Nancy L. and Gerald L. Harper - Page 5




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                               Tax Reporting Summary                                  
                                             Year to Date                             
                    Personal sales           $990.85                                  
                    Base shop override            122.28                              
                    ICA/Escrow contribution      (95.94)                              
                    ICA/Escrow used/released       95.98                              
                    Gross earned commissions     1113.17                              
                    Imputed interest               12.76                              
                    Total reportable income    1125.93                                
                             Accounting Activity Summary                              
                    Advance recovery balance     (723.89)                             
                    Chargeback recovery                                               
               balance                       (334.88)                                 
               `    Business expenses             (55.00)                             
                    Other adjustments             (95.98)                             
          Intercompany recovery         158.70                                        
                    Previous earns owed           (62.12)                             
                    Total               (1,113.17)                                    
               Primerica issued two Forms 1099-MISC to Mrs. Harper for the            
          taxable year 2003; the first reflecting nonemployee compensation            
          in the amount of $1,125.93 ($1,113.17 in Gross Earned Commissions           
          and $12.76 in Imputed Interest) and the second, reflecting                  
          nonemployee compensation in the amount of $158.70 (Intercompany             
          Recovery).  Although respondent has not raised the latter amount,           
          $158.70, as an issue in this case, as detailed above, this amount           
          was applied to Mrs. Harper’s outstanding commission account                 
          balance.                                                                    
               Petitioners did not report either amount reflected on the              
          aforementioned Forms 1099-MISC on their 2003 income tax return.             
          Mrs. Harper did, however, attach a letter to petitioners’ 2003              
          return in which she contested the inclusion of these amounts in             






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Last modified: November 10, 2007