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See Higgins v. Smith, 308 U.S. 473, 477 (1940); Uri v.
Commissioner, 949 F.2d 371, 374 (10th Cir. 1991), affg. T.C.
Memo. 1989-58. Where establishment of trusts has no real
economic effect, the substance of the transactions involving the
trusts will control over the form. See Zmuda v. Commissioner,
731 F.2d 1417, 1420-1421 (9th Cir. 1984), affg. 79 T.C. 714, 719
(1982); Markosian v. Commissioner, 73 T.C. 1235, 1241 (1980);
Christal v. Commissioner, T.C. Memo. 1998-255. Sham trusts are
treated as lacking in economic substance and as constituting a
nullity for Federal income tax purposes. See Hanson v.
Commissioner, 696 F.2d 1232, 1234 (9th Cir. 1983), affg. per
curiam T.C. Memo. 1981-675; Markosian v. Commissioner, supra;
Wenz v. Commissioner, T.C. Memo. 1995-277.
In general, respondent's determinations in notices of
deficiency are presumed correct, and taxpayers bear the burden of
proof. See Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115
(1933); Schelble v. Commissioner, 130 F.3d 1388, 1391 (10th Cir.
1997), affg. T.C. Memo. 1996-269.
The failure of a party to introduce at trial evidence that
is within the party's control gives rise to a presumption that
the evidence, if provided, would be unfavorable to the party who
has control over the evidence. See O'Dwyer v. Commissioner, 266
F.2d 575, 584 (4th Cir. 1959), affg. 28 T.C. 698 (1957); Stoumen
v. Commissioner, 208 F.2d 903, 907 (3d Cir. 1953), affg. a
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