SECTION 3. SCOPE

This revenue procedure applies to cash advances paid by the Company to an agent if (and only if) all four of the following conditions are met: (1) the agreement between the Company and the agent states that the cash advance is a “loan”; (2) the Company charges adequate interest on the cash advance during the period it is outstanding; (3) the agent is personally liable for the repayment of the cash advance and payment of any accrued but unpaid interest (that is, the Company’s source of repayment is not limited to the agent’s earned cash advances); and (4) the Company treats the cash advance as a loan for all federal tax purposes including employment tax purposes.