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industry practice in reaching its decision to treat its * * *
[workers] as non-employee tenants, let alone whether such
reliance was reasonable”); Select Rehab, Inc. v. United States,
205 F. Supp. 2d 376, 380 (M.D. Pa. 2002) (“The taxpayer must show
that it relied upon those grounds [alleged as a reasonable
basis], and that the reliance was reasonable.”); W. Va. Pers.
Servs., Inc. v. United States, 78 AFTR 2d 96-6600, at 96-6608,
96-2 USTC par. 50,554, at 85,919 (S.D. W. Va. 1996) (“The plain
meaning of section 530(a)(2) is that only evidence known to and
relied upon by the taxpayer is relevant. Facts that are learned
after the incorrect treatment of the employees * * * are not
facts that a taxpayer relied upon in making its original decision
regarding how to treat its employees.”).
Until shortly before trial, petitioner did not purport to
rely on Section 530 or the bases described therein and expressly
disclaimed any dependence on the statute. Petitioner’s present
claim of reliance is not credible. The following colloquy
transpired at trial between Graham and counsel for respondent:
Q [Counsel for respondent] It’s my understanding
that Petitioner is contending that it relied on Texas
Carbonate versus Phinney as the basis for treating you
as other than an employee. Is that correct?
A [Graham] I don’t know nothing about this. I
don’t know.
Q You’re not familiar with the case Texas Carbonate
versus Phinney?
A No.
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