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evidence, however, of the amount of the debts that existed, what
the debts entailed, or how these debts were paid. Furthermore,
petitioners have not produced any documentation or records of how
the assets of United Sovereigns, Inc., were divided among its
shareholders. We again infer that Mr. Phelps' testimony
regarding these facts would not have been favorable to
petitioners. Id.
United Sovereigns' business was the same as that of United
Sovereigns, Inc. Mr. Christal made all important business
decisions with little or no input from anyone else, he controlled
United Sovereigns' earning of income, and he dealt with that
income as his own. This factor points to a sham.
We find likewise with respect to the second factor; i.e.,
United Sovereigns lacked a bona fide independent trustee. The
failure of a nominal trustee to have any meaningful role in the
operation of the trust has been repeatedly cited by this Court as
evidence that the entity lacks economic substance. See, e.g.,
Zmuda v. Commissioner, 79 T.C. at 720-721; Para Techs. Trust v.
Commissioner, T.C. Memo. 1994-366, affd. without published
opinion sub nom. Anderson v. Commissioner, 106 F.3d 406 (9th Cir.
1997). Additionally, Mr. Christal had signature authority over
United Sovereigns' bank account, which meant that he had access
to the funds contained therein. Contrary to the assertions of
Mr. Christal and Ms. Menon, Ms. Menon could not and did not
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