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whose names were on the various accounts did not earn the taxable
amounts attributed to those accounts.
A taxpayer cannot expect the Commissioner to recognize the
separate identity of an entity where the taxpayer himself so
blatantly ignores any separate existence. Nor should the courts
require the Commissioner to do so.
On the record presented to us, we find that IRA, Holding
Co., their subsidiaries, including Zeus, Zion, Carlco, TMT, and
BWK, Inc. did not carry on any business and were only the alter
egos of Kanter, Lisle, and Ballard. We find the various entities
to be pure tax avoidance vehicles. The corporations were nothing
more than a few incorporating papers of no significance except
when a tax return was due. Petitioners diverted millions of
dollars of income. The make-believe corporations were shams and
too transparent to accept for tax purposes.
2. Assignment of Income
Even if the corporations that received the payments from the
Five had been viable entities, that would not preclude
application of the assignment of income doctrine, as a taxpayer
could assign income to a corporation that conducts real and
substantial business in an attempt to avoid tax. See Haag v.
Commissioner, 88 T.C. 604, 611 (1987), affd. without published
opinion 855 F.2d 855 (8th Cir. 1988).
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