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payments will constitute income to the recipient. Moorman v.
Commissioner, 26 T.C. 666, 674 (1956). These payments are
nothing more than disguised salary. Beaver v. Commissioner, 55
T.C. 85, 90 (1970). In the situation where the advances are
actually loans, when the repayments are offset directly by the
future earned commissions, then the recipient will have either
commission income or cancellation of indebtedness income at the
time of such offsets. Cox v. Commissioner, T.C. Memo. 1996-241;
cf. Warden v. Commissioner, T.C. Memo. 1988-165.
The advance insurance sales commissions here were received
during the 1988, 1989, 1990, and 1991 tax years. At the time
petitioner's contract with American was terminated, petitioner
had a debit balance in his advance commissions account of
approximately $156,000. This balance had been paid by the time
of trial in this case. Petitioner testified that he never
defaulted on repayments of the advance commissions, so there was
never any need for demand to be made. Although demand was not
made, under the contract and note, had petitioner defaulted,
American had the right to demand payment under the contract and
loan agreement. Thus, petitioner was personally liable on the
loans. This is the distinguishing feature between this case and
other advance commission cases, where no personal liability
existed in the event of a termination. Beaver v. Commissioner,
55 T.C. 85 (1970); Moorman v. Commissioner, supra; George Blood
Enterprises, Inc. v. Commissioner, T.C. Memo. 1976-102. In
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