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In a somewhat similar vein, petitioner argues that it merely
was a conduit for payment from customers to Dr. Katz, and,
therefore, was not required to submit Forms 1099. See Marlar,
Inc. v. United States, 151 F.3d 962 (9th Cir. 1998); Deja Vu
Entertainment Enterprises of Minnesota, Inc. v. United States, 1
F. Supp. 2d 964 (D. Minn. 1998). In those cases the
taxpayers/corporations were in the adult entertainment business
and provided stage rental for dancers. Essentially, the
customers paid the dancers, and the dancers then paid the stage
rental to the corporations. The corporations did not file Forms
1099. The Government argued that the corporations were required
to file Forms 1099 on payments made by the corporations, and,
therefore, section 530 relief was not available. The courts held
that there were no payments, within the meaning of section 6041
and the regulations thereunder, made by the corporations to the
dancers.
We would be turning a blind eye to the facts if we were to
say that there were no payments from petitioner to Dr. Katz.
Petitioner billed the patients, and the patients paid petitioner.
Petitioner then paid Dr. Katz and the other employees for the
services they rendered.
As far as this record is concerned, petitioner has been
recognized by Dr. Katz for almost 30 years presumably in part
because of perceived benefits of Dr. Katz being petitioner’s
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