- 44 - 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 thePage: Previous 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 Next
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