On the record before us, we reject petitioner's assertion.

As the Court stated in Transport Labor I, the determination of whether an individual is an employer is a fact-intensive inquiry. 123 T.C. 154">Id. at 184. Application of the common-law employment factors may produce different results in different cases that may appear to be facially similar. For example, in Weber v. Commissioner, 60 F.3d 1104">60 F.3d 1104 (4th Cir. 1995), affg. 103 T.C. 378">103 T.C. 378 (1994), application of the common-law employment factors resulted in a finding that a Methodist minister was the employee of the United Methodist Church. In contrast, in Alford v. United States, 116 F.3d 334">116 F.3d 334 (8th Cir. 1997), and Shelley v. Commissioner, T.C. Memo. 1994-432, application of the common-law employment factors resulted in findings that an ordained minister holding credentials in the Assemblies of God Church and a minister of the International Pentecostal Holiness Church, respectively, were not employees2005 Tax Ct. Memo LEXIS 173">*203 of their respective religious organizations.

The facts of the instant case are materially distinguishable from the facts in 118 T.C. 428">Beech Trucking Co. The Court in Beech Trucking Co. v. Commissioner, 118 T.C. 428">118 T.C. 441, 442 n. 16, concluded:

   In the instant case, the evidentiary basis for analyzing the



   relevant common law factors is relatively sparse, owing largely



   to petitioner's [Arthur Beech, the tax matters person for Beech



   Trucking Company] failure to introduce in evidence or otherwise



   establish the precise terms of any lease agreement, employment

   agreement, or contract between Beech Trucking and ATS [driver-

   leasing company]. Nor does the record contain the drivers'



   employment contracts. Moreover, the record does not always

   clearly distinguish the roles of Beech Trucking and ATS with

   respect to the drivers' activities. We infer that their roles

   were to some degree blurred, especially taking into

   consideration that [Ed] Harvey, who owned [alone] ATS, also

   owned 26 percent of Beech Trucking, and that petitioner, who was

   president and 55-percent owner of2005 Tax Ct. Memo LEXIS 173">*204 Beech Trucking, was an

   employee of ATS.

           *   *   *   *   *   *   *

   Most of the pertinent testimony regarding the Beech Trucking

   drivers' activities came from petitioner. As previously noted,

   petitioner was both president of Beech Trucking and an employee

   of ATS * * * [and] his testimony often employed, ambiguously,

   first-person plural pronouns. * * *

The Court also concluded in Beech Trucking Co. that the record was "unclear as to the extent of any business ATS might have had apart from the services it provided Beech Trucking." 118 T.C. 428">Id. at 443.

In contrast to the record before the Court in 118 T.C. 428">Beech Trucking Co., the Court in Transport Labor I had a complete, extensive, and clear record upon which to base its findings and conclusions and which included the exclusive lease agreement, the driver contract, the TLC driver handbook, and the testimony of representatives of various trucking company clients and TLC. In addition, there was no evidence, and petitioner does not contend, (1) that petitioner or TLC had any overlapping personnel with any trucking company client, (2) that petitioner2005 Tax Ct. Memo LEXIS 173">*205 or TLC owned any interest in any trucking company client, or (3) that any owner of a trucking company client owned an interest in petitioner.²⁹ Cf. 118 T.C. 428">id. at 430-431. Moreover, in contrast to ATS, which insofar as the record in Beech Trucking Co. revealed had only one trucking company as a client, viz., 118 T.C. 428">Beech Trucking Company, id. at 443, during the years at issue TLC had between 100 and 300 trucking company clients, Transp. Labor Contract/Leasing, Inc. & Subs. v. Commissioner, 123 T.C. 154">123 T.C. 156. It is mere speculation on the part of petitioner to assume that if the facts in 118 T.C. 428">Beech Trucking Co. had been virtually the same as the facts in the instant case, which they are not, the Court in Beech Trucking Co. nevertheless would have evaluated the common-law employment factors in the same manner as it did, would not have considered any common-law employment factors other than those that it considered, and would have found that Beech Trucking Company was the employer of the truck drivers whom it leased from ATS.

2005 Tax Ct. Memo LEXIS 173">*206 118 T.C. 428">Beech Trucking Co. is materially distinguishable from the instant case and not binding on the Court with respect to the questions presented here. Petitioner is wrong in asserting that Boyd v. Comm'r, 122 T.C. 305">122 T.C. 305 (2004), holds to the contrary. There was no dispute in 122 T.C. 305">Boyd v. Comm'r, supra, that the trucking company there involved (Continental) was the employer of the truck drivers who drove its trucks and that such trucking company was subject to the section 274(n)(1) limitation. 122 T.C. 305">Id. at 307. The sole issue in 122 T.C. 305">Boyd was the validity and effect of Rev. Proc. 94-77, 1994-2 C.B. 825, 1994 IRB LEXIS 557, 1994-52 I.R.B. 31, , 96-28, Rev. Proc. 96-28, 1996-1 C.B. 686, 1996 IRB LEXIS 101, 1996-14 I.R.B. 31 and Rev. Proc. 96-64, 1996-2 C.B. 427, 1996 IRB LEXIS 366, 1996-53 I.R.B. 52, that are not at issue in the instant case. In determining the validity and effect of those revenue procedures in Boyd, the Court indicated that it would apply "the analysis and reasoning" that Beech Trucking Co. applied in determining the validity and effect of those same revenue procedures. 122 T.C. 305">Id. at 311-312. In so stating, the Court in Boyd was not referring to the Court's discussion in Beech Trucking Co. with respect to the common-law employment factors.

With respect to petitioner's argument2005 Tax Ct. Memo LEXIS 173">*207 that the Court used certain common-law employment factors in Transport Labor I that were inconsistent with the common-law employment factors that the Court used in Beech Trucking Co., petitioner asserts:

   the Court did not apply some of the factors used in Beech

   Trucking, restated factors used in Beech Trucking in

   a materially different way, and added a factor inapplicable to

   three-party transactions. The Court's Opinion also uses a

   different analysis of the factors than the Court did in Beech

   Trucking. * * *

On the record before us, we reject petitioner's assertion.

The list of common-law employment factors that the Court set forth in Beech Trucking Co. was nonexhaustive. Schwieger v. Farm Bureau Ins. Co., 207 F.3d 480">207 F.3d 480, 207 F.3d 480">484 (8th Cir. 2000); Beech Trucking Co. v. Commissioner, 118 T.C. 428">118 T.C. 440. Petitioner does not cite, and we have not found, any authority that precluded the Court in Transport Labor I, in determining whether TLC was the employer of each driver-employee whom it leased to each trucking company client, from considering common-law employment factors in addition to those on which the Court relied2005 Tax Ct. Memo LEXIS 173">*208 in Beech Trucking Co. and from not giving the same weight to certain factors on which the Court relied in Beech Trucking Co.

With respect to petitioner's argument that the Court in Transport Labor I "restated factors used in Beech Trucking in a materially different way", petitioner asserts that the Court in Transport Labor I erred in considering the "sponsorship of * * * employee benefits" rather than the "provision of employee benefits". Petitioner's assertion erroneously assumes that the Court intended a substantive difference when it used the phrase "sponsorship of * * * employee benefits" in Transport Labor I, and not the phrase "provision of employee benefits" that it used in Beech Trucking Co.

In Transport Labor I, the Court found that TLC sponsored certain employee benefits for its driver-employees, including: (1) A section 401(k) plan; (2) a section 125 flexible benefit plan; (3) group or individual health insurance; (4) a $ 5,000 group term life insurance policy; and (5) the option of purchasing additional group term life insurance. Transp. Labor Contract/Leasing, Inc. & Subs. v. Commissioner, 123 T.C. 154">123 T.C. 169. The Court also found: (1) TLC paid the premiums2005 Tax Ct. Memo LEXIS 173">*209 and any administrative costs associated with the $ 5,000 group term life insurance policy; (2) TLC bore the administrative costs but no other costs of the section 401(k) plan, the section 125 flexible spending plan, and the group or individual health insurance; and (3) each driver-employee paid such other costs through payroll deductions.³⁰ Id. Only benefit plans established by an employer for the benefit of such employer's employees qualify for certain favorable tax treatment. See, e.g., secs. 401(a), (k), 125(a), (d), 79(a). Regardless of whether the phrase "sponsorship * * * of employee benefits" or "provision of employee benefits" was used, the fact remains that TLC established certain benefit plans for its driver-employees that could have qualified for such favorable tax treatment only if TLC were the employer of such driver-employees.

With respect to petitioner's argument that the Court in Transport Labor I "restated factors used in Beech Trucking in a materially different way", 2005 Tax Ct. Memo LEXIS 173">*210 petitioner also asserts that in Beech Trucking Co. the Court found that if a relationship ³¹ between a truck driver and a trucking company is "of indefinite duration", such trucking company is the employer of such truck driver. In this connection, petitioner contends:

   Here, substantial evidence proved that the employment

   relationship between the trucking companies and the drivers

   existed before TLC's involvement with the trucking

   companies. The Lease Agreement had no effect on the duration of

   the drivers' relationship with the trucking companies because

   the drivers continued to work in the business of the trucking

   companies. * * *

2005 Tax Ct. Memo LEXIS 173">*211 On the record before us, we reject petitioner's assertion.

The facts of the instant case do not support petitioner's assertion that the exclusive lease agreement "had no effect on the duration of the drivers' relationship" with a trucking company where TLC leased such drivers as driver-employees of TLC to such trucking company as TLC's trucking company client. To the contrary, the exclusive lease agreement had a dramatic effect on such driver's employment relationship. As discussed above, if a truck driver had previously performed services for a trucking company and if such trucking company became a client of TLC by entering into an exclusive lease agreement with TLC, such truck driver's employment arrangement with such trucking company was terminated. 123 T.C. 154">Transp. Labor Contract/Leasing, Inc. & Subs. v. Commissioner, supra at 159. After a trucking company became a client of TLC and terminated the employment arrangement with any truck driver who had previously performed services for such trucking company, TLC had the sole and absolute authority to determine whether to hire such truck driver as a driver-employee. 123 T.C. 154">Id. at 164. TLC exercised that authority by, inter2005 Tax Ct. Memo LEXIS 173">*212 alia, requiring a truck driver, regardless of whether a trucking company client referred such driver to TLC as an applicant for the position of TLC's driver-employee, to pass TLC's screening and approval process before TLC decided whether to hire such truck driver as a driver-employee. Id.

