Many individuals continue to work into their retirement years, whether due to financial need, personal desire or some other motivation. A meaningful portion of these workers are high-wage earners who pay tax at the maximum or near maximum income tax rates and do not wish to withdraw funds from their retirement accounts which in most cases are fully taxed at ordinary income tax rates.
The Fall edition of this Legally Speaking column reported on the verdict delivered in the summer of 2023 in favor of an ERA rep given the pseudonym Rigorous Electronics Performers, LLC or REP. A suburban Philadelphia jury found that Manipulating Financial Results, Inc. or MFR (also a pseudonym) owed REP over $600,000 in unpaid commissions.
The 2017 Tax Act introduced a new deduction for pass-through entities. Owners of S corporations, sole proprietorships, partnerships and limited liability companies treated as sole proprietorships are entitled to an income tax deduction of up to 20 percent of their qualified business income (“QBI”) on their personal income tax returns.
Just a few months ago, on the fifth floor of the courthouse in a sleepy Philadelphia suburb, an international manufacturing conglomerate squared off for 3½ days against a local sales rep. The battle was over commissions due under the terms of their contract, plus statutory damages. In a first for this counsel (and the seasoned trial judge), a single-sex jury was selected: eight women who, for reasons explained below, would later form a chat group known as the “Windfall Gals.”
Suppose you were asked to design the most taxpayer-friendly retirement plan possible. If given a choice, you would want a plan that allows for generous annual contributions. The contributions would be tax-deductible, regardless of whether or not you itemize deductions and regardless of your earnings or taxable income.
California’s sales rep protection statute, among the nation’s strongest, mandates an award of treble damages to a rep who does not receive commissions as provided in the contract.
“They will be surprised to learn that, under the default rule the Court adopts today, an at-will salesperson is entitled to commissions for any sale – here, perhaps hundreds of thousands of sales – a jury determines the salesperson ‘set in motion.’ And they will be stunned to learn that, under the default rule, the entitlement to commissions may extend years after their employment relationship ended.”
Some sales rep cases turn on persnickety contract language or ambiguous terms. Other rep cases involve arcane questions of law. Then there’s the case brought by sales rep Lindsie Williamson that worked its way up to the Supreme Court of Utah in November 2022.
The ownership of life insurance is a much-needed component of business succession and personal financial plans. Life insurance needs vary from funding needed to purchase the ownership interest of a business partner upon death, creating liquidity for the family of a decedent for the payment of estate taxes or providing cash for surviving family members.
“Effective sales reps are the lifeblood of this market.”
U.S. District Judge R. Brooks Jackson was describing how medical implants manufacturers deploy sales reps with not only the character traits to develop relationships with surgeons, but also the medical knowledge necessary to help the surgeons use their products in the operating room.