- 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