Rev. Rul. 58-175

Advice has been requested whether industrial insurance debit agents are considered `outside salesmen' for the purposes of section 62(2)(D) of the Internal Revenue Code of 1954.

The principal activity of industrial insurance debit agents is to collect premiums on, service and sell weekly and monthly insurance policies and also ordinary and accident insurance. They report to their local territorial office several times a week and then go out to the field. They are considered employees for the purposes of social security, unemployment insurance and state workmen's compensation programs. See Rev. Rul. 58-176, page 349. Under section 62(2)(D) of the Code, an `outside salesman' who is an employee is entitled to deduct all of his business expenses in determining his adjusted gross income and also claim the standard deduction. However, the Senate Report of the Committee on Finance, No. 1622, 83d Congress, Second Session, pages 169 and 170, makes it clear that section 62(2)(D), supra , applies only to full-time outside salesmen and that it does not apply to salesmen whose principal activities consist of service and delivery, such as bread or milk-driver salesmen. Based upon the foregoing, it is the conclusion of the Internal Revenue Service that the activities of industrial insurance debit agents correspond to those of the bread or milk-driver salesmen and, therefore, are not considered `outside salesmen' within the meaning of section 62(2)(D) of the Code for the purpose of computing adjusted gross income.