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indicating the amount the employee paid for health insurance and
out-of-pocket medical expenses during the year. AgriPlan/BizPlan
would then process the transmittal form and issue a statement to
the employer stating the amount the employer should reimburse the
eligible employee.
On January 1, 1999, Mrs. Stephens entered into an employment
agreement with Mr. Stephens. Mrs. Stephens agreed to do
bookkeeping for the businesses, run errands, prepare meals for
the staff, answer phones, and do general field work and customary
duties. The employment agreement specified that Mrs. Stephens
would be paid $2,000 annually and be an eligible enrollee under
the AgriPlan/BizPlan.
In 2001, Mrs. Stephens worked 1,172 hours for the harvesting
business and the farm and was issued a Form W-2, Wage and Tax
Statement (Form W-2). Thereafter, she submitted an employee
benefit expense transmittal form to AgriPlan/BizPlan claiming
that, in 2001, she had paid $8,650 for medical expenses. Of this
total, $4,978 was attributable to the health insurance premiums
relating to the Blue Cross/Blue Shield plan, and $3,672 was
attributable to out-of-pocket medical expenses. These expenses
were paid out of petitioners’ joint bank account, and petitioners
were not reimbursed. On the Schedule F, Profit or Loss from
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Last modified: March 27, 2008