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driver-employee. In contrast, each trucking company client could
have conducted its trucking business by procuring the services of
truck drivers to use in that business by hiring them directly
and/or by leasing them from a person engaged in the driver-
leasing business. Id.
Per Diem Letters
In Transport Labor I, the Court found that, for each of the
calendar years 1993, 1994, 1995, and 1996, TLC sent a per diem
letter to each trucking company client, which set forth the total
of all per diem amounts that TLC paid to the driver-employees
whom it leased to such trucking company client during the
preceding calendar year. Id. at 176. With respect to such per
diem letters, petitioner asserts:
The Court overlooked important evidence proving
that far from being “self serving” and an attempt to
bolster TLC’s return position, the letters were part of
the regular business practice of TLC long before the
Section 274(n) issue arose to insure that the trucking
companies that paid per diem were responsible for the
Section 274(n) limitation to trucking companies. TLC
began the business practice of sending the letters
following the close of the 1993 calendar tax year, over
10 years ago. At the time that TLC began sending out
the letters there was no need to “bolster” its return
reporting position. * * *
It was TLC’s practice and intention that the
trucking companies would be responsible for the Section
274(n) limitation on per diem, and it adopted
procedures to inform the trucking companies that they
were responsible for the deduction limitation at every
step in the relationship. Mr. DeBerg testified that
the trucking companies were informed during the sales
process that they would be subject to the per diem
deduction limitation. [Fn. ref. omitted.]
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