- 21 -
termination. Finally, the payments are recouped from
the individual's successor. In sum, the benefits are
in the nature of a buy-out in which the departing agent
receives payments based on what he leaves behind in the
way of business for his successor. If the departing
agent goes into competition with his successor, he is
destroying the resource that would be used to pay him.
See also Petr v. Nationwide Mutual Ins. Co., 712 F.Supp. 504, 506
(D. Md. 1989); Wolcott v. Nationwide Mutual Ins. Co., 664 F.Supp.
1533, 1538 (S.D. Ohio 1987), affd. in part, revd. in part 884
F.2d 245 (6th Cir. 1989).
Finally, in Milligan v. Commissioner, 38 F.3d 1094, 1098 n.6
(9th Cir. 1994), which is identical to the instant case in all
material respects, the Court of Appeals observed: "Payments
derived from the cessation of Milligan's business are not subject
to self-employment tax. * * * Nor does the self-employment tax
apply to payments derived from noncompetition with State Farm."
BEGHE and DAWSON, JJ., agree with this concurring opinion.
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