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petitioner's payments herein and the payments at issue in
Milligan.
The Court of Appeals in Milligan v. Commissioner, supra at
1098, found that "To be taxable as self-employment income,
earnings must be tied to the quantity or quality of the
taxpayer's prior labor, rather than the mere fact that the
taxpayer worked or works for the payor." Here, both the quantity
and quality of petitioner's labor directly affected the amount of
his extended earnings payments.
Unlike the termination payments to the taxpayer in Milligan,
petitioner's extended earnings were based in part on how long he
had been in service for the Companies. The percentage of
petitioner's renewal service fees which would be paid to him as
"extended earnings" was determined by how many years he had
served as an agent to the Companies. To qualify for the lowest
percentage of "extended earnings" petitioner had to have repre-
sented the Companies for at least 5 years. Additionally, peti-
tioner had to have 400 or more American Family mutual casualty
fire and health policies in force and at least 50 American
Standard policies in force at the time the Agreement was
terminated in order to qualify for extended earnings. Thus, the
extended earning payments received by petitioner were tied to the
quantity, quality, and duration of his prior labor.
Another distinction is that the termination payments in
Milligan v. Commisisoner, supra at 1099:
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