In 1994, one of our customers, a retired National Sales Director for Mary Kay Cosmetics, was audited by the IRS.

The issue: the IRS asserted that her post-retirement payments from Mary Kay Cosmetics (which did not represent "deferred compensation") were subject to self-employment tax for the 15-year period of her post-retirement agreement with Mary Kay Cosmetics.

Our solution: by careful analysis of her post-retirement agreement, known as The Family Security Program, and related Internal Revenue Code and Regulations, we pointed out the reasons why these payments were indeed not subject to self-employment tax. We presented this information to the IRS in the form of an "Income Tax Opinion."

The result: the IRS agreed with us and our customer won! Tax savings: almost $200,000!

AND EVEN BETTER: in the subsequent years, we have used our Income Tax Opinion on this matter for 16 other retired Mary Kay Cosmetics retired National Sales Directors all over the country. In each and every case, the IRS has agreed that self-employment tax does not apply to those post-retirement payments!