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substantial financial investment in the studio. However, each
instructor has a large financial stake in her dance abilities,
and the instructors were required to purchase their own music and
costumes. In this context, the concept of financial control is
not helpful to resolve the worker classification issue because
the examining agent did not rely on specific facts consistent
with the 20 common law factors or the 7 factors this Court
generally applies. See Profl. & Executive Leasing, Inc. v.
Commissioner, 89 T.C. 225, 233 (1987), affd. 862 F.2d 751 (9th
Cir. 1988); Rev. Rul. 87-41, 1987-1 C.B. 296 (listing the common
law factors that apply to the worker classification issue); cf.
Vendor Surveillance Corp. v. United States, 116 F.3d 488 (9th
Cir. 1997).
We also find it was unreasonable for the examining agent to
conclude that petitioner did not qualify for section 530 relief.
Petitioner and the instructors believed their relationship was
that of principal-independent-contractor. This was orally agreed
between the instructors and petitioner or between the instructors
and the business’s previous owner. In addition, the previous
owner of the business had always treated the instructors as
independent contractors, the relationships created by petitioner
and its instructors were not permanent, and the instructors
selected the classes they were going to teach each session. If
an instructor did not sign up to teach in a subsequent session,
the working relationship between that instructor and petitioner
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