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rather than the mere fact that the taxpayer worked or works for
the payor. Jackson v. Commissioner, 108 T.C. 130 (1997).
Petitioners argue that, even though the payments received by
petitioner after the termination of his employment as an
independent agent for Conseco were renewal commission payments,
such payments are exempted from self-employment tax pursuant to
section 1402(k).
Section 1402(k) provides:
(k) Codification of treatment of certain termination
payments received by former insurance salesmen.--Nothing in
subsection (a) shall be construed as including in the net
earnings from self-employment of an individual any amount
received during the taxable year from an insurance company
on account of services performed by such individual as an
insurance salesman for such company if--
(1) such amount is received after termination of
such individual’s agreement to perform such services
for such company,
(2) such individual performs no services for such
company after such termination and before the close of
such taxable year,
(3) such individual enters into a covenant not to
compete against such company which applies to at least
the 1-year period beginning on the date of such
termination, and
(4) the amount of such payment--
(A) depends primarily on policies sold by or
credited to the account of such individual during
the last year of such agreement or the extent to
which such policies remain in force for some
period after such termination, or both, and
(B) does not depend to any extent on length
of service or overall earnings from services
performed for such company (without regard to
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