Nancy L. and Gerald L. Harper - Page 11




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          advance recovery and chargeback recovery balances, a check was              
          not issued to the agent.”                                                   
               Based on the foregoing, and under the relevant tax law, Mrs.           
          Harper would have had cancellation of indebtedness income at the            
          time that monthly premiums were reclassified as earned income               
          and/or any preexisting deficiency in her commission account was             
          offset.  See Diers v. Commissioner, supra; Cox v. Commissioner,             
          T.C. Memo. 1996-241; cf. Warden v. Commissioner, T.C. Memo. 1988-           
          165.  Therefore, the Court holds that petitioners received                  
          commission income in the amount of $1,125.93 in 2003.                       
               Petitioners also contest inclusion of the amounts listed on            
          the Form 1099 at issue on the grounds that Mrs. Harper had                  
          stopped selling policies for Primerica sometime in the fall of              
          2002, and, accordingly, she could not have made any sales from              
          which commissions could be generated in 2003.  Petitioners                  
          testified that despite their repeated requests to Primerica                 
          regarding the exact circumstances by which the figures reflected            
          in the 2003 monthly statements were derived, they had not been              
          able to ascertain the exact nature of these amounts.                        
               Based on the entire record before us, we are not convinced             
          either that Mrs. Harper ended her affiliation with Primerica in             
          November of 2002, or that (assuming that she did not actually               
          sell any policies in 2003) Primerica did not account for policies           
          that she sold in 2002 on its 2003 monthly reports.  First, Mrs.             







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