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petitioners dealt freely with trust funds and property, and they
manipulated funds between the trusts in a circular and
nonsensical manner. This factor weighs against petitioners.
In addition to our analysis of the Markosian factors, all of
which favor respondent, other facts herein make clear that the
tangled web woven by petitioners did little more than conceal the
ownership of assets and disguise the true earner of income for
the purpose of avoiding taxes. First, petitioners created an
elaborate scheme of documents and paperwork with an eye towards
creating an aura of legitimacy for the trusts. These canned
documents were part of the mass-produced trust package marketed
by Heritage and paid for with the $12,000 fee. Notwithstanding
the Muhichs spent time filling in the blanks, these documents do
not lend economic reality to the transactions they purport to
memorialize, and we place no weight on them.
Second, petitioner lacked a basic understanding of the
scheme's operation. He was generally unfamiliar with the
intricacies and interworkings of the trust scheme, and he was
unfamiliar with basic terms such as "grantor", "beneficiary", and
"trust declarations". Instead of directly responding to
questions asked at trial, petitioner often referred the Court to
the reams of paperwork submitted into the record with the
suggestion that the answers could be found somewhere in those
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