B & D Foundations, Inc. - Page 20




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               In their post-trial briefs, the parties have addressed in              
          cursory fashion the independent investor test used by the Courts            
          of Appeals for the Second,10 Seventh,11 and Ninth Circuits.12               
               In Eberl’s Claim Serv., Inc. v. Commissioner, 249 F.3d 994,            
          1003-1004 (10th Cir. 2001), affg. T.C. Memo. 1999-211, the Court            
          of Appeals for the Tenth Circuit recently confirmed that it                 
          continues to use the multifactor approach of Pepsi-Cola Bottling            
          Co. of Salina, Inc. v. Commissioner, supra.  In Eberl’s Claim               
          Serv., Inc., the panel rejected the taxpayer’s argument for                 
          adoption of some form of the independent investor test (more                
          fully discussed infra pp. 47-57), stating that it was bound to              
          continue using the multifactor approach of Pepsi-Cola Bottling              
          Co. of Salina, Inc., absent reconsideration and adoption in an en           
          banc rehearing.  Id.                                                        
               In all likelihood, any appeal from our decision in the case            
          at hand would be to the Court of Appeals for the Tenth Circuit.             
          Sec. 7482(b)(1)(B).  As a result, in deciding this case, we                 
          follow its decisions in Eberl’s Claim Serv., Inc., supra, and               


               10E.g., Dexsil Corp. v. Commissioner, 147 F.3d 96 (2d Cir.             
          1998), vacating and remanding T.C. Memo. 1995-135; Rapco, Inc. v.           
          Commissioner, 85 F.3d 950 (2d Cir. 1996), affg. T.C. Memo. 1995-            
          128.                                                                        
               11E.g., Exacto Spring Corp. v. Commissioner, 196 F.3d 833              
          (7th Cir. 1999), revg. T.C. Memo. 1998-220.                                 
               12E.g., Labelgraphics, Inc. v. Commissioner, 221 F.3d 1091             
          (9th Cir. 2000), affg. T.C. Memo. 1998-343; Elliotts, Inc. v.               
          Commissioner, 716 F.2d 1241 (9th Cir. 1983), revg. and remanding            
          T.C. Memo. 1980-282.                                                        




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