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The Court therefore concludes that the income and allowable
expenses attributable to HGAMC and HGRCT are taxable to
petitioners.
Specifically, because HGAMC and HGRCT were shams,
petitioners are required to include in their income for 1996 and
1997 business gross income and interest income reported by HGAMC
and interest income reported by HGRCT. In this connection,
petitioners at certain junctures have contended that the amounts
of business income reported on the various returns germane to
this calculation were overstated on account in some instances of
double reporting and in other instances of reporting gross
receipts from the sales of Aegis trusts as opposed to merely the
proper commission income on those sales.
The record, however, contains no documentary evidence
whatsoever that would support or corroborate an alternative
computation. Furthermore, we observe that petitioners, and not
Aegis, had unfettered control and signatory authority over
relevant accounts into which the sales proceeds were deposited.
In these circumstances, we cannot relieve petitioners of the
implied concessions worked by their and their entities’ filed
returns. See Waring v. Commissioner, 412 F.2d 800, 801 (3d Cir.
1969), affg. T.C. Memo. 1968-126; Estate of Hall v. Commissioner,
92 T.C. 312, 337-338 (1989).
As regards expenses, respondent determined that petitioners
were entitled to deduct on their returns a portion of the
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