If an Agency Relationship Did Not Establish a Rate of Compensation

question 362

True/False

If an agency relationship did not establish a rate of compensation for the duties of the agent, the principal must pay the "customary" rate for such services.

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Definitions:

Salaries

Fixed regular payments made by an employer to an employee, typically expressed as an annual sum and taxed as ordinary income.

Tips

Additional money given to service workers for performed services, which is considered taxable income by the IRS.

Tax Liability

The total amount of tax owed to the government by an individual, corporation, or other entity by a specified date.

Income Tax Return

The form or forms used to report income to a federal, state, or local tax authority and to calculate taxes owed.