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Compensation on a commission basis is entirely consistent
with an employer-employee relationship. Texas Carbonate Co. v.
Phinney, 307 F.2d 289, 292 (5th Cir. 1962); Capital Life & Health
Ins. Co. v. Bowers, 186 F.2d 943 (4th Cir. 1951).
While petitioner could conceivably have suffered some loss
as a result of her sales activities, she may still be an employee
under the common law test if her risk of loss was negligible.
Lewis v. Commissioner, supra; Radovich v. Commissioner, T.C.
Memo. 1954-220.
Petitioner did not purchase or own the products she sold.
Given her guaranteed base salaries from her employers,
petitioner's risk of loss from her sales activities was
negligible at best.
D. Permanency of Relationship
There is no information in the record with respect to this
factor.
E. Principal's Right To Discharge
There is no information in the record with respect to this
factor as it pertains to Peerless; however, petitioner was
subject to a 90-day probationary period at the beginning of her
employment with the company. Petitioner's employment with Big
Train, however, was terminated by Big Train in August 2000. This
is consistent with employee status.
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Last modified: May 25, 2011