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that the instructors were employees, or failed to give such facts
the appropriate amount of weight. First, with respect to
behavior control, three of the four instructors interviewed
stated they received a “manual” when they became instructors at
the studio. However, the instructor interviews do not support
the conclusion that the “manual” was mandatory. The interviewed
instructors neither recalled the dance class instructions in the
manual ever being enforced nor did they sign anything stating
they had received it. Having reviewed the portion of the manual
included in the record, we find it provided helpful tips for
instructors and information regarding emergency situations. We
find it was unreasonable for respondent to rely on the “manual”
as evidence of control given the instructors’ statements and the
overall factual record developed during the audit. As the
Appeals officer found, the “manual” was no more than a guideline.
Moreover, the instructors selected the classes they wanted to
teach, and these classes represented their individual talents and
experience. Petitioner never provided the instructors with any
training. The instructors brought their expertise to the
relationship with petitioner. The amalgamation of these findings
indicates that it was unreasonable for the examining agent to
conclude petitioner had a sufficient level of control over the
instructors to classify them as employees.
We also believe that respondent’s litigating position with
respect to financial control was unreasonable. Petitioner had a
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