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of the trust. The trusts were created to operate a
brand-new business. This new business of selling and
servicing Aegis Trusts is the primary property of the
trusts. Additionally, the creation and use of a
business management trust for such a purpose is a
codified creation of the law of the State of Ohio.
At the outset, we stress again that the legitimacy of an
entity under State law as a business trust or any other
recognized form has no bearing on an economic substance analysis
and will not be discussed further. See Zmuda v. Commissioner, 79
T.C. at 720, and cases following. More importantly, petitioners’
remonstrance concerning a new business is on these facts a
distinction without a difference, not to mention factually
suspect.
The HGAMC trust instrument and the annual contracts between
HGAMC and Asset Protection Services reflect an arrangement where
the sole proprietorship, not HGAMC, conducted the underlying
business of selling Aegis trusts. HGAMC in turn was purportedly
engaged to manage Asset Protection Services through the provision
of Mr. Richardson’s services to his own sole proprietorship.
This structure is corroborated by the descriptions identifying
the nature of HGAMC’s business on certain of its Forms 1041 as
“MANAGEMENT SERVICES”.
Mr. Richardson earned his livelihood as a self-employed
salesman of insurance policies from 1993 through 1996. Thus, at
the time the instruments establishing HGAMC were executed,
Mr. Richardson had been employed for several years in selling
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