- 94 -
to the ultimate consumers. Those sunglass assembly operations
were not minor, nominal, or insignificant. They required trained
and experienced personnel who could quickly and efficiently
assemble sunglasses that met B&L's quality standards. In addi-
tion to the actual assembly of sunglasses, those operations also
required trained inspection personnel to detect quality problems
in both the purchased parts and the finished sunglasses and a
management staff to plan and oversee the production operation.
Although the assembly operations of B&L Ireland and B&L Hong Kong
also included labeling and packaging operations, those operations
were not limited to such "ministerial functions". See Dave
Fischbein Manufacturing Co. v. Commissioner, 59 T.C. at 360.
To support her position that the assembly operations con-
ducted by B&L Ireland and by B&L Hong Kong constituted minor
assembly, respondent relies on the testimony of Dr. Philpott. In
his opening report, Dr. Philpott opined that the assembly opera-
tions of each of those companies "would be considered by an
industrial or manufacturing engineer as minor assembly, labeling,
packaging, or repackaging." Dr. Philpott admitted, however, that
the phrase "minor assembly" is not a term commonly used by in-
dustrial or manufacturing engineers. Rather than giving an
opinion concerning an industry standard, it appears that Dr.
Philpott gave his opinion as to the meaning of the term "minor
assembly" for purposes of section 1.954-3(a)(4)(iii), Income Tax
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