Dennis Katz, D.D.S., P.C. - Page 10

                                       - 10 -                                         
               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             
               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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