- 3 -
The partnership agreement provided that, from October 13 through
December 31, 1993, each partner would be entitled to 100 percent
of the income attributable to business that partner generated.
The partners agreed that, beginning January 1, 1994, each partner
who originated new business would receive an origination fee of
10 percent of the billing from that business. The remainder of
the profits and losses was to be split equally.
Disagreement arose between petitioner and Mr. Cohen shortly
after formation of the partnership. During December 1995, the
partnership agreement was terminated. As a result of
representations made by Mr. Cohen during January 1996, the
parties agreed to conduct the partnership under a new oral
agreement (the new agreement). Pursuant to the new agreement,
the partnership’s income was allocated as follows: (1) A
guaranteed payment of 10 percent of the gross profits from the
tax return preparation business would be paid to the originating
partner; (2) 100 percent of the gross profits from legal services
attributable to each originating partner was allocated to that
partner; (3) the remaining net profits were allocated equally to
each partner; and (4) with respect to work referred from one
partner to the other, a referral fee of 33 percent of gross
profits from the referred work would be paid to the referring
partner. The new agreement was effective from January 1, 1996,
through December 31, 1998. Petitioner prepared and filed the
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