If TLC decided to hire a truck driver who had previously performed services for a trucking company client and if TLC leased such truck driver to such trucking company client, two new relationships involving such truck driver began: (1) A new relationship between TLC and such truck driver as a driver-employee of TLC; and (2) a new relationship between such trucking company client of TLC and such truck driver as a driver-employee of TLC whom TLC leased to such trucking company client. The relationship between TLC and a truck driver as a driver-employee was separate and distinct from the relationship between such trucking company client of TLC and such truck driver as a driver-employee of TLC whom TLC leased to such trucking company client. In addition, both of those new relationships were separate and distinct from any employment arrangement that a truck driver might have had with a trucking company2005 Tax Ct. Memo LEXIS 173">*213 before such trucking company became a trucking company client of TLC.

Petitioner did not persuade us at trial, and does not persuade us in petitioner's motion for reconsideration, that the duration of any employment relationship that may have existed between a truck driver and a trucking company before TLC decided to hire such truck driver as a driver-employee and before such trucking company became a client of TLC should be aggregated with the duration of the relationship between such trucking company client of TLC and such driver-employee where TLC leased such driver-employee to such trucking company client. Any employment arrangement that may have existed between such a truck driver and such a trucking company was terminated when such trucking company became a trucking company client of TLC. The duration of any such employment relationship was not helpful to the Court in determining whether TLC was the employer of such truck driver where TLC decided to hire such truck driver as its driver-employee and leased such driver-employee to such trucking company client. That is why, on the facts presented in the instant case, the Court found in Transp. Labor Contract/Leasing, Inc. & Subs. v. Commissioner, 123 T.C. 154">123 T.C. 195:

2005 Tax Ct. Memo LEXIS 173">*214    In the instant case, it is the nature, and not the

   duration, of the relationship between a driver-employee and TLC

   and the relationship between a driver-employee and a trucking

   company client that determines whether TLC or such trucking

   company client is the employer of such driver-employee.

[Emphasis added.]

In contrast to the instant case, the Court in Beech Trucking Co. did not have before it a situation where the employment arrangement between a truck driver and Beech Trucking Company was terminated when Beech Trucking Company decided to become a client of ATS. In addition, insofar as the record in Beech Trucking Co. revealed, the functions performed by ATS (the driver-leasing company) and Beech Trucking Company with respect to the truck drivers were to some degree blurred. Beech Trucking Co. v. Commissioner, 118 T.C. 428">118 T.C. 441. As the Court in Beech Trucking Co. understood the arrangement between Beech Trucking Company and ATS, truck drivers hired to drive for Beech Trucking Company were to drive, apparently for an indefinite period, equipment owned by Beech Trucking Company, which had final authority to fire them. 2005 Tax Ct. Memo LEXIS 173">*215 118 T.C. 428">Id. at 431. That is why the Court in Beech Trucking Co. stated that "the relationship between the drivers and Beech Trucking was apparently of indefinite duration." 118 T.C. 428">Id. at 442.

With respect to petitioner's argument that the Court in Transport Labor I "added a factor inapplicable to three-party transactions", petitioner asserts that "In a three-party arrangement it is expected that the leasing company will treat the drivers as employees for purposes of employment taxes, such as FUTA and FICA taxes." On the record before us, we reject petitioner's assertion.

Petitioner's assertion that in a "three-party arrangement it is expected that the leasing company will treat drivers as employees for purposes of employment taxes" is not supported by the record in the instant case. The record in Transport Labor I established facts relating to TLC, its trucking company clients, and its driver- employees, but did not establish facts relating to expectations in "three-party arrangements" generally.

In the instant case, if, as petitioner asserts, a trucking company client expected TLC to treat each driver-employee as an employee for employment taxes purposes, it was because2005 Tax Ct. Memo LEXIS 173">*216 such trucking company client expected that TLC would be the employer for all purposes. In that connection, the Court in Transp. Labor Contract/Leasing, Inc. & Subs. v. Commissioner, 123 T.C. 154">123 T.C. 193, stated:

   With respect to each driver-employee, for each payroll period

   TLC was obligated to, and did, pay such driver-employee his or

   her net wages and any per diem amounts as well as the employer's



   share of employment taxes, withhold and pay the driver-



   employee's share of employment taxes, withhold and pay Federal



   and State income taxes, make daily electronic funds transfers of



   the appropriate amounts of such taxes to the IRS and appropriate



   State agencies, and pay workers' compensation insurance

   premiums.

The obligations to pay the employer's share of employment taxes, to withhold and to pay the employee's share of employment taxes, and to withhold and to pay Federal income tax with respect to an employee's wages are obligations generally imposed upon an employer. Secs. 3102(a), 3111(a), 3301, 3402, 3403. TLC's undertaking and satisfying the obligations to withhold and to pay FICA taxes, ³² other2005 Tax Ct. Memo LEXIS 173">*217 employment taxes, and Federal income tax with respect to each driver-employee's wages evidenced that TLC was the employer of each driver-employee. See Kirk v. Harter, 188 F.3d 1005">188 F.3d 1005, 188 F.3d 1005">1008 (8th Cir. 1999); Birchem v. Knights of Columbus, 116 F.3d 310">116 F.3d 310, 116 F.3d 310">313 (8th Cir. 1997); Wilde v. County of Kandiyohi, 15 F.3d 103">15 F.3d 103, 15 F.3d 103">105-106 (8th Cir. 1994).

In addition, with respect to petitioner's assertion that TLC was the employer of each driver-employee for all purposes except the section 274(n)(1) limitation because TLC was what petitioner refers to as a so-called administrative employer of each driver-employee, petitioner does not cite, and we have not found, any authority that supports petitioner's suggestion that an entity may selectively be the employer for purposes of withholding and/or paying employment and Federal income tax but not for other purposes such as the section 274(n)(1) limitation.

With respect to petitioner's2005 Tax Ct. Memo LEXIS 173">*218 argument that, in finding certain facts, the Court in Transport Labor I gave improper weight to certain evidence, petitioner asserts:

   The Court's reliance on the Lease Agreement, Driver Handbook,

   and Driver's Contract also is contrary to Beech Trucking.

   As Beech Trucking noted, it is well-established that "[

   a] contract purporting to create an employer-employee

   relationship is not controlling where application of the common

   law factors to the facts and circumstances indicates the absence

   of such a relationship." * * *

   Furthermore, the Court gave too much weight to the Driver

   Handbook. The Handbook only described ordinary activities

   carried out by truck drivers that were either recitations of

   Department of Transportation requirements, obvious to a licensed

   truck driver, or merely advisory, not mandatory. While TLC may

   have had written policies aimed at reducing workers'

   compensation claims, there is no evidence that TLC controlled

   the work of the drivers through those policies. [Citations

   omitted.]

On the record before us, we reject petitioner's2005 Tax Ct. Memo LEXIS 173">*219 assertion.

A contract purporting to create an employer-employee relationship is not controlling where application of the common-law employment factors to the facts and circumstances indicates the absence of such a relationship. Profl. & Executive Leasing, Inc. v. Commissioner, 89 T.C. 225">89 T.C. 225, 89 T.C. 225">233 (1987), affd. 862 F.2d 751">862 F.2d 751 (9th Cir. 1988). Petitioner does not cite, and we have not found, any authority which requires the Court to ignore a contract that designates a person as the employer of certain individuals where the totality of the facts and circumstances surrounding such person, such individuals, and one or more third persons who use the services of one or more of such individuals is not inconsistent with such a contract. In Transport Labor I, petitioner failed to show that the totality of the facts and circumstances surrounding TLC, each driver- employee, and each trucking company client was inconsistent with the exclusive lease agreement under which each such trucking company client used the services of one or more of such driver-employees.

As an illustration, the exclusive lease agreement provided in pertinent part that TLC "shall in its absolute discretion, 2005 Tax Ct. Memo LEXIS 173">*220 hire * * * Lessor's [TLC's] employees". Transp. Labor Contract/ Leasing, Inc. & Subs. v. Commissioner, 123 T.C. 154">123 T.C. 160. The Court in Transport Labor I found that TLC retained the sole and absolute authority to hire each driver-employee. 123 T.C. 154">Id. at 164. The record in the instant case established: (1) Before TLC hired a truck driver as a driver- employee, such truck driver had to pass TLC's screening and approval process, which was designed to determine a truck driver's fitness to serve as a driver-employee of TLC; (2) TLC hired approximately 25 percent of its driver-employees through its own recruitment efforts; and (3) TLC rejected 10 to 15 percent of the truck drivers whom its trucking company clients referred to it. Id. In Transport Labor I, petitioner failed to show that the totality of the facts and circumstances with respect to the hiring of each driver-employee was inconsistent with the exclusive lease agreement.

