- 2 -
petitioner Verl W. Haderlie applied for an insurance policy, paid
the $40,653 premium, and $40,653 was returned to him by the
procuring insurance agent. The insurance agent promoted the
transaction because he received about 118 percent of $40,653 from
the insurance company as an inducement to sell its policies.
Respondent determined that the above-described circumstances
resulted in income to petitioners measured by the cost of the
insurance coverage or the $40,653 premium.
We first addressed this type of scheme or transaction in
Wentz v. Commissioner, 105 T.C. 1 (1995), and held that the
taxpayer/insured realized income in the amount of the insurance
premium kickbacks from the insurance agent. Petitioners here
argue that the circumstances of their case vary from Wentz v.
Commissioner, supra, in a manner that would change the outcome.
FINDINGS OF FACT
Petitioners had their legal residence in Idaho Falls, Idaho,
at the time their petition was filed. Verl W. Haderlie
(petitioner) is a high school graduate and has been involved in
the business of hauling milk by truck. During 1991, petitioner
was involved in the technical aspects of the process of producing
milk, including the identification and cure of bacterial
problems. From this activity and a small farming operation,
petitioner earned somewhat less than $50,000 for the 1991 taxable
year.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 Next
Last modified: May 25, 2011