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Dacey v. Commissioner, T.C. Memo. 1992-187; Rev. Rul. 68-498,
1968-2 C.B. 377.
The issue of whether an independent insurance agent's
"extended earnings" are subject to self-employment tax was most
recently addressed by this Court in Koszewa v. Commissioner, T.C.
Memo. 1994-458. In Koszewa, the taxpayer signed the same "Career
Agent's Agreement" with the same Companies as petitioner. In
Koszewa, we concluded that there was a sufficient nexus between
the extended earnings payments received by the taxpayer and the
trade or business activity in which he was engaged while
associated with the Companies. Thus, the extended earnings
received by the taxpayer in Koszewa were subject to the self-
employment tax.
Applying the Newberry nexus standard and the reasoning used
in Koszewa to petitioner, we conclude that the extended earnings
payments received by him during 1989, 1990, and 1991 related to
the trade or business activity in which he was engaged while
associated with the Companies. First, to qualify for such
payments, petitioner had to be associated with the Companies for
a certain number of years, have a certain number of policies in
place at the time of termination, and refrain from direct compe-
tition with the Companies. All of those requirements relate to
petitioner's original business with the Companies. Second, the
amount of such payments was calculated by reference to the
renewal commissions that petitioner earned in his final months
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