As a further illustration, the exclusive lease agreement provided in pertinent part that TLC shall "direct the work and conduct" of each driver-employee. The Court in Transport Labor I found that TLC had the right to, and did, direct and control2005 Tax Ct. Memo LEXIS 173">*221 each driver-employee as to the operation and the loading and unloading of the truck of the trucking company client that leased such driver- employee from TLC and as to the details and means by which that operation and that loading and unloading were to be accomplished. 123 T.C. 154">Id. at 168. TLC exercised that right through, inter alia, the driver contract that TLC required each driver-employee to sign and the TLC driver handbook, which was incorporated into and made part of that driver contract. In Transport Labor I, petitioner failed to show that the totality of the facts and circumstances with respect to the control exercised over each driver-employee was inconsistent with the exclusive lease agreement.

As a final illustration, the exclusive lease agreement provided in pertinent part that TLC "shall in its absolute discretion, * * * fire * * * Lessor's [TLC's] employees". 123 T.C. 154">Id. at 160. The Court in Transport Labor I found that TLC retained the sole and absolute authority to terminate each driver-employee's employment with TLC. 123 T.C. 154">Id. at 164. The record in the instant case established: (1) If a trucking company client no longer wanted or needed the services2005 Tax Ct. Memo LEXIS 173">*222 of a particular driver-employee, TLC did not continue leasing such driver-employee to that trucking company client but instead attempted to lease such driver-employee to another trucking company client; and (2) TLC also reassigned to another trucking company client any driver-employee who no longer wished to work with a particular trucking company client to which TLC had assigned such driver- employee. 123 T.C. 154">Id. at 169-170. In Transport Labor I, petitioner failed to show that the totality of the facts and circumstances with respect to the termination of each driver-employee's employment was inconsistent with the exclusive lease agreement.

With respect to petitioner's assertion that the Court in Transport Labor I "gave too much weight" to the TLC driver handbook and the driver contract, not only does that assertion ignore that the Court is "the trier of the facts, the judge of the credibility of witnesses and of the weight of the evidence, and the drawer of appropriate inferences", Hamm v. Commissioner, 325 F.2d 934">325 F.2d 934, 325 F.2d 934">938 (8th Cir. 1963), affg. T.C. Memo. 1961-347, it disregards that TLC had the right to, and did, direct and control each driver- employee2005 Tax Ct. Memo LEXIS 173">*223 as to the operation and the loading and unloading of the truck of the trucking company client that leased such driver-employee from TLC and as to the details and means by which that operation and that loading and unloading were to be accomplished, Transp. Labor Contract/Leasing, Inc. & Subs. v. Commissioner, 123 T.C. 154">123 T.C. 168. The TLC driver handbook, which was incorporated into and made part of the driver contract, contained TLC's detailed instructions that it required each driver-employee to follow with respect to, inter alia, fueling the trucks, starting the trucks' engines, hooking up the trucks to trailers, parking the trucks, driving the trucks to achieve maximum fuel savings, braking the trucks, operating trucks in cold weather, departure times of the trucks, and loading the cargo on and unloading it off the trucks.³³ Id. Each driver contract provided other instructions for each driver-employee. Such instructions required that each driver-employee was, inter alia, to attend at least two safety meetings per year, not to be under the influence of alcohol while performing services for TLC, not to consume illegal drugs, to complete any paperwork required by TLC or its2005 Tax Ct. Memo LEXIS 173">*224 affiliates, and not to allow any personal, legal or financial problems, including attitude, to interfere with the performance of services for TLC. If a driver-employee failed to comply with such instructions, TLC could terminate such driver-employee's employment. 123 T.C. 154">Id. at 165-166.

The Court in Transport Labor I found that the driver contract and the TLC driver handbook, which was incorporated into and made part of the driver contract, evidenced that TLC had the right to, and did, control the work and conduct of each driver-employee. 123 T.C. 154">Id. at 188. Consequently, the Court gave appropriate weight to such evidence.

With respect2005 Tax Ct. Memo LEXIS 173">*225 to petitioner's argument that, in finding certain facts, the Court in Transport Labor I gave improper weight to certain evidence, petitioner advances several additional assertions with respect to certain common-law employment factors, which we address below.

   Right To Control Driver-Employee

Petitioner contends that the Court in Beech Trucking Co. found that Beech Trucking Company controlled the truck drivers whom ATS leased to it because Beech Trucking Company performed certain dispatching functions with respect to such truck drivers. Petitioner asserts that the Court in Transport Labor I should have found that each trucking company client controlled each driver-employee whom TLC leased to such trucking company client because such trucking company client performed dispatching functions with respect to such driver- employee similar to the dispatching functions that Beech Trucking Company performed. On the record before us, we reject petitioner's assertion.

The Court in Transport Labor I found that during the taxable years at issue each trucking company client performed dispatching functions with respect to each driver-employee whom TLC leased to such trucking company client2005 Tax Ct. Memo LEXIS 173">*226 by giving each driver-employee his or her route assignments, directing each driver-employee as to the loads assigned to him or her and as to the times by which such driver- employee had to deliver those loads, and relaying any instruction of its customers relating to such loads (sometimes hereinafter referred to collectively as the trucking company client dispatching functions). 123 T.C. 154">Id. at 167. The Court also found that each trucking company client's performing such dispatching functions did not give such trucking company client control over each driver- employee within the meaning of section 31.3121(d)-1(c)(2) of the Employment Tax Regulations. Id. at 188. The Court found in Transport Labor I that the dispatching functions that each trucking company client performed were necessary for the operation of such trucking company client's trucking business. 123 T.C. 154">Id. at 167. That is to say, in order for a trucking company client to operate its trucking business successfully, such trucking company client had to give each driver-employee his or her route assignments, direct each driver-employee as to the loads assigned to him or her and as to the times by which2005 Tax Ct. Memo LEXIS 173">*227 such driver-employee had to deliver those loads, and relay to each driver-employee any instruction of its customers relating to such loads.

In contrast, in order for TLC to operate its driver-leasing business successfully, TLC had to direct and control the work and conduct of its driver-employees in order to, inter alia, minimize workers' compensation claims of such driver-employees. A principal advantage for a trucking company of leasing driver-employees from TLC, as opposed to employing truck drivers directly, related to TLC's ability to obtain cost-effective workers' compensation insurance for TLC's driver-employees. 123 T.C. 154">Id. at 158. In order to minimize workers' compensation claims and thereby enable TLC to maintain cost- effective workers' compensation insurance, TLC had to, and did, control the work and conduct of each driver-employee. If TLC had not controlled the work and conduct of each driver-employee so as to minimize workers' compensation claims, its workers' compensation insurance expense would have increased substantially, thereby negating a principal advantage for a trucking company in leasing driver-employees from TLC, instead of employing truck drivers directly.

2005 Tax Ct. Memo LEXIS 173">*228 As discussed above, each exclusive lease agreement provided in pertinent part that TLC had the right to, and did, exercise control over the work and conduct of each driver-employee, 123 T.C. 154">id. at 168, and that TLC exercised that right through, inter alia, the TLC driver handbook and the driver contract, 123 T.C. 154">id. at 188. The Court in 118 T.C. 428">Beech Trucking Co. did not have evidence before it, such as the exclusive lease agreement, the driver contract, and the TLC driver handbook that was incorporated into and made part of the driver contract, which would have enabled the Court in Beech Trucking Co. to have found facts such as those the Court found in Transport Labor I. It is mere speculation on the part of petitioner to assume that if the facts in 118 T.C. 428">Beech Trucking Co. had been virtually the same as the facts in the instant case, which they are not, the Court in Beech Trucking Co. nevertheless would have found that Beech Trucking Company controlled the work and conduct of the truck drivers whom it leased from ATS because of the dispatching functions that Beech Trucking Company performed with respect to such truck drivers.

With respect to whether TLC controlled the work and conduct2005 Tax Ct. Memo LEXIS 173">*229 of each driver-employee, petitioner asserts:

   the Court overlooked the testimony of Ardell DeBerg, TLC's CEO

   and former sales representative. Mr. DeBerg testified that in

   all important respects, the control of the trucking company over

   the drivers was unchanged by the Lease Agreement. In other

   words, the control of the trucking companies over the drivers

   when the drivers were indisputably employees of the trucking

   companies did not change after TLC took over administrative

   functions.

On the record before us, we reject petitioner's assertion.

Ardell DeBerg (Mr. DeBerg), TLC's chief executive officer at the time of the trial in the instant case and TLC's sales representative during the years at issue, gave the testimony that petitioner cites with respect to the statement that "TLC becomes the employer." That statement appeared in a form letter that Mr. DeBerg, as TLC's sales representative, sent to prospective clients. Mr. DeBerg testified (Mr. DeBerg's testimony):

   TLC becomes the employer. What I used to explain was an issue

   for the trucking company owner normally was but they're my

   employees. 2005 Tax Ct. Memo LEXIS 173">*230 What are my employees going to think if now you

   become the employer. That was usually an issue for them.

   I would explain to them that there's really two kinds of

   employers. There's the administrative employer, which that's

   what we are. We take care of all the tax deposits, the tax

   returns for the employees, the work comp insurance, and then

   there's the physical employer, which you remain the physical

   employer. You tell them -- well, the phrase we used to use was,

   The worse thing that can happen is nothing changes.

   What I used to use quite often was: In order to be an employer,

   you need to be an attorney, you need to be an accountant, you

   need to be a priest and a shrink sometimes. Lean on us to be the

   attorney and the accountant, and we handle all that back room

   work for you, but you're still the boss. You handle the day-to-

   day tasks, so the worst thing that can happen is nothing

   changes. The employee doesn't really -- we're pretty invisible.

   [Reproduced literally.]

Contrary to petitioner's assertion, the Court in Transport Labor I did not overlook2005 Tax Ct. Memo LEXIS 173">*231 the testimony of Mr. DeBerg. Petitioner chooses to focus on the portion of Mr. Deberg's testimony where he stated: "You handle the day-to-day tasks, so the worst thing that can happen is nothing changes. The employee doesn't really -- we're pretty invisible." The Court considered Mr. DeBerg's statement "the worst thing that can happen is nothing changes" to be a sales pitch and, as such, gave it no weight.

