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independent transactions with or between unrelated parties under
similar circumstances considering all relevant facts."
As to INC's services in establishing and maintaining the
offshore corporations and trusts, petitioners did not establish
an arm's-length charge for such services. Petitioners also did
not offer any evidence establishing the amounts received and paid
by LTD for services performed by third party lawyers and
fiduciaries. Moreover, petitioners did not offer a methodology
for apportioning or attributing income between the services
performed by INC and the services performed by the third party
lawyers and fiduciaries. Furthermore, the record does not
provide sufficient information to establish on our own the amount
of income that should be apportioned to each source.9
Consequently, we do not reconsider our holding in our prior
opinion where we allocated income as to the client incorporation
and trust creation fees from LTD to INC.
Finally, we reject petitioners' contention that the client
incorporation fees should be apportioned so that INC receives no
more than a flat, nominal fee for each incorporation. The record
9 As to client incorporations, the record contains LTD's
charges for opening expenses and annual expenses. The record,
however, does not contain LTD's charges for third party lawyers
and fiduciaries or the number of incorporations that LTD
performed for its clients during each taxable year. The record
does contain LTD's charges for opening costs, annual costs, and
lawyers' costs for the creation of client trusts; however, it
does not contain the number of trusts that LTD created for its
clients during each taxable year.
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