- 26 -
the surrounding facts and circumstances of each case. See id.
(citing Connecticut Mut. Life Ins. Co. v. Spratley, 172 U.S. 602,
617 (1899)). "An essential characteristic of an agency
relationship is that the agent acts subject to the principal's
direction and control." In re Shulman Trans. Enters., Inc., 744
F.2d 293, 295 (2d Cir. 1984). "[A]n independent contractor can
be an agent if, and to the extent that, the contractor acts for
the benefit of another and under its control in a particular
transaction." State Police Association v. Commissioner, 125 F.3d
1, 7 (1st Cir. 1997), affg. T.C. Memo. 1996-407; see also
National Collegiate Athletic Association v. Commissioner, 92 T.C.
456, 467 (1989), revd. on other grounds 914 F.2d 1417 (10th Cir.
1990).
As we stated above, the list brokers act solely on behalf of
the mailers. The same list broker does not participate in every
transaction. Rather, each mailer chooses its own list broker to
act on its behalf. Additionally, petitioner does not exercise
any control over the list brokers or over the list manager when
it acts in its capacity as list broker. Petitioner directs all
rental inquiries to the list manager.10 Consequently, even if a
mailer or a broker contacts petitioner directly, petitioner has
10 Petitioner only deals directly with inquiries from its
affiliates.
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