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function, and that it had little exposure to losses associated
with the Beech Trucking drivers’ work activities. By contrast,
it appears that Beech Trucking bore the risks associated with
operating the trucking business on which it relied to generate
revenues with which to make weekly payroll reimbursements to ATS.
Beech Trucking had an investment in work facilities: it
operated two terminals and owned all the trucks that the drivers
operated. Clearly, the drivers’ work was part of the regular
business of Beech Trucking. The record is silent as to whether
ATS had any separate work facilities and is unclear as to the
extent of any business ATS might have had apart from the services
it provided Beech Trucking.
In sum, on the basis of all the evidence in the record, we
conclude that Beech Trucking was the drivers’ common law
employer, with respect to which ATS performed principally a
driver procurement and payroll service. Cf. Profl. & Exec.
Leasing, Inc. v. Commissioner, 89 T.C. at 234.
Accordingly, we conclude that the section 274(n) limitation
applies to Beech Trucking as the common law employer of its
drivers and as the party that (as petitioner states on brief)
actually bore the expense of the expenditures for which the per
diem payments were made. See sec. 1.274-2(f)(2)(iv), Income Tax
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