Transport Labor Contract/Leasing, Inc. & Subsidiaries - Page 4

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               TLC, which was incorporated in Indiana in 1986, was a wholly           
          owned subsidiary of petitioner and a member of petitioner’s                 
          affiliated group.  TLC’s corporate headquarters were in Arden               
          Hills, Minnesota, its payroll services operations were in                   
          Audubon, Minnesota, and its human resources operations were in              
          Porter, Indiana.                                                            
               TLC was a driver-leasing company that leased one or more               
          truck drivers to small and mid-sized independent trucking compa-            
          nies which used such truck drivers to transport goods and mer-              
          chandise.6  Prior to the times such trucking companies entered              
          into driver-leasing arrangements with TLC (described below), they           
          had (1) made payments to all of their respective truck drivers              
          who worked for them that were intended to compensate such drivers           
          for their work and (2) generally made payments (per diem pay-               
          ments) only to their respective over-the-road7 truck drivers who            
          worked for them that were intended to cover the amounts that such           
          truck drivers spent for food and beverages while traveling away             
          from home.                                                                  
               As of the beginning of taxable year 1993, TLC was leasing              



               6We shall refer to each trucking company that leased one or            
          more truck drivers from TLC as a trucking company client and to             
          each truck driver whom TLC leased to a trucking company client as           
          a driver-employee.                                                          
               7The term over-the-road means that the length of travel                
          required a truck driver to stay away from home overnight.                   





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