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On the record before us, we reject petitioner’s assertion.
Petitioner’s asserts that “At the time that TLC began
sending out the [per diem] letters there was no need to ‘bolster’
its return reporting position” with respect to the section
274(n)(1) limitation. We find that assertion to be disingenuous.
That the IRS may not have been examining petitioner’s
consolidated returns for the years at issue at the time TLC sent
out the per diem letters does not mean that petitioner and TLC
were unaware of the tax issues under section 274(n) that the IRS
might raise on audit of such returns. In this connection, in
Transport Labor I the Court found the per diem letters to be a
self-serving attempt to bolster petitioner’s position (viz., that
the section 274(n)(1) limitation did not apply to the per diem
amounts that TLC paid to its driver-employees) in the respective
consolidated Forms 1120 which petitioner filed for the taxable
years at issue. Id. at 198-199. Each per diem letter was a
self-serving declaration sent by TLC to each trucking company
client, which set forth TLC’s position that each trucking company
client was subject to the section 274(n) limitation with respect
to the per diem amounts that TLC paid to each driver-employee.
At least certain of TLC’s trucking company clients disagreed with
that self-serving position of TLC. Id. at 177.
Petitioner asserts that “It was TLC’s practice and intention
that the trucking companies would be responsible for the Section
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