The Court considered Mr. DeBerg's testimony concerning each trucking company client's handling "the day-to-day tasks" to be a reference to the dispatching functions that each trucking company client performed. Such interpretation is shared by petitioner. In petitioner's memorandum in support of petitioner's motion for reconsideration, petitioner points to testimony by Ms. Fiereck and George Erger, a former employee of Parkway, that Parkway continued to perform trucking company client dispatching functions after Parkway entered into the exclusive lease agreement with TLC as corroborating Mr. DeBerg's testimony that each trucking company client continued to handle the "day-to-day tasks". As discussed above, the Court in Transport Labor I found that each trucking company client's performing2005 Tax Ct. Memo LEXIS 173">*232 the trucking company client dispatching functions did not give such trucking company client control over each driver-employee within the meaning of section 31.3121(d)-1(c)(2) of the Employment Tax Regulations. Transp. Labor Contract/Leasing, Inc. & Subs. v. Commissioner, 123 T.C. 154">123 T.C. 188.

Hiring of Each Driver-Employee

Petitioner asserts:

   Ms. Schrupp also testified that TLC's involvement in hiring was

   limited to an advisory role; TLC did administrative screening

   and performed a DOT-required background check "so that [TLC

   could] advise the client if this is a good prospect for them." *

   * *

On the record before us, we reject petitioner's assertion.

Ms. Schrupp's testimony that TLC's involvement in hiring was limited to an advisory role (Ms. Schrupp's testimony with respect to hiring) was given with respect to a one-page marketing brochure. During the taxable years at issue, Ms. Schrupp worked in payroll and sales and marketing support. Ms. Schrupp would not have been in the best position to observe TLC's hiring procedures. Ms. Schrupp's testimony with respect to hiring was inconsistent with: (1) The testimony of2005 Tax Ct. Memo LEXIS 173">*233 Ms. Fiereck, whom the Court found to be credible, 123 T.C. 154">id. at 186, that "the relationship that they [TLC] had was for the hiring and firing or termination of that driver"; ³⁴ (2) TLC's screening and approval process, which each truck driver had to pass before TLC decided whether to hire such truck driver as a driver-employee; (3) the parties' stipulation that TLC hired approximately 25 percent of its driver-employees through its own recruitment effort, thereby rejecting petitioner's assertion that TLC's involvement in the hiring of each driver-employee was limited to an advisory role; (4) Ms. Fiereck's testimony that 10 to 15 percent of truck drivers referred to TLC were rejected by TLC, thereby rejecting petitioner's assertion that TLC's involvement in the hiring of each driver-employee was limited to an advisory role; and (5) the exclusive lease agreement that TLC entered into with each trucking company client, which provided in pertinent part that TLC had the sole and absolute authority to hire each driver-employee.³⁵

2005 Tax Ct. Memo LEXIS 173">*234 The evidence supporting a finding that TLC had the sole and absolute authority to hire each driver-employee substantially outweighed Ms. Schrupp's questionable testimony that TLC exercised only an advisory role in the hiring of each driver-employee. Consequently, the Court did not rely on such testimony of Ms. Schrupp.

   Right To Assign Additional Projects to Each Driver-

   Employee

Petitioner asserts:

   There is no evidence that TLC reassigned drivers while they were

   working for the trucking companies. In fact, the parties agreed

   that "[i]n practice, TLC did not reassign a Driver once the

   Driver was assigned to a Trucking Company without permission

   from the Trucking Company." * * * Moreover, respondent presented

   no evidence that drivers were ever reassigned. Again, the

   Opinion elevates the form of the Lease Agreement over the

   substance of the actual relationship.

On the record before us, we reject petitioner's assertion.

Petitioner's assertion that "There is no evidence that TLC reassigned drivers while they were working for the trucking companies" is not supported by the record. The Court in Transport2005 Tax Ct. Memo LEXIS 173">*235 Labor I found that TLC "reassigned to another trucking company client any driver-employee who no longer wished to work with a particular trucking company client to which TLC had assigned such driver- employee." Transp. Labor Contract/Leasing, Inc. & Subs. v. Commissioner, 123 T.C. 154">123 T.C. 170. The record contained batch reports that have a column titled "Reassign Date", and certain of those batch reports reflected the dates on which certain driver-employees were reassigned from certain trucking company clients. TLC's practice of not reassigning a driver-employee once such driver-employee was assigned to a trucking company client which desired to lease such driver-employee and for which such driver-employee wanted to work was merely a sound business practice by TLC. 123 T.C. 154">Id. at 190. TLC, like any business, was interested in accommodating, to the extent feasible, the requests of its trucking company clients. Id.

Assuming arguendo that the record had established that TLC never reassigned any driver-employee, petitioner is wrong in asserting that TLC must have actually reassigned a driver-employee in order for TLC to be the employer of such driver-employee. It was the2005 Tax Ct. Memo LEXIS 173">*236 right to assign additional projects to each driver-employee, and not the actual assignment of such projects, that evidenced that TLC was the employer of such driver-employee. Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318">503 U.S. 318, 503 U.S. 318">323, 117 L. Ed. 2d 581">117 L. Ed. 2d 581, 112 S. Ct. 1344">112 S. Ct. 1344 (1992); Alford v. United States, 116 F.3d 334">116 F.3d at 338; Beech Trucking Co. v. Commissioner, 118 T.C. 428">118 T.C. 440. In Transport Labor I, the Court found that while TLC was leasing a driver-employee to a trucking company client, TLC had the right to lease that driver-employee to another trucking company client and thereby assign additional projects to such driver- employee. 123 T.C. 154">Transp. Labor Contract/Leasing, Inc. & Subs. v. Commissioner, supra at 169.

Employee Benefits for Each Driver-Employee

With respect to the sponsorship of employee benefits, petitioner asserts that each trucking company client paid for various benefits, including a section 401(k) plan, section 125 flexible benefit plan, group or individual health insurance, and $ 5,000 group term life insurance policy (collectively, the employee benefits) provided to each driver-employee and that that alleged fact supports its position that each trucking2005 Tax Ct. Memo LEXIS 173">*237 company client was the employer of each driver- employee whom TLC leased to such trucking company client. In support of that assertion, petitioner contends as follows:

   The Opinion found that TLC sponsored 401(k), 125 flexible

   benefit, and group/individual health insurance plans. The

   Opinion overlooked the testimony of Ms. Schrupp, who testified:

   Q: And when you say that TLC offers benefits like 401(k) and

   health insurance, does TLC actually bear the cost of those

   benefits?

   A: No. It's paid by the trucking company. (Tr. 92: 10-

   13(Schrupp)(emphasis added).)

   Q: [D]oesTLC pay for any portion of those benefits?

   A: Not to my knowledge.

   (Tr. 103: 12-15(Schrupp).) [Reproduced literally.]

On the record before us, we reject petitioner's assertion.

The Court did not overlook the above-quoted testimony of Ms. Schrupp. The Court found that testimony, like Ms. Schrupp's testimony with respect to the hiring of driver-employees, to be questionable. Indeed, Ms. Schrupp's testimony that each trucking company client paid for the costs of the employee benefits was contradicted by her2005 Tax Ct. Memo LEXIS 173">*238 own testimony and by the parties' stipulation of facts. On cross- examination by respondent's counsel, Ms. Schrupp testified:

   Q Now, Ms. Schrupp, TLC has a 401(k) plan. Correct?

   A Yes.

   Q And not all the drivers participate in it, but some do.

   Correct?

   A Correct.

   Q And the payments for the drivers who participate in the 401(k)

   plan are paid for by the drivers through payroll withholding.

   Correct?

   A Correct.

   Q TLC also has a flexible spending plan. Correct?

   A Yes.

   Q And, again, some of the drivers participate and some do not.

   A Correct.

   Q And the drivers who participate pay for that themselves

   through payroll withholding. Correct?

   A Correct.

   Q And TLC also offers health insurance to the drivers. Correct?

   A Yes.

   Q Now, in some instances, drivers pay for that health insurance

   solely through payroll deductions. Correct?

   A I believe that the trucking company had a participation level

   that they had to pay for.

   Q So your understanding is that2005 Tax Ct. Memo LEXIS 173">*239 as to health insurance, there

   was participation by the trucking companies in all cases or just

   some?

   A Some.

The parties' stipulation of facts provided in pertinent part:

   The cost of the $ 5,000 group term life insurance policy was paid

   for by TLC. TLC bore the cost of administering the other * * *

   [employee benefits], but these administrative costs did not

   contribute to the direct costs of the benefits. In most cases,

   the direct costs of the benefits were funded entirely by the

   Drivers through payroll deductions. However, some Trucking

   Companies did contribute to the cost of the Drivers' health

   insurance. * * *

   Termination of the Employment of a Driver-Employee

Petitioner asserts:

   In other words, even though drivers in Beech Trucking may have

   been turned back to the leasing company for reassignment, the

   Court [in Beech Trucking Co.] looked to the termination of the

   relationship between the driver and the trucking company, which

   in practice the trucking company controlled.

Petitioner appears to be contending that, because a trucking2005 Tax Ct. Memo LEXIS 173">*240 company client was able to decline continuing to lease a particular driver-employee whom it no longer wished to use, such trucking company client had the authority to terminate such driver-employee's employment with TLC. That is because, according to petitioner, the Court in Beech Trucking Co. found that Beech Trucking Company's declining to continue leasing a truck driver whom it no longer wished to use evidenced that Beech Trucking company had the final authority to terminate such truck driver's employment with ATS. Beech Trucking Co. v. Commissioner, 118 T.C. 428">118 T.C. 442. On the record before us, we reject petitioner's assertion.

