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future commissions and had certain expenses paid for by American
Life that amounted to almost $90,000. When asked at trial
whether he kept books or records to keep track of the advances
made, expenses paid, and the commissions earned, petitioner
stated that he may have kept records but did not know where they
were at the time.
When petitioner left American Life in 1998, his accounts
were terminated fully vested. The term “fully vested” meant that
petitioner would continue earning commissions on all policy
renewals in his accounts even if he was no longer working for
American Life. During 1999, 2000, and 2001, several of
petitioner’s former accounts with American Life were renewed.
Petitioner was entitled to commissions on these renewals.
Additionally, during 1999, 2000, and 2001, petitioner was
entitled to commissions from renewals on policies written by
agents who were subordinate to petitioner while he was employed
by American Life.
During the years at issue, all commissions coming to and
creditable to petitioner were applied to the liquidation of
petitioner’s outstanding account balances owed to American Life.
American Life credited to petitioner’s accounts $20,9575 of such
5These amounts are rounded to the whole dollar.
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