- 23 -
application of the assignment of income doctrine to tax to
petitioners at least the trust’s income derived from their
personal services and (2) his disregard of the trust as a sham,
which would tax all of the trust’s income to petitioners.
Petitioners have failed to introduce into evidence any indenture
or other document establishing the terms of Complete Connections
Trust, nor have they obtained the testimony of Kevin Richards,
who is described on two of the Complete Connections Trust returns
as either fiduciary or trustee. Petitioners were made aware of
the need for the trust documents during the examination of their
returns for the years in issue, and such documents were requested
during discovery. They have not demonstrated (nor would we
easily believe) that they lacked access to such documents, nor
have they shown that Mr. Richards is unavailable to testify. We
infer from petitioners’ failure to produce such evidence that
either it does not exist or, if it does exist, it would be
negative to petitioners. McKay v. Commissioner, 886 F.2d 1237,
1238 (9th Cir. 1989), affg. 89 T.C. 1063 (1987); Wichita Terminal
Elevator Co. v. Commissioner, 6 T.C. 1158, 1165 (1946), affd. 162
F.2d 513 (10th Cir. 1947). If petitioners retained sufficient
power and control over Complete Connections’ receipt of income,
then such income would be taxable to them. See Barmes v.
Commissioner, supra. Petitioners have failed to prove that they
retained any less power and control over Complete Connections’
Page: Previous 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 NextLast modified: May 25, 2011