In contrast to the instant case, the record in Beech Trucking Co. did not establish that ATS (the driver-leasing company) leased truck drivers to any entity other than 118 T.C. 428">Beech Trucking Company. ³⁶ Id. at 443. Insofar as the record in Beech Trucking Co. revealed, by declining to continue leasing a truck driver whom it no longer wished to use, Beech Trucking Company, in effect, assured such truck driver's termination as an employee.

2005 Tax Ct. Memo LEXIS 173">*241 In the instant case, during the years at issue TLC had between 100 and 300 trucking company clients. Transp. Labor Contract/Leasing, Inc. & Subs. v. Commissioner, 123 T.C. 154">123 T.C. 156. As of the time of trial in this case, TLC leased a total of 5,563 driver-employees to a total of 453 trucking company clients. Id. TLC frequently was successful in reassigning a driver-employee from one trucking company client that no longer wished to use such driver-employee to another trucking company client. 123 T.C. 154">Id. at 169-170. A trucking company client's declining to continue leasing a driver-employee whom it no longer wished to use did not evidence that such driver-employee's employment with TLC was terminated. TLC also reassigned to another trucking company client any driver-employee who no longer wished to work with a particular trucking company client to which TLC had assigned such driver-employee. Id. The Court in Transport Labor I found that TLC had the "sole and absolute authority * * * to terminate each driver-employee's employment with TLC." 123 T.C. 154">Id. at 164.

With respect to petitioner's argument that, in determining whether TLC was the employer of each driver-employee2005 Tax Ct. Memo LEXIS 173">*242 whom it leased to one of its trucking company clients, the Court gave improper weight to certain facts that it had found, petitioner asserts:

   The Court used the term "neutral" to describe certain factors

   which the Court concluded were not important in its decision * *

   *. This categorization of certain factors was in error for at

   least two reasons: (1) the Court was not free to disregard

   certain factors; and (2) a factor should be considered "neutral"

   only when there is evidence favoring both sides, in other words,

   when the court is unable to determine which party the factor

   favors.

On the record before us, we reject petitioner's assertion.

As discussed above, the Court in Transport Labor I did not disregard any common-law employment factors. With respect to petitioner's assertion that a common-law employment factor should be considered neutral only when there is evidence favoring both sides, that assertion ignores that the Court is "the trier of the facts, the judge of the credibility of witnesses and of the weight of the evidence, and the drawer of appropriate inferences", Hamm v. Commissioner, 325 F.2d 934">325 F.2d at 938.2005 Tax Ct. Memo LEXIS 173">*243 The Court in Transport Labor I was free to give evidence whatever weight it considered to be appropriate. Moreover, the Court does not consider a factor to be neutral only when there is evidence favoring both parties' positions. For example, with respect to the factors used to determine whether a request for relief under section 6015(f) should be granted, a factor may be neutral when there is evidence that such factor is not applicable. ³⁷ In such a case, any such neutral factor does not weigh in favor of or against granting relief under section 6015(f).

The Court in Transport Labor I used the term "neutral" to designate those common-law employment factors which, after analysis based on the facts and circumstances in the instant case, did not assist the Court in determining whether TLC or each trucking company client was the employer of each driver-employee whom TLC leased to such trucking company client. By way of illustration, in Transport2005 Tax Ct. Memo LEXIS 173">*244 Labor I the Court found that "TLC's leasing a driver-employee to a trucking company client for which such driver-employee had worked before such trucking company client entered into an exclusive lease agreement with TLC is a neutral factor in determining whether TLC was the employer of such driver-employee." Transp. Labor Contract/Leasing, Inc. & Subs. v. Commissioner, 123 T.C. 154">123 T.C. 195. The Court found such common-law employment factor to be neutral because, as discussed above, the record established that, when a trucking company became a client of TLC, such trucking company terminated whatever employment arrangement existed between a truck driver and such trucking company. After analysis based on the facts and circumstances in the instant case, evidence that TLC leased a driver-employee to a trucking company client for which such driver- employee had worked before such trucking company client entered into an exclusive lease agreement with TLC did not assist the Court in determining whether TLC or such trucking company client was the employer of each driver-employee whom TLC leased to such trucking company client.

With respect to petitioner's argument that, in determining2005 Tax Ct. Memo LEXIS 173">*245 whether TLC was the employer of each driver-employee whom it leased to its trucking company clients, the Court gave improper weight to certain facts, petitioner advances several additional assertions with respect to certain common-law employment factors, which we address below.

   Hiring of Each Driver-Employee

Petitioner asserts:

   The Court found on the hiring factor that TLC had the sole and

   absolute authority to hire each driver-employee. * * * This

   finding was based on the Lease Agreement, which gave TLC the

   "sole and absolute right to hire."

   Beech Trucking is to the contrary. The Court here

   overlooked the conclusion in Beech Trucking that an

   agreement of the parties would not control if the parties'

   conduct showed otherwise. Here the parties' Stipulation was that

   when a trucking company entered a Lease Agreement with TLC, "the

   Trucking Company would terminate all of its existing drivers'

   employment. TLC would then generally hire all of the drivers who

   passed its approval process and assigned them [back] to the

   Trucking Company." * * *

   Also, while2005 Tax Ct. Memo LEXIS 173">*246 TLC advertised for and attempted to recruit new

   drivers, the parties stipulated that "the Trucking Companies

   located most new Drivers and then referred them to TLC for

   approval and hiring" by TLC for assignment to the trucking

   company that had located the driver for employment. * * * The

   trucking companies located about 75 percent of the new drivers,

   and TLC only located about 25 percent of the new drivers. * * *

   The Court's analysis here is contrary to Beech Trucking

   in another respect. In Beech Trucking, the Court found

   that the leasing company hired the drivers and provided the

   drivers with some orientation. * * * Although the leasing

   company hired the drivers, the Court in Beech Trucking

   accurately described the leasing company's role as a "driver

   procurement and payroll service." * * * On nearly identical

   facts in this case, the Court inexplicably reached the opposite

   result. [Reproduced literally.]

On the record before us, we reject petitioner's argument.

As discussed above, the facts presented in 118 T.C. 428">Beech Trucking Co. are materially distinguishable from2005 Tax Ct. Memo LEXIS 173">*247 the facts in the instant case. In Beech Trucking Co., ATS (the driver-leasing company) procured truck drivers for Beech Trucking Company but, as discussed above, the record was "unclear as to the extent of any business ATS might have had apart from the services it provided Beech Trucking". Beech Trucking Co. v. Commissioner, 118 T.C. 428">118 T.C. 443. Thus, insofar as the record in Beech Trucking Co. revealed, any truck drivers whom ATS procured were procured only for Beech Trucking Company's use. Indeed, Beech Trucking Company reimbursed ATS for any expenses related to ATS's truck driver procurement. 118 T.C. 428">Id. at 442.

In the instant case, TLC had the sole and absolute authority to hire each driver-employee. Transp. Labor Contract/Leasing, Inc. & Subs. v. Commissioner, 123 T.C. 154">123 T.C. 164. Before TLC decided whether to hire a truck driver as a driver-employee, such truck driver had to pass TLC's screening and approval process. Id. TLC hired approximately 75 percent of its driver-employees through referrals of trucking company clients, but TLC also hired approximately 25 percent of its driver-employees through its own recruitment efforts. ³⁸TLC rejected 10 to 152005 Tax Ct. Memo LEXIS 173">*248 percent of truck drivers whom its trucking company clients referred to it. Id. In addition, petitioner does not contend, and there is no evidence, that any trucking company client reimbursed TLC for TLC's expenses relating to TLC's recruitment of any driver-employee.

Petitioner does not explain how the parties' stipulation on which it relies ³⁹ is inconsistent2005 Tax Ct. Memo LEXIS 173">*249 with the Court's finding in Transport Labor I that TLC had the sole and absolute authority to hire a truck driver as one of its driver-employees. Id. Indeed, the parties' stipulation supports the Court's finding. When each trucking company client entered into an exclusive lease agreement with TLC, it ended whatever employment arrangement it had with the truck drivers who were then working for it and relied on TLC to provide through the exclusive lease agreement the services of one or more of TLC's driver-employees. ⁴⁰123 T.C. 154">Id. at 159.

2005 Tax Ct. Memo LEXIS 173">*250    Source of Instrumentalities and Tools

Petitioner asserts:

   The parties stipulated in this case that the trucking companies

   were the source of the instrumentalities and tools of the

   drivers * * *, just as was the case with the trucking company in

   Beech Trucking. Because the facts clearly favored TLC,

   this factor must be considered to be an indication that the

   trucking companies were the common law employers.

On the record before us, we reject petitioner's assertion.

The Court in Beech Trucking Co. based its findings and conclusions upon the record before it. As discussed above, the record in Beech Trucking Co. was "relatively sparse". It did not contain evidence such as an exclusive lease agreement, a driver contract, or a driver handbook. Beech Trucking Co. v. Commissioner, 118 T.C. 428">118 T.C. 441. In addition, there was no evidence, and petitioner does not contend, (1) that petitioner or TLC had any overlapping personnel with any trucking company client, (2) that petitioner or TLC owned any interest in any trucking company client, or (3) that any owner of a trucking company client owned an interest in petitioner. 2005 Tax Ct. Memo LEXIS 173">*251 Cf. 118 T.C. 428">id. at 430-431.

In Transport Labor I, the Court found that, both before and after entering into an exclusive lease agreement with TLC, each trucking company client owned or leased the trucks, semitrailers, terminals, and other equipment and facilities used in its trucking business (collectively, the trucking business instrumentalities and tools). Transp. Labor Contract/Leasing, Inc. & Subs. v. Commissioner, 123 T.C. 154">123 T.C. 167. The Court also found in Transport Labor I that "TLC was a driver-leasing company that leased one or more truck drivers to small and mid-sized independent trucking companies which used such truck drivers to transport goods and merchandise." 123 T.C. 154">Id. at 156. TLC was in the business of leasing driver-employees, and not in the trucking business, and each trucking company client was in the trucking business.

