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common law test if his risk of loss was negligible. Lewis v.
Commissioner, T.C. Memo. 1993-635; Radovich v. Commissioner, T.C.
Memo. 1954-220. Moreover, the risk that he would not receive any
commissions because of low sales performance is common to both
employees and statutory employees.
Other than his computer, fax machine, cellular phone, and
business expenses that exceeded his annual reimbursement
allocation, petitioner did not have any capital investments or
bona fide liability for expenses (such as salary payments to
unrelated employees) in his sales activities such that he would
be subject to a real risk of economic loss.
This factor supports a finding that petitioner was an
employee of Manulife.
4. Permanency of Relationship
Since becoming a licensed life insurance salesman in 1986,
petitioner has worked for Manulife from 1986 to June 1990 and
again from June 1993 to at least the date of trial. Moreover,
under the agreement, petitioner was hired to work for an
indefinite period of time.
This factor supports a finding that petitioner was an
employee of Manulife.
5. Principal’s Right To Discharge
The relationship between petitioner and Manulife was
terminable at the will of either party without any further
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