Stephen P. and Jutta A. Maranto - Page 9

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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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