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increased annually, the claimed deductions were more than
sufficient to offset the gross income.
We next consider the expertise of the petitioners or their
advisers. Sec. 1.183-2(b)(2), Income Tax Regs. Mr. Ogden
managed several employees and a $300,000 budget in his own full-
time work as a civil engineer. In 3 years, he doubled his
original staff of 8 employees. Mrs. Ogden has a bachelor’s
degree in business administration and previously had retail
experience managing stores for Eckerd Drugs and Reebok. Some of
her past duties included hiring and training employees, inventory
control, payroll, merchandising, and sales analysis. In 1993,
Mrs. Ogden received a certification in paralegal studies. She
was certified as a child advocate by a family court.
Before choosing Amway, Mr. Ogden investigated various
franchises. He spoke to his father, Amway distributors, and his
C.P.A. about the details of an Amway distributorship. We
question the value of the C.P.A.'s advice. We believe Amway
distributors may be biased when discussing Amway because they
have a natural desire to advance the organization and/or obtain
income from a downliner.
Another factor to consider is the time and effort expended
by petitioners in carrying on the Amway distributorship. Sec.
1.183-2(b)(3), Income Tax Regs. Petitioners alleged that they
worked evenings, lunch, and weekends in connection with their
Amway activities. Mr. Ogden claimed he