that they have since repaid the alleged
loans, but they have failed to offer any documentary evidence of
repayment. R. Richard Evans, the current trustee of the Herkeios
Group, testified at trial that he had become aware that the
advances were repaid. However, Mr. Evans was not the trustee
when the advances were made in 1991, and he did not provide any
loan repayment documents to substantiate that the funds were, in
fact, repaid.
In addition, Mr. Maranto's own testimony regarding both the
Herkeios Group and the purported loans was unpersuasive. For
instance, in response to respondent's question as to whether he
was the grantor or settlor of the Herkeios Group trust, Mr.
Maranto testified: "I can't say with certainty, but I don't
believe so. What I'm certain of is that it [the Herkeios Group]
doesn't belong to me. I could be fired at any time." When asked
by respondent whether the Herkeios Group had existed before the
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