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Commissioner determined that the taxpayer had unreported income
without substantive evidence linking the taxpayer to the income.
See United States v. Janis, supra at 437, 441; Portillo v.
Commissioner, supra at 1133-1134; Weimerskirch v. Commissioner,
supra at 361-362. Here, there is evidence clearly linking
petitioner to the income he diverted to Arivada. Thus, the
notice of deficiency is presumed to be correct, and the burden is
on petitioner to rebut this presumption. See Rule 142(a); Welch
v. Helvering, 290 U.S. 111 (1933).
2. Whether Arivada Was a Sham and Lacked Economic
Substance
Respondent contends that Arivada should not be recognized
for Federal income tax purposes because it is a sham and lacked
economic substance. Petitioner contends that Arivada is not a
sham.
A trust which lacks economic substance and has no purpose
other than tax avoidance is not recognized for Federal tax
purposes. See Neely v. United States, 775 F.2d 1092, 1094 (9th
Cir. 1985); Zmuda v. Commissioner, 731 F.2d 1417, 1421 (9th Cir.
1984), affg. 79 T.C. 714 (1982); Markosian v. Commissioner, 73
T.C. 1235, 1245 (1980); Furman v. Commissioner, 45 T.C. 360, 364
(1966), affd. per curiam 381 F.2d 22 (5th Cir. 1967). Petitioner
presented no credible evidence that Arivada had economic
substance or was formed for any reason other than tax avoidance.
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