- 9 - Method of Accounting Petitioner computed taxable income resulting from his engagement by IMA under the cash receipts and disbursements method of accounting. Petitioner’s Payments On occasion, when called upon to do so by IMA, petitioner repaid to IMA a portion of the amounts advanced to petitioner under the agreement. Termination of Petitioner’s Engagement by IMA Petitioner’s engagement by IMA was terminated by letters from IMA dated March 31 and May 1, 1995 (the March 31 and May 1 letters, respectively). Among other things, the March 31 letter reminded petitioner of his responsibility for any balance on his agent statement. In pertinent part, the May 1 letter states: As of your last statement(s) produced, summaries of which are attached, your account is shown to have an advanced debit balance in the amount of $521,628.69, upon which the company has a first lien and security interest. Pursuant to your Contract [the agreement], this indebtedness is due in full upon demand by IMA. However, demand will not be made until this indebtedness exceeds the amount of your projected earned commissions for the next six (6) months, as determined solely by IMA. Your debit account will increase by assessment of uncollected charge backs, applicable lapses, and debit balance interest charges and/or any other IMA related debts incurred during that period of time. Your debit balance will be reduced by your total earnings for the next six (6) months (or longer for your contract’s vesting term, if applicable). However, if you would like to avoid any additional interest charges, we will accept payment in full at this time. Please send your check to the address shown on this letterhead, to the attention of: Agent Accounting.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
Last modified: May 25, 2011