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paid him commissions on his sales. In August 1994, Key resumed
paying petitioner a salary. During 1994, Key paid petitioner
$17,468.12 of wages and $15,540 of commissions. Key issued to
petitioner a taxable income report that included all of the wage
income, but failed to disclose the commission income. Petitioner
reported on his 1994 tax return all of the wage income but failed
to report the commission income. During 1994, petitioner and
respondent entered into an agreement that concerned a previous
year. Petitioner explains that he mistakenly believed that taxes
on the commission income were resolved by that agreement.
Prior to 1981, petitioner worked for Pay n' Save Corp., a
company engaged in retail businesses. During his employment with
Pay n' Save, petitioner contributed to Pay n' Save's pension
plan. On February 12, 1981, petitioner discontinued his
employment with Pay n' Save, but left his pension contributions
in the plan. Pay n' Save subsequently discontinued its
businesses and was liquidated. Sometime during 1993, petitioner
received notification from the Superior Court for Los Angeles
County, California, that Executive Life, the underwriter of the
Pay n' Save retirement plan, was being liquidated. This
notification provided petitioner with an opportunity to opt out
early and take a lump-sum settlement. Petitioner chose this
option, rather than awaiting the ultimate resolution of Executive
Life's affairs, and during 1994 petitioner received a
distribution in the amount of $5,126.
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