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gave rise to the commissions at issue, was signed by petitioner
on behalf of CTC and was in fact with CTC. The evidence shows
that Galion did business with CTC and dealt with Diesel Power as
CTC's Iranian affiliate. There is also evidence that Galion
employees believed that Diesel Power, CTC, and petitioner were
essentially the same. Petitioner and CTC employees controlled
the timing and payment of commissions from Galion by issuing
bills and directing payment. On a number of occasions there were
payments made directly to Diesel Power without such instructions
from CTC. Petitioner and CTC employees corrected this by
advising Galion of the correct procedures to be used, which
usually included direct payments to CTC. When other important
problems arose, such as a changeover of power in an Iranian
ministry, or the failure of Mr. Khalatbari to sign a contract in
1978, petitioner was expected to resolve them.
There is evidence that Diesel Power employees performed some
of the legwork required to earn the commissions by obtaining
price quotations and arranging for sales in Iran. However,
unlike work performed for other companies, it appears that all of
this work was performed at petitioner's direction and control,
and that Diesel Power was considered to be an Iranian branch of
CTC for Galion sales. Therefore, we conclude that petitioner
earned all of the Galion commissions that were paid or attributed
to Diesel Power and that petitioner should have reported them as
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