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(reversing and remanding because it was “unclear from the record
whether * * * [the taxpayer] in fact relied on any specific
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 a few months 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. At trial, Stark
testified as a witness but presented no evidence that he was
aware of Tex. Carbonate Co. v. Phinney, supra, or that anyone had
ever discussed the case with him.
Petitioner proposed to call Grey, the accountant who advised
petitioner and prepared petitioner’s tax returns. Grey was not
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