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specifications. Also, we found that the taxpayer was maintaining
inventories in the form of materials and work in process, and not
in the form of real estate to which it held title or in the form
of improvements to its own real estate. On that basis, we
distinguished Miller Dev. Co. v. Commissioner, 81 T.C. 619 (1983)
(real estate and improvements to real estate are not normally
considered “merchandise” for purposes of determining whether the
use of inventories is permitted to the taxpayer).
Shasta Indus., Inc. v. Commissioner, supra, is a Memorandum
Opinion. Therefore, we applied settled law to the facts before
us. Those facts and the facts before us today are quite similar,
yet, today, we reach a different result. I assume, therefore,
that settled law has changed.
C. The Integral-to-Service Test
The majority finds that petitioner’s business is inherently
a service business. See majority op. pp. 19, 23. As stated, the
majority does not identify the essential constituent that marks
the inherent nature of a service business. In Osteopathic Med.
Oncology & Hematology, P.C. v. Commissioner, supra, we found the
chemotherapy drugs in question were unavailable to the ultimate
consumers, the patients, without the intervention of a physician,
and they had to be injected into the patient by a physician or
nurse. The analogy to the case at hand is weak. Here, the
materials could be purchased by anyone, and the only
distinguishing characteristics of petitioner were its license and
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