Each trucking company client's owning or leasing the trucking business instrumentalities and tools for such client's trucking business did not evidence that such trucking company client was the employer of each driver-employee TLC leased to such trucking company client. Such trucking company client needed to own or lease the2005 Tax Ct. Memo LEXIS 173">*252 trucking business instrumentalities and tools in order to conduct its trucking business, but could have procured the services of truck drivers to use in that business through other arrangements, e.g., by leasing them from a person engaged in the driver-leasing business. 123 T.C. 154">Id. at 190, 194.

In contrast, TLC's failure to provide the trucking business instrumentalities and tools did not evidence that the driver- employees were not its employees because such instrumentalities and tools were not the instrumentalities and tools of TLC's business, viz., leasing driver-employees. After analysis based on the facts and circumstances in the instant case, evidence that each trucking company client, and not TLC, provided the trucking business instrumentalities and tools did not assist the Court in determining whether TLC or each trucking company client was the employer of each driver-employee whom TLC leased to such trucking company client. That is why the Court in Transport Labor I found on the record presented to it that each trucking company client's owning or leasing the trucking business instrumentalities and tools used by each driver- employee whom it leased from TLC was a neutral2005 Tax Ct. Memo LEXIS 173">*253 factor in determining whether TLC was the employer of each driver-employee. 123 T.C. 154">Id. at 190. It is mere speculation on the part of petitioner to assume that if the facts in 118 T.C. 428">Beech Trucking Co. had been virtually the same as the facts in the instant case, which they are not, the Court in Beech Trucking Co. nevertheless would have found that Beech Trucking Company was the employer of the truck drivers whom it leased from ATS because Beech Trucking Company supplied the instrumentalities and tools to those truck drivers.

Method of Payment

Petitioner asserts:

   In addition, the Court here overlooked the uncontradicted

   testimony of Kristi Schrupp, who testified that the trucking

   company determined drivers' salaries and that there was no time

   when TLC would make this decision. * * * Ms. Fiereck,

   respondent's witness, corroborated this testimony when she

   testified that the trucking company determined how much a

   particular driver was paid, and that TLC had no role in this

   determination. * * *

           *   *   *   *   *   *   *

   The Opinion found the factor of the2005 Tax Ct. Memo LEXIS 173">*254 source of funds used to pay

   payroll to be a "neutral" factor. On the other hand, the Opinion

   also found that TLC's preparing of the paychecks to be a factor

   evidencing TLC as the employer. The Court overlooked the fact

   that these conclusions are inconsistent, and elevated the

   substance of the transaction (the source of the funds) over the

   form of the transaction (the ministerial act of check

   processing).

   The Court also disregarded the most important aspects of

   payroll. The trucking companies determined whether and how much

   the drivers would be paid. * * * The trucking companies also

   determined how drivers would be paid, i.e., by direct

   deposit, checks sent directly to the drivers, or checks sent to

   the trucking companies for distribution to drivers. * * * The

   Court should have concluded that this factor favored a finding

   that the trucking companies were the employers.

           *   *   *   *   *   *   *

   * * * In Beech Trucking, the Court on facts nearly

   identical to those here did not find method of payment2005 Tax Ct. Memo LEXIS 173">*255 to

   be a negative factor. Yet, the Court in this case inexplicably

   reached the opposite result. In Beech Trucking, the Court

   found that "although [the leasing company] issued the drivers'

   weekly paychecks, paid workers compensation [insurance

   premiums], and maintained a section 401(k) plan for the drivers,

   [the trucking company] reimbursed [the leasing company] weekly

   for its expenditures, plus a service charge." * * *

   The facts here are even more compelling -- TLC did not advance

   funds and seek reimbursement from the trucking companies.

   Rather, TLC required payment before issuing payroll. Mr.

   DeBerg, Ms. Schrupp, and Ms. Fiereck all testified that the

   trucking company transferred funds to TLC, usually by wire

   transfer, before TLC would issue checks. * * *

   [Reproduced literally.]

On the record before us, we reject petitioner's assertion.

Petitioner's assertion that the facts in 118 T.C. 428">Beech Trucking Co. are "nearly identical to those" in the instant case is wrong. As discussed above, the facts in 118 T.C. 428">Beech Trucking Co. are materially distinguishable from the facts in2005 Tax Ct. Memo LEXIS 173">*256 the instant case, including the facts relating to the "method of payment". In Beech Trucking Co. v. Commissioner, 118 T.C. 428">118 T.C. 442, the Court found that ATS, the driver-leasing company, issued the drivers' weekly paychecks, paid workers' compensation, and maintained a section 401(k) plan for the drivers and that Beech Trucking Company reimbursed ATS weekly for its expenditures and paid ATS a separate service charge for the services ATS rendered to Beech Trucking Company. In Transport Labor I, with respect to the "method of payment", ⁴¹ the Court found that each payroll period each trucking company client paid TLC a lease fee that was not broken down into component parts, which TLC used (1) to cover its costs, including the respective net wages and per diem amounts, if any, that TLC determined to pay its driver-employees, and (2) to generate a profit. Transp. Labor Contract/Leasing, Inc. & Subs. v. Commissioner, 123 T.C. 154">123 T.C. 173-174. With the exception of certain trucking company clients that reimbursed TLC for certain premiums with respect to health insurance for certain driver- employees, ⁴² no trucking company client reimbursed TLC for any of TLC's expenses, 2005 Tax Ct. Memo LEXIS 173">*257 and no trucking company client paid TLC a separate service charge.

Petitioner's assertion that the Court found in Transport Labor I that TLC's preparation of each driver-employee's paycheck was a factor evidencing that TLC was the employer of each driver-employee is wrong. Contrary to petitioner's assertion, the Court found in Transport Labor I, "that TLC's payment of each driver-employee's net wages and any per diem amounts is a factor evidencing that TLC was the employer of each driver-employee." 123 T.C. 154">Id. at 193. That was because it is the employer who pays the wages and any per diem due to his or her employees.⁴³

2005 Tax Ct. Memo LEXIS 173">*258 Petitioner's assertion that the Court found in Transport Labor I that the factor relating to the source of the funds used to pay TLC's payroll obligation was a neutral factor is wrong. Contrary to petitioner's assertion, the Court found in Transport Labor I that "the method by which each trucking company client paid TLC a lease fee to compensate TLC for leasing driver-employees to such trucking company client is a neutral factor in determining whether TLC is the employer of each driver-employee." 123 T.C. 154">Id. at 192-193. That TLC may have paid TLC's payroll obligation with moneys that it received from its trucking company clients did not evidence to the Court in Transport Labor I that TLC was or was not the employer of each driver-employee. 123 T.C. 154">Id. at 192. It is common business practice for a business to use moneys received from its clients or customers as payments for services or goods in order to cover its expenses. Id. Even if, as petitioner contends, TLC required payment of the payroll period net lease fee due from each trucking company client prior to paying TLC's payroll obligation, that fact would not evidence that TLC was or was not the employer of each driver-employee.2005 Tax Ct. Memo LEXIS 173">*259 A business may require payment at the time of, or even prior to, providing services or goods to its customers. ⁴⁴

Petitioner asserts that the Court in Transport Labor I ignored that each trucking company client "determined whether and how much the drivers * * * [and] how [such] drivers would be paid. 2005 Tax Ct. Memo LEXIS 173">*260 " As we understand petitioner's assertion, petitioner contends that each trucking company client determined unilaterally without the agreement of TLC whether, how much, and how each driver-employee was to be paid. Such a contention is contrary to the findings that the Court in Transport Labor I made based upon an examination of the entire record before it.

With respect to petitioner's assertion that each trucking company client determined how much each driver-employee was to be paid, the Court found in Transport Labor I that TLC and each trucking company client agreed in the exclusive lease agreement that such trucking company client was to submit for each payroll period a batch report to TLC which showed certain information that TLC needed in order to determine, inter alia, the amount of gross wages and per diem amounts, if any, to which each driver-employee was entitled, the amount of the lease fee to which TLC was entitled, ⁴⁵2005 Tax Ct. Memo LEXIS 173">*262 and the amount that TLC had to withhold in order to pay Federal and State income taxes and employment taxes with respect to each driver- employee. Transp. Labor Contract/ Leasing, Inc. & Subs. v. Commissioner, 123 T.C. 154">123 T.C. 161. Included in the2005 Tax Ct. Memo LEXIS 173">*261 information shown in the batch report that each trucking company client submitted to TLC was the batch report lump sum amount with respect to each driver-employee whom TLC leased to such trucking company client.⁴⁶123 T.C. 154">Id. at 170. TLC and each trucking company client agreed in the exclusive lease agreement to the method by which the batch report lump sum amount was to be calculated.⁴⁷123 T.C. 154">Id. at 173 n. 28. Pursuant to sections five and fifteen of the exclusive lease agreement, in order to change that method that agreement would have had to be modified, which would have required the agreement of both TLC and the trucking company client. 123 T.C. 154">Id. at 161. In Transport Labor I, the Court did not find that the foregoing facts evidenced that each trucking company client, and not TLC, was the employer of each driver-employee.

With respect to petitioner's assertion that each trucking company client determined whether each driver-employee was to be paid, the Court in Transport Labor I was unable to find on the record presented that, once a trucking company client calculated the batch report lump2005 Tax Ct. Memo LEXIS 173">*263 sum amount with respect to each driver-employee whom it leased from TLC, such trucking company client determined whether TLC paid such driver-employee his or her net wages and any per diem amounts. The Court in Transport Labor I found that for each payroll period TLC was obligated to, and did, pay each driver-employee his or her net wages and any per diem amounts, regardless of whether the trucking company client to which TLC leased such driver-employee paid TLC the lease fee. 123 T.C. 154">Id. at 172. In Transport Labor I, the Court did not find that the foregoing facts evidenced that each trucking company client, and not TLC, was the employer of each driver- employee.

