- 2 -
the year in issue, and all Rule references are to the Tax Court
Rules of Practice and Procedure.
Respondent determined a deficiency in petitioners’ Federal
income tax for the year 2003 of $421. The issues for decision
are whether petitioners failed to report nonemployee compensation
of $1,125 on their 2003 Federal income tax return, whether
petitioners are liable for self-employment tax on that amount,
and whether petitioners are entitled to a corresponding deduction
for one-half of the self-employment tax to be paid.
Background
The stipulation of facts and the attached exhibits are
incorporated herein by reference. At the time the petition was
filed, petitioners resided in Paola, Kansas.
Petitioner wife (Mrs. Harper) worked as an independent
insurance agent selling life and mortgage refinancing insurance
policies with Primerica Financial Services, Inc. (Primerica) from
February 25, 2002, through July 18, 2003. Until her affiliation
with Primerica, Mrs. Harper had no prior experience as an
insurance agent.
During the course of its affiliation with Mrs. Harper,
Primerica paid her cash in two forms. First, upon receipt of an
application for insurance, Primerica would advance Mrs. Harper a
portion of the commissions that were expected to become earned,
assuming that a policy would be issued and remain in force for 1
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: November 10, 2007