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a corporation that petitioner had organized several years
earlier. The working relationship between petitioner, through
G&A, and PSI is not entirely clear from the record, but both were
involved in the following income-producing business activities
during the years in issue.
Petitioner, doing business as G&A, purchased surplus
property or scrap items from government auctions with the
intention to: (1) Resell the items intact at a profit; or
(2) dismantle the items so that precious or nonprecious metals
could be recovered and sold. In addition, petitioner, through
G&A, also collected obsolete telecommunications equipment from
private companies. This equipment was either resold for salvage
or scrap, or disposed of in an environmentally sound manner.
The services offered by petitioner, through G&A, were labor
intensive. For example, property purchased for resale or
dismantling had to be transported, typically in rented vehicles,
from one location to another, as did items collected for
disposition. Those items that required dismantling to recover
precious and nonprecious metals were dismantled by hand.
Petitioner, through G&A, had no employees during the years
in issue; PSI, however, did. Accordingly, PSI provided to G&A
what might be loosely referred to as contract labor services,
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Last modified: May 25, 2011