With respect to petitioner's assertion that each trucking company client determined "how drivers would be paid, i.e., by direct deposit, checks sent directly to the drivers, or checks sent to the trucking companies for distribution to drivers", petitioner relies on the following testimony of Ms. Schrupp on direct examination by petitioner's counsel:

   Q And how were the drivers paid?

   A The checks may have been sent back to the client, or they may

   have been mailed directly to the driver.

2005 Tax Ct. Memo LEXIS 173">*264    Q So they either went to the trucking company directly, or they

   went to the driver directly.

   A Correct.

   Q And who decided whether it would be directly to the driver or

   directly to the trucking company?

   A The trucking company.

Like Ms. Schrupp's testimony that TLC's involvement in hiring driver-employees was limited to an advisory role and her testimony that all of the employee benefits that TLC sponsored for the driver- employees were paid for by TLC's respective trucking company clients who leased such driver-employees from TLC, we found the above-quoted testimony of Ms. Schrupp to be questionable. Decisions as to how an employee is to be paid (e.g., by direct deposit, by check sent directly to the employee or by check sent directly to a person for whom such employee is performing services pursuant to a contract between such person and another person) are decisions generally made only by such employee. Thus, we did not understand Ms. Schrupp's testimony to mean that each trucking company client decided unilaterally how each driver-employee whom it leased from TLC was to be paid. ⁴⁸ We understood such testimony to mean2005 Tax Ct. Memo LEXIS 173">*265 that each driver-employee whom a trucking company client leased from TLC gave instructions to such trucking company client as to how such driver- employee wanted to be paid and that such trucking company client informed TLC as to what those instructions were. In Transport Labor I, the Court did not find that the above-quoted testimony of Ms. Schrupp evidenced that TLC was or was not the employer of each driver-employee.

   Work of Driver-Employee as Part of Regular Business of

   TLC

Petitioner asserts:

   The business of a trucking company is to move cargo by truck.

   TLC's business was to enter into contracts to lease personnel.

   TLC's business would be the same whether it leased truck drivers

   or some other type of personnel. By contrast, a trucking company

   cannot exist without drivers. The2005 Tax Ct. Memo LEXIS 173">*266 drivers worked from the

   trucking companies' places of business and operated the trucking

   companies' equipment.

   The Court's conclusion in this case again was contrary to

   Beech Trucking because the Court did not find that

   "clearly, the drivers' work was part of the regular business" of

   the trucking companies. Indeed, we are not aware of a single

   case in which a leased employee was found to be "part of the

   business" of a leasing company.

On the record before us, we reject petitioner's assertion.

In Transport Labor I, the Court found that each truck driver whom TLC hired as a driver-employee played an integral role in TLC's business of leasing driver-employees to its trucking company clients. Transp. Labor Contract/Leasing, Inc. & Subs. v. Commissioner, 123 T.C. 154">123 T.C. 164. TLC could not have conducted its business of leasing truck drivers without the driver-employees whom it leased to its trucking company clients. 123 T.C. 154">Id. at 194. Petitioner has not explained how TLC could have conducted its business of leasing each driver-employee without employing such driver-employee. In contrast, each trucking company2005 Tax Ct. Memo LEXIS 173">*267 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. 123 T.C. 154">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 calendar2005 Tax Ct. Memo LEXIS 173">*268 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.]

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 tax2005 Tax Ct. Memo LEXIS 173">*269 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. 123 T.C. 154">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. 123 T.C. 154">Id. at 177.

Petitioner asserts that "It was TLC's practice and intention that the trucking companies would be responsible for the Section 274(n) limitation". Regardless of what TLC's practice and intention with respect to the section 274(n)(1) limitation might have been, that practice and that intention were not made part of the exclusive2005 Tax Ct. Memo LEXIS 173">*270 lease agreement between TLC and each trucking company client. Indeed, the Court in Transport Labor I found (1) that there were no agreements between TLC and any trucking company client other than the agreement set forth in the exclusive lease agreement and (2) that the exclusive lease agreement was silent as to the section 274(n)(1) limitation. 123 T.C. 154">Id. at 159 n. 9, 171 n. 20. If there had been an agreement that each trucking company client was to be subject to the section 274(n)(1) limitation, such agreement would have been reflected in the exclusive lease agreement that TLC entered into with each trucking company client or some other written document signed by each such trucking company client. ⁴⁹

2005 Tax Ct. Memo LEXIS 173">*271 Petitioner asserts that the Court disregarded Mr. DeBerg's testimony that "the trucking companies were informed during the sales process that they would be subject to the per diem deduction limitation." Petitioner is correct that the Court did not rely on such testimony of Mr. DeBerg. That is because such testimony was uncorroborated, served the interests of his employer TLC, and was inconsistent with section fourteen of the exclusive lease agreement. ⁵⁰

2005 Tax Ct. Memo LEXIS 173">*272 Based upon our examination of the entire record before us, we find that petitioner has failed to carry its burden of demonstrating unusual circumstances or substantial error in Transport Labor I. On that record, we shall deny petitioner's motion for reconsideration.

Petitioner's Motion To Vacate

In support of petitioner's position that the Court's decision in Transport Labor I should be vacated or revised, petitioner incorporates by reference the arguments in petitioner's motion for reconsideration and advances the following additional arguments: (1) The Court's decision in Transport Labor I did not allow the parties an opportunity to submit computations under Rule 155 to show the correct amount of the respective deficiencies for the taxable years at issue; (2) the Court's decision failed to reduce the amounts subject to the section 274(n)(1) limitation pursuant to section 274(e)(3) (petitioner's section 274(e)(3) argument); and (3) the Court's decision did not reduce the respective deficiencies in petitioner's tax for the years at issue by certain amounts of tax allegedly paid by certain trucking company clients for those years (petitioner's tax duplication argument). Respondent2005 Tax Ct. Memo LEXIS 173">*273 disagrees with petitioner's position.

A motion to vacate or revise a decision pursuant to Rule 162 is granted at the Court's discretion. We have rejected petitioner's arguments in support of petitioner's motion for reconsideration. We also reject those arguments in support of petitioner's motion to vacate. Our discussion of petitioner's motion to vacate will address only the additional arguments that petitioner advances in that motion.

A motion to vacate or revise a decision pursuant to Rule 162 is usually denied in a case where the moving party attempts to reopen a case for the purpose of presenting theories or grounds, and evidence in support thereof, that could have been advanced and supported at the trial in that case. ⁵¹ See Concordia Coll. Corp. v. W. R. Grace & Co., 999 F.2d 326">999 F.2d 326, 999 F.2d 326">330 (8th Cir. 1993); Chiquita Mining Co. v. Commissioner, 148 F.2d 306">148 F.2d 306, 148 F.2d 306">310 (9th Cir. 1945), affg. a Memorandum Opinion of this Court dated Jan. 5, 1943; Standard Knitting Mills, Inc. v. Commissioner, 141 F.2d 195">141 F.2d 195, 141 F.2d 195">198-199 (6th Cir. 1944), affg. 47 B. T. A. 295 (1942). Generally, new issues may not be raised in a Rule 155 computation. Harris v. Commissioner, 99 T.C. 121">99 T.C. 121, 99 T.C. 121">123 (1992),2005 Tax Ct. Memo LEXIS 173">*274 affd. 16 F.3d 75">16 F.3d 75 (5th Cir. 1994). "Issues considered in a Rule 155 proceeding are limited to 'purely mathematically generated computational items'." 99 T.C. 121">Id. at 124.

In support of petitioner's argument that the Court should vacate its decision in Transport Labor I because the Court did not allow the parties an opportunity to submit computations under Rule 155 to show the correct amount of the deficiency for each of the taxable years at issue, petitioner asserts that the parties stipulated that a Rule 155 computation was necessary in the instant case. Petitioner further asserts:

   The Court's Rule 155 contemplates two phases of a deficiency

   case: the first phase in which the petitioner has the burden of



   proving that the Commissioner's determination is invalid; and



   the second phase for the purpose of computing the amount of the

   deficiency. A taxpayer, such as TLC, had the burden of proving

2005 Tax Ct. Memo LEXIS 173">*275    that the Commissioner's deficiency determination was invalid,

   but it did not also have the burden of showing the amount of

   tax, if any, that TLC owed. To impose such a burden on TLC, as

   respondent would have the Court do, "would not be consonant with

   the great remedial purposes of the legislation creating" the U.S. Tax Court.

   Helvering v. Taylor, 293 U.S. 507">293 U.S. 507, 293 U.S. 507">516, 79 L. Ed. 623">79 L. Ed. 623, 55 S. Ct. 287">55 S. Ct. 287

   (1935).



           *   *   *   *   *   *   *



   In many, but not all cases, evidence adequate to overthrow the



   Commissioner's findings is also adequate to show the correct

   amount that is due. Id. [Helvering v. Taylor, 293 U.S. 507">293 U.S. 507

at 515, 79 L. Ed. 623, 55 S. Ct. 287(1935)].

For cases in which evidence is not adequate to show the correct

amount due, Rule 155 permits the parties to submit computations to

the Court based on the Court's opinion. * * *

On the record before us, we reject petitioner's assertion.

