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commission to the bill. The mailer pays the list broker the full
price reflected on the bill that the mailer receives. The list
broker deducts its commission and remits the remaining payment to
the list manager. If the list manager acts as the list broker in
the transaction, the bill sent to the mailer includes the full
base price (including the list brokerage commission), plus any
special selection, media, and shipping fees, and the mailer
remits the full payment directly to the list manager.
After receiving payment from the mailer or its list broker,
the list manager deducts its commission, pays Triplex its fees,
and remits the remainder to CMS. CMS deducts its commission and
remits the remainder to petitioner as part of a monthly
accounting for all the list rental transactions of the past
month. Before August 1993, if a mailer canceled its order, it
was required to pay a "processing fee" of $50. The fee was
retained by Names.
List rental transactions are carried on continuously.
During 1991, 1992, and 1993, petitioner's gross receipts (base
price less commissions, Triplex running fees, and other
miscellaneous fees) from its list rental transactions were
$191,415, $161,273, and $192,185, respectively. For each of the
years in issue petitioner timely filed Form 990, Return of
Organization Exempt from Income Tax, on which it reported the
income it received from its rental list transactions as
nontaxable royalty income. Petitioner also timely filed Form
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Last modified: May 25, 2011