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basis. On a semiannual basis, August 15 and February 15, any
commissions exceeding the draw, less items bought from TAG, see
table infra p. 11, were paid to the sales representative. In the
rare situation when a sales representative had not earned any
commissions, and thus would not have any commissions in reserve,
that sales representative ordinarily would not receive a
semimonthly draw.
TAG issued to Hathaway Forms W-2 showing compensation paid
in the amounts of $102,837.28 and $129,283.50 for 1989 and 1990,
respectively. TAG withheld Federal income taxes and Social
Security (F.I.C.A.) taxes from these amounts. TAG also issued to
Hathaway Forms 1099 showing noncash items provided by TAG in the
amounts of $23,277.56 and $19,219.11 for 1989 and 1990,
respectively. See table infra p. 11.
Hathaway participated in TAG’s pension plan and TAG provided
to Hathaway long-term disability insurance and life insurance,
all fully funded by TAG. TAG also funded two-thirds of his
medical insurance benefits.
Expenses
During the years in issue, Hathaway and TAG’s other sales
representatives were responsible for paying their own expenses
for traveling, lodging, telephone, and food. However, TAG paid
part of Hathaway’s moving expenses in 1969 when he relocated to
Iowa. See supra note 3. TAG, TAG sales representatives, and
retail distributors of TAG merchandise shared the expense of
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