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In addition, respondent’s litigating position in his answer
generally denies petitioner’s allegations. Because the answer
does not contain any significant analysis, we rely upon the facts
as developed by the examining agent as the reasoning behind
respondent’s contentions.
b. Was Respondent’s Litigating Position
Reasonable?
Whether petitioner properly classified its instructors as
employees is a question of fact. See Weber v. Commissioner, 103
T.C. at 386; Packard v. Commissioner, 63 T.C. 621, 629 (1975).
We generally accord significant weight to the amount of control a
taxpayer exercises over its instructors since control is the
“crucial test” in determining the nature of a working
relationship. Gen. Inv. Corp. v. United States, 823 F.2d 337,
341 (9th Cir. 1987). In determining the nature of a working
relationship, the threshold level of control for the creation of
an employer-employee relationship varies depending on the nature
of the services the worker provided. Weber v. Commissioner,
supra at 387-388.
Respondent conceded the ultimate issue: whether petitioner
properly classified its instructors as independent contractors.
This concession is not necessarily determinative that
respondent’s prior position on that issue was unreasonable.
Portillo v. Commissioner, 988 F.2d 27, 28 (5th Cir. 1993), revg.
T.C. Memo. 1992-99. However, it is a factor that we may
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