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that “Mr. Schelble’s payments are tied to the quantity and
quality of his prior services performed for the Companies.” Id.
at 1393.
The Court of Appeals in Schelble also distinguished Gump v.
Commissioner, supra. Id. The “extended earnings” payments in
Gump were calculated in the same way as the termination payments
in Milligan and differently from the “extended earnings” in
Schelble. The Court of Appeals for the Tenth Circuit rejected
the taxpayer’s suggestion that the label attached to the payments
has any tax significance.
However, the payment scheme in Gump is nearly identical
to that in Milligan and distinguishable from Mr.
Schelble’s payment scheme. For the same reasons we
reject Milligan, we also find Gump does not apply [to]
Mr. Schelble’s case. [Schelble v. Commissioner, supra
at 1393-1394.]
In Jackson v. Commissioner, 108 T.C. 130 (1997), the Tax
Court, in a reviewed opinion, followed Milligan in a case that
would not have been appealable to the Court of Appeals for the
Ninth Circuit. Like Milligan, Jackson involved termination
payments to a State Farm agent under a contract providing for a
2-year qualification period, payments based on a fixed percentage
of the final-year’s compensation without regard to the length of
service, and a reduction for commission chargebacks on policies
canceled after termination. Following Milligan, this Court held
that the termination payments were not subject to self-employment
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