Codification of treatment of certain termination payments received by former insurance salesmen
Nothing in subsection (a) shall be construed as including in the net earnings from self-employment of an individual any amount received during the taxable year from an insurance company on account of services performed by such individual as an insurance salesman for such company if—
(1)
(1)#
such amount is received after termination of such individual’s agreement to perform such services for such company,
(2)#
such individual performs no services for such company after such termination and before the close of such taxable year,
(3)#
such individual enters into a covenant not to compete against such company which applies to at least the 1-year period beginning on the date of such termination, and
(4)#
the amount of such payment—
(A) depends primarily on policies sold by or credited to the account of such individual during the last year of such agreement or the extent to which such policies remain in force for some period after such termination, or both, and
(B) does not depend to any extent on length of service or overall earnings from services performed for such company (without regard to whether eligibility for payment depends on length of service).