- 3 - married and resided together at all times during the years at issue. Petitioner was employed as an independent insurance agent (agent) with American Life from 1987 to 1988 and again from 1989 to 1998.3 As an agent for American Life, petitioner sold insurance policies. For each policy he sold, petitioner earned a commission. American Life would advance to petitioner the anticipated first-year commission on that policy. This advancement was referred to as a loan against anticipated first-year commissions and not taxable at the time of receipt. In the event the policy was terminated before the year ended, petitioner was obligated to pay the commission back to American Life. Additionally, American Life paid certain expenses for petitioner that were added to petitioner’s outstanding account balances due to American Life.4 According to account ledgers produced by respondent from American Life, during the term of petitioner’s employment, petitioner received advances against 3There is a dispute as to whether petitioner terminated his employment in 1997 or 1998. Petitioner contends that he was no longer employed by American Life in 1997; however, he stipulated to working for American Life until 1998. This discrepancy has no bearing on the issue. 4At the time of the audit, Ms. Garza went through the documents provided by American Life, which set out the advances and expenses paid by American Life on petitioner’s behalf. Ms. Garza contacted American Life requesting an explanation of the expenses on the account. Petitioners presented no evidence at trial with respect to these expenses.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011