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the foregoing, we conclude that all of the activities in which
the list manager engages are royalty-related activities.
CMS
The activities of CMS include: (1) Reviewing the data
cards, advertisements, and promotional materials used by the list
manager; (2) reviewing the proposed mailing pursuant to
guidelines that petitioner provides; (3) occasionally forwarding
the list order to petitioner for final approval; and (4)
remitting payment to petitioner.
As we discussed above, the data cards are the means by which
the list manager promotes and advertises petitioner's rental
list. Review of promotional and advertising material by the
owner of an intangible is not inconsistent with royalty
treatment. See Wm. J. Lemp Brewing Co. v. Commissioner, supra;
Mississippi State Univ. Alumni, Inc. v. Commissioner, supra.
Similarly, as we discussed above, review of all list rental
transactions is part of the protection of the list. Finally, as
discussed above, the list owner is entitled to be paid.
Accordingly, CMS' activities in remitting payment to petitioner
are royalty-related activities. Consequently, we conclude that
all of the activities in which CMS engages are royalty-related
activities.
Petitioner
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