Originally posted by Zee
View Post
In 1979, Frank Leamy was an airline pilot and his wife, Charlotte was a school teacher . In 1977, the couple purchased a travel agency. As a corporate policy, the agency allowed for reimbursement of some employee expenses including some of those incurred on "familiarization" trips to vacation destinations. Almost every agent took at least one such trip annually. Together and individually, Frank and Charlotte made several "familiarization" trips after purchasing the agency and claimed business expense deductions. They treated themselves as commissioned sales agents.
>>Frank testified that during the years at issue, the agency (Vacations Unlimited, or VU) had actual gross sales of about 1.4 to 1.6 million dollars. VU had two different kinds of employees, salaried employees and commissioned employees. Salaried employees were paid a regular salary. During the years at issue, VU had from three to eight salaried employees. Commissioned employees negotiated their compensation with VU. Commissions negotiated ranged from 40 to 60 percent of the income they generated for VU.<<
Comment