- 30 -
by relying upon mere legal formality. Mississippi Valley
Portland Cement Co. v. United States, 408 F.2d 827, 833 (5th Cir.
1969); Major v. Commissioner, 76 T.C. 239, 246 (1981).
Petitioner claims nontaxable intermediary status, noting
that it had no part in determining the amount of cash vendors
distributed at the food shows. We disagree. Petitioner arranged
the food shows and compiled the food show book. The food-show
book set forth the product price promotions available at the
show. Vendors submitted their proposed product price promotions
to petitioner, and petitioner determined whether the product
would be included in the show. There was an incentive to make
the promotions attractive, because the promotions were either
accepted or declined by petitioner; there was no negotiating
after the proposal was submitted. The control petitioner
maintained over which products would be available at the show,
combined with the vendors' need to sell at the food show, ensured
that the product price promotion would be economically
attractive. Thus, petitioner played a significant role in
determining the promotional allowances provided at the food
shows.
With respect to the check transactions, petitioner claims it
merely provided a check-cashing service, receiving vendors'
checks, cashing the checks, and returning the checks to the
vendors. We disagree. Vendors made the checks payable to
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