Investment Research Associates - Page 203




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         primarily through the efforts of petitioners via their contacts               
         with Prudential, Travelers, and the Pritzker family.                          
              In Rubin v. Commissioner, supra, we found that the income                
         was properly taxable to the individual who performed the services             
         for which payment was made where the individual was not                       
         contractually bound to (and in fact did not) render services                  
         exclusively to a personal service corporation.  In these cases,               
         petitioners were not contractually bound to, nor did they render              
         services for, the corporations.                                               
              Ballard, Lisle, and Kanter were not employees of any of the              
         corporations or entities involved in the transactions at issue.               
         Ballard and Lisle were full-time employees of Prudential,                     
         Travelers, or Goldman-Sachs.  Kanter was a self-employed                      
         attorney.                                                                     
              Kanter was not an agent of the corporations.  In fact, there             
         is evidence that Kanter in some instances held himself out to                 
         members of the Five (in particular Schaffel) as Ballard's and                 
         Lisle's agent, referring to them as his "associates". Ballard                 
         and Lisle did not claim that they were agents of IRA or any other             
         entity (except to justify the payment Ballard received as a                   
         director's fee from IRA while denying he was ever a director).                
              We have previously discussed the failure of petitioners and              
         other parties to the transactions to recognize the separate                   
         existence of the corporations.  None of the Five recognized any               






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