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presumption that the evidence would be unfavorable if produced.
Wichita Terminal Elevator Co. v. Commissioner, 6 T.C. 1158, 1165
(1946), affd. 162 F.2d 513 (10th Cir. 1947).
2. Backdating and “Effective As of” Dating of
Documents
Petitioners have admitted that one of the critical documents
in the record was backdated. Although petitioners explain the
backdating as a matter of convenience, the fact that any
backdating occurred suggests a willingness to manipulate the
relevant chronology in a way that does not enhance the
credibility of petitioners’ evidence.
At least one document was revised after the effective date,
but the fact of the revision is not disclosed on the face of the
document. It also appears that several key documents were not
prepared and dated contemporaneously. For example, the
promissory notes dated as of October 27, 2000, that purported to
formalize the loans the Melniks obtained from Clend were probably
not executed on the dates indicated and conflict with records
maintained by Bermuda Trust. Many of the critical documents
reflect “effective as of” dating and do not reveal when they were
executed.
The “effective as of” dating and backdating of relevant
documents impede our review of the substance of the transactions
involving the foreign trusts and Clend and lead us to conclude
that the chronology reflected by those documents is not credible.
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