- 360 -
tax purposes. See Furman v. Commissioner, 45 T.C. 360, 364
(1966). Trusts lacking in economic substance created to avoid
taxes have been disregarded by the Court. See Zmuda v.
Commissioner, 79 T.C. 714 (1982); Markosian v. Commissioner, 73
T.C. 1235 (1980); Furman v. Commissioner, supra at 366; Sandvall
v. Commissioner, T.C. Memo. 1989-189.
In considering and weighing the facts with respect to this
issue, we note that the principle of substance over form is
peculiarly applicable to trusts because they are easily
manipulated so as to create illusion. See Lazarus v.
Commissioner, 58 T.C. 854, 864 (1972), affd. 513 F.2d 824 (9th
Cir. 1975), where we stated (citing Helvering v. Clifford, 309
U.S. 331, 334 (1940)): "Technical considerations, niceties of
the law of trusts or conveyances, or the legal paraphernalia
which inventive genius may construct must not frustrate an
examination of the facts in the light of the economic realities."
While the named grantor of BRT was Kanter's mother, the
evidence shows that Kanter funded all or substantially all of BRT
by assigning his earned income or assets earned by his personal
services to BRT. In this manner, Kanter attempted to circumvent
the progressive rate structure of the Federal income tax system
and eliminate or substantially reduce his income tax by diverting
his income to 25 trusts (eventually 85) for the benefit of his
family. At the same time he attempted to transfer his personal
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