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(3) Whether petitioners are liable for the addition to tax
and accuracy-related penalties as determined by respondent. We
find that they are not liable for the accuracy-related penalties
but are liable for the addition to tax to the extent discussed
below.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found. We
incorporate by this reference the stipulation of facts, first
supplemental stipulation of facts, and attached exhibits. At the
time of filing the petition, petitioners resided in Minot, North
Dakota.
During the years in issue, petitioner was a district manager
for Combined Insurance Co. of America (Combined). Petitioner’s
primary duties as district manager were to recruit, hire, train,
and supervise insurance agents who sold accident and health
insurance in North Dakota. In addition, petitioner himself sold
accident and health insurance for Combined in North Dakota. He
was compensated by Combined in three ways: (1) Override
commissions, based on sales and renewals of policies made by the
insurance agents he supervised; (2) bonuses; and (3) sales
2(...continued)
an independent contractor, then petitioners are liable for self-
employment tax, and petitioners must include in income
contributions to pension and profit-sharing plans, insurance
premiums, and health care costs. As will be discussed below, we
need not decide these issues because we find that petitioners
have conceded them.
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