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findings of fact that we have culled from the record in an effort
to fully illuminate the transactions in dispute, we reject as
manifestly unreasonable the STJ report’s acceptance of Kanter’s
and Ballard’s testimony, and Lisle’s statement to IRS agents,
that they were not participants in a kickback scheme. There is
abundant and overwhelming objective evidence of record that the
payments from The Five constituted income earned by Kanter,
Ballard, and Lisle (and in some instances by Kanter alone) and
that income was delivered to Kanter, Ballard, and Lisle by way of
a circuitous and well-concealed route through various Kanter-
related entities. The objective evidence regarding Kanter’s,
Ballard’s, and Lisle’s general conduct and the flow of funds in
these cases wholly discredits petitioners’ testimony that they
were not involved in a kickback scheme. Consequently, we reject
petitioners’ testimony as inherently improbable and conclude,
contrary to the STJ report, that Kanter, Ballard, and Lisle
earned income in the form of payments from The Five during the
years at issue and failed to report that income on their tax
returns.
Kanter arranged to conceal Ballard’s and Lisle’s roles in
the scheme by funneling the payments from The Five to sham
entities including IRA, THC, Carlco, TMT, BWK, and FPC Subventure
Partnership. Those entities served no legitimate business
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