Petitioner's assertion that the parties stipulated that a Rule 155 computation was necessary is wrong. The parties stipulated:

   On May 17, 1998, Petitioner filed a Corporation Application2005 Tax Ct. Memo LEXIS 173">*276 for

   Tentative Refund (" Form 1139") [petitioner's Form 1139] seeking

   tentative refunds for the tax years 1994, 1995, and 1996 of

  $ 460,999, $ 473,305, and $ 286,223, respectively. These tentative

   refund claims were based on the carryback of a $ 3,589,781

   claimed net operating loss from the tax year 1997.

   * * * Pursuant to I.R.C. section 6511(b), on or about May 27,

   1998, Respondent issued Petitioner tentative refunds for the tax

   years 1994, 1995, and 1996, of $ 460,999, $ 473,305, and $ 286,223,

   respectively, based on the Form 1139. If there is a decision on

   the per diem issue, a computation will have to take into account

   this refund for years in issue.

Tentative refunds, like the tentative refunds that respondent issued to petitioner for its taxable years 1994, 1995, and 1996 (collectively, petitioner's tentative refunds), are rebates within the meaning of section 6211(b)(2). ⁵²Baldwin v. Commissioner, 97 T.C. 704">97 T.C. 704, 97 T.C. 704">707-708 (1991). Pursuant to section 6211(a), the amount of a deficiency for a taxable year is increased by the amount of any rebates for such2005 Tax Ct. Memo LEXIS 173">*277 taxable year.

2005 Tax Ct. Memo LEXIS 173">*278 In an amendment to answer, respondent asserted increased deficiencies in tax for petitioner's taxable years 1994, 1995, and 1996 on the ground that petitioner was not entitled to petitioner's tentative refunds. The Court stated in Transp. Labor Contract/Leasing, Inc. & Subs. v. Commissioner, 123 T.C. 154">123 T.C. 155 n. 2:

   Our resolution of the issue remaining for decision will resolve



   the issues that respondent raised in the amendment to answer



   relating to the disallowance of an NOL carryback that petitioner

   claimed from its taxable year 1997.

Having held in Transport Labor I that the section 274(n)(1) limitation applied to the per diem amounts that TLC paid to its driver-employees, it was necessary, in order to calculate the correct amounts of the deficiencies for petitioner's taxable years 1994, 1995, and 1996, respectively, to add the amount of the tentative refund for each such taxable year to the amount of the deficiency that respondent had determined in the notice for each such year. Sec. 6211(a) and (b). That was the computation to which the Court understood the parties to be referring in the parties' stipulation of facts. That computation,2005 Tax Ct. Memo LEXIS 173">*279 which the Court made, was a straightforward calculation under section 6211(a) and (b). ⁵³

As for petitioner's reliance on Helvering v. Taylor, 293 U.S. 507">293 U.S. 507, 79 L. Ed. 623">79 L. Ed. 623, 55 S. Ct. 287">55 S. Ct. 287 (1935), that case is materially distinguishable from the instant case, and petitioner's reliance on it is misplaced. In 293 U.S. 507">Helvering v. Taylor, supra, the taxpayer carried its burden of proving that the determination of the Commissioner of Internal Revenue as to the amount of the taxpayer's deficiency was erroneous. However, the taxpayer did not develop a record upon which the trial court could have determined the correct amount, if any, of the deficiency. 293 U.S. 507">Id. at 511-512. Thus, it was appropriate in 293 U.S. 507">Helvering v. Taylor, supra, for the trial court to have conducted further proceedings to establish a record from which the trial court could have determined the appropriate amount, if any, of the deficiency. See2005 Tax Ct. Memo LEXIS 173">*280 Hamm v. Commissioner, 325 F.2d 934">325 F.2d at 940. In this connection, the Court of Appeals for the Ninth Circuit stated in Cohen v. Commissioner, 266 F.2d 5">266 F.2d 5, 266 F.2d 5">11 (9th Cir. 1959), remanding T.C. Memo. 1957-172:

   When the Commissioner's determination has been shown to be

   invalid, the Tax Court must redetermine the deficiency. The

   presumption as to the correctness of the Commissioner's

   determination is then out of the case. The Commissioner and not

   the taxpayer then has the burden of proving whether any

   deficiency exists and if so the amount. It is not incumbent upon

   the taxpayer under these circumstances to prove that he owed no

   tax or the amount of the tax which he did owe. [Citations and

   fn. refs. omitted.]

In contrast to 293 U.S. 507">Helvering v. Taylor, supra, in Transport Labor I petitioner did not carry its burden of proving error in respondent's determination in the notice that petitioner was subject to the section 274(n)(1) limitation with respect to the per diem amounts that TLC paid to each driver-employee. Thus, the Court's holding that TLC was subject to that section 274(n)(1)2005 Tax Ct. Memo LEXIS 173">*281 limitation resulted in the Court's sustaining respondent's determination in the notice with respect to that limitation. No further proceedings were, or are, appropriate in the instant case. See 325 F.2d 934">Hamm v. Commissioner, supra at 940.

With respect to petitioner's section 274(e)(3) argument, petitioner asserts:

   The computation of the allowable deduction for food and beverage

   expenses is complex, but there is no dispute about the

   applicable law. Section 274(a) completely disallows deductions

   for certain expenses. Section 274(n) ameliorates the total

   disallowance of 274(a) by allowing a 50 percent deduction for

   food and beverage expenses. Section 274(e)(3) in turn provides

   that "the employer" is not subject to the limitations of Section

  274, where the employee incurs the expense in the course of

   performing services for another person, such as here where the

   truck drivers incur expenses while performing services for the

   trucking companies. * * * The Section 274(e)(3) exception

   applies only where taxpayer "accounts" for the expenses, as

   required by Section 274(d). * * *

2005 Tax Ct. Memo LEXIS 173">*282 Petitioner further asserts that uncontradicted evidence demonstrated that TLC accounted to the trucking company clients for the per diem amounts that it paid to its driver-employees. On the record before us, we reject petitioner's assertion.

Petitioner first raised petitioner's section 274(e)(3) argument in its amended petition. However, petitioner did not argue, or even mention, petitioner's section 274(e)(3) argument in its trial memorandum, at trial, or on brief. Consequently, we concluded that petitioner had abandoned that argument. See Nicklaus v. Comm'r, 117 T.C. 117">117 T.C. 117, 117 T.C. 117">120 n. 4 (2001); Rybak v. Commissioner, 91 T.C. 524">91 T.C. 524, 91 T.C. 524">566 n. 19 (1988). It was only after the Court ruled against petitioner in Transport Labor I that petitioner decided to resurrect petitioner's section 274(e)(3) argument in petitioner's motion to vacate. By doing so, petitioner is trying to advance in the context of a Rule 155 computation theories or grounds with respect to a position which it abandoned before the trial in this case and with respect to which petitioner wants the Court to hold a second trial at which petitioner would introduce new evidence in support of that position.

2005 Tax Ct. Memo LEXIS 173">*283 With respect to petitioner's tax duplication argument, petitioner asserts:

   As a result of the Court's Opinion in this case and without a

  Rule 155 proceeding, respondent will be in a windfall position

   -- it will have collected tax on the same transaction twice.

   Congress has explicitly recognized that only one taxpayer should

   be subject to the tax. H. Rept. 1447, 87th Cong., 2d Sess.

   (1962), 1962-3 C.B. 405, 429; see also Treas. Reg. section

   1.274-2(f)(2)(iv)(a). Respondent's computations in the Notices

   of Deficiency fail to take that double payment of tax into

   account.

   At the time of the audit of TLC's returns for the years at

   issue, the examining agent also was reviewing information

   related to TLC's customers to determine whether the customers

   had applied the deduction limitation. The agent informed TLC

   during the examination that a significant number of TLC's

   customers applied the Section 274(n) deduction

   limitation. ⁵⁴

   Accordingly, the actions and return positions of the other

   trucking companies must be reviewed2005 Tax Ct. Memo LEXIS 173">*284 to determine whether the

   deficiencies computed by respondent are correct. We respectfully

   request, therefore, that the Court vacate its Order [sic] of

   August 16 and order the parties to submit computations pursuant

   to Rule 155. This will permit the parties the opportunity to

   determine whether TLC's liability should be reduced by the

   amounts already paid by parties to the transaction.

On the record before us, we reject petitioner's assertion.

Petitioner did not advance petitioner's tax duplication2005 Tax Ct. Memo LEXIS 173">*285 argument in its petition, in its trial memorandum, at trial, or on brief. It was only after the Court ruled against petitioner in Transport Labor I that petitioner decided to advance petitioner's tax duplication argument in petitioner's motion to vacate. By doing so, petitioner is trying to advance in the context of a Rule 155 computation a new argument that it is raising for the first time in petitioner's motion to vacate. ⁵⁵ Generally, new issues may not be raised in a Rule 155 computation. Harris v. Commissioner, 99 T.C. 121">99 T.C. 123.

2005 Tax Ct. Memo LEXIS 173">*286 Based upon our examination of the entire record before us, we reject petitioner's argument that the parties stipulated that a computation under Rule 155 is necessary in order to determine the effect on the respective deficiencies for the years at issue of the tentative refunds that respondent erroneously issued to petitioner for such years. Based on that examination, we further find that petitioner's motion to vacate advances theories or grounds with respect to positions which petitioner raised for the first time in petitioner's motion to vacate or which petitioner abandoned before the trial in this case and with respect to which petitioner wants the Court to hold a second trial at which petitioner would introduce new evidence in support of those positions.

For the foregoing reasons and the reasons discussed above in connection with the Court's denial of petitioner's motion for reconsideration, we shall deny petitioner's motion to vacate.

We have considered all of the contentions and arguments of petitioner and respondent that are not discussed herein, and we find them to be without merit, irrelevant, and/or moot.

To reflect the foregoing,

An order will be issued denying petitioner's2005 Tax Ct. Memo LEXIS 173">*287 motion for reconsideration and petitioner's motion to vacate.