Eberl's Claim Service, Inc. - Page 5




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          companies' in-house claims adjusters performed about 70 percent             
          of all claims adjusting in 1993 and more than half in 1994.                 
               Petitioner contracted with independent claims adjusters to             
          work as needed from time to time.  Petitioner contracted with 192           
          claims adjusters in calendar year 1992, 170 in 1993, and 199 in             
          1994.  Catastrophic claims adjusters travel extensively and are             
          frequently away from home for long periods of time.  Adjusters              
          could decline calls to work for petitioner if they so chose.                
               Petitioner contracted with individuals and insurance                   
          companies which were located throughout the United States.  Once            
          petitioner was hired, it was required to have claims adjusters at           
          the site of the catastrophe immediately after it occurred.                  
               Independent claims adjusting companies typically paid their            
          claims adjusters 60-65 percent of the fee they received from the            
          insurance company for each claim adjusted.  In contrast,                    
          petitioner paid its claims adjusters 70 percent of the fee it               
          received for each claim adjusted.  This helped petitioner obtain            
          and keep the services of high-quality claims adjusters.                     
               Petitioner issued to its independent claims adjusters Forms            
          1099 totaling $15,589,041 for fiscal year 1992 and $6,510,745 for           
          fiscal year 1993.  Petitioner paid 76.2 percent of its gross                
          receipts to claims adjusters in fiscal year 1992 and 71 percent             
          in fiscal year 1993.                                                        
               Petitioner's supervisors coordinated the adjusting                     
          activities at each work site and were liaisons between petitioner           




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