IRS TAX COMPLIANCE DISCLAIMER:
Your Agent Invoice may annotate a Master Service Agreement (MSA), Client Service Agreement (CSA) Early Termination Fee, Non-Compete Agreement Violation Fee (NCA), and/or a No Show Fee.
The stipulations for Early Termination Fees are outlined in your signed MSA between pages 24 – 26 (approximately) and every signed CSA between pages 15 – 18 (approximately).
The stipulations for the Non-Compete Agreement Fee is outlined in your signed MSA between pages 20 – 22 (approximately).
The stipulations for No Show Fees are outlined in each of your CSAs between page 5 (approximately).
Each of these documents are located in your Agent Folder, providing you 24/7 access. You can watch the video below for instructions on how to access your Agent Folder.
IRS Guideline Requirement
Contract fees are necessary to remain compliant with federal law. As a former Genesis Agent (contractor), IRS guidelines require that an “Opportunity for profit or loss” exists within the line of work in order to strengthen compliance with federal tax law. This is considered an important compliance factor.
When Agents are not able to meet the terms of their agreements (i.e. work requirements, duration of agreement, etc.), we exercise termination fees in order to systematically protect the Agent and Company. Termination fees invoke “the possibility of incurring a loss” for Agents and facilitates compliance for both parties. Otherwise, the Financial Control relationship remains unbalanced.
However, your early termination fees are tax deductible. You can utilize your Agent Invoice as documentation when filing your next tax return to recover fees incurred. Contact your tax advisor for details. We have included a reference to assist you with that process:
“Penalties and fines. Penalties paid for late performance or nonperformance of a contract are generally deductible. For instance, you own and operate a construction company. Under a contract, you are to finish construction of a building by a certain date. Due to construction delays, the building isn’t completed and ready for occupancy on the date stipulated in the contract. You are now required to pay an additional amount for each day that completion is delayed beyond the completion date stipulated in the contract. These additional costs are deductible business expenses”.
- IRS, “Miscellaneous Expenses”, "Penalties and fines", Chapter 11, Publication 535
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