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As I mentioned in our telephone conversation, Michael
handled workshops and attended many outside meetings and
seminars representing The Corben Institute. The biggest
part of life insurance sales is getting in front of people
who need life insurance or people who can recommend to
others to buy life insurance from us, Michael was a large
part of our success.
Michael was paid $5,000 a month, which was based on our life
insurance sales. We are in the Life Insurance business, all
of our income comes from commissions. Everyone in the
office was asked to do other jobs from time to time but
everyone knew we live and die based on commissions from life
insurance sales.
It is quite evident, therefore, that petitioner’s work with
Corben was not devoted to one insurance company, and, moreover,
petitioner was required to perform other duties for Corben beyond
selling insurance. Additionally, the statement establishes that
petitioner was not considered an employee by Corben.
Petitioner’s earnings from Corben were reflected on Forms 1099,
which indicate that petitioner was considered to be self-employed
and not an employee. The Court holds, therefore, that petitioner
was not an employee of Corben, nor was he a statutory employee.3
Petitioner was engaged in a self-employment activity, and, as
such, his net earnings from that activity were subject to self-
employment tax. Respondent, therefore, is sustained in
3The Court notes, however, that there are certain facets of
petitioner’s relationship with Corben that would indicate an
employer-employee relationship, such as the fact that petitioner
was paid $5,000 per month rather than commissions, and that
Corben had some control over petitioner, such as his required
participation in seminars and marketing promotions. The Court
does not consider these factors as overriding.
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Last modified: May 25, 2011