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licensed insurance agency in Michigan. Woodcliff is an S
corporation whose sole shareholder and director was petitioner
Helen L. Petty. Woodcliff's sole income was the commissions
received from the sale of credit insurance under Classic's group
policy. Woodcliff's sole expenses were for accounting fees.
Woodcliff did not have any employees.
American Way paid a commission on each premium collected by
Berger to the Corsa Agency, Inc. (Corsa), a duly licensed
insurance agency in Michigan. Corsa is a subchapter S
corporation whose shareholders were R. Dale Berger, Sr., and Lynn
Berger, each of whom held 50 percent of the stock. R. Dale
Berger Sr. is Matt Berger's grandfather. Lynn Berger is Matt
Berger's wife. Matt Berger held 16 percent of the stock of
Berger. The remaining 84 percent was held by R. Dale Berger, Jr.
The stipulation of the parties does not disclose the relationship
between Matt Berger and R. Dale Berger, Jr. Corsa received
$510,163 from the sale of credit insurance under Berger's group
policy. Corsa's sole income was the commissions received from
the sale of credit insurance under Berger's group policy.
Corsa's sole expenses were taxes, professional fees, and
administrative fees which totaled less than 10 percent of Corsa's
gross income. Corsa did not have any employees. Woodcliff and
Corsa are referred to as "dealer-related agencies" by the State
of Michigan Financial Institutions Bureau because such agencies
are established for the purpose of selling credit insurance to a
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