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transactions among petitioner, ATC, and Alpha Telcom, we reject
petitioner’s contention for the reasons discussed below.
First, petitioner had no control over the pay phones, never
had possession of the pay phones, and does not know what the pay
phones look like or where they are located. Petitioner signed an
agreement containing blank spaces where the pay phones were to be
identified.
Second, petitioner never had the power to select the
location of the pay phones or enter into site agreements with the
owners or leaseholders of the premises where the pay phones were
to be located; that power was held by Alpha Telcom through the
Alpha Telcom service agreement.
Third, no evidence indicates that petitioner paid any
property taxes, insurance premiums, or license fees with respect
to the pay phones.
Fourth, there was minimal risk of loss for petitioner
because the ATC pay phone agreement, in combination with the
Alpha Telcom service agreement, allowed petitioner to sell legal
title to the pay phones back to ATC for 10 percent less than the
amount that he invested in them in the first 36 months and for
the full amount that he invested in them after 36 months.
Fifth, under the terms of the Alpha Telcom service
agreement, Alpha Telcom was entitled to receive most of the
profits from the pay phones.
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