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the 3-year period.17 While it is true that petitioners continued
to use the trade or business of Alcon P.R. to manufacture Avitene
after June 30, 1990, while MedChem U.S.A. established an Avitene
manufacturing facility in Woburn, the use of Alcon P.R.’s
business was not MedChem P.R.’s trade or business. In fact,
petitioners have consistently reported in all but one instance
that Alcon P.R. was Avitene’s manufacturer. That one instance is
here where, solely for the purpose of Federal income tax,
petitioners invite the Court to hold that MedChem P.R. was in
fact Avitene’s manufacturer. We decline that invitation.
Petitioners argue that MedChem P.R. had employees who
performed Avitene-related services in Puerto Rico during the 3-
year period. Petitioners assert that MedChem P.R. paid for the
Avitene-related services of these individuals and that the
individuals represented the interests of MedChem P.R. while
working on Avitene matters. Petitioners assert that MedChem P.R.
directed and controlled the Avitene-related work of these
individuals and that no non-MedChem P.R. employee or entity had
the ability to direct or control that work. Petitioners
generally identify these individuals as the MedChem P.R. officers
17 Contrary to petitioners’ request, we do not find that
MedChem P.R. employees purchased those raw materials or monitored
the production of Avitene or any of the inventory. As discussed
herein, employees of either Alcon P.R. or MedChem U.S.A.
generally performed all of the services connected to Avitene
during the 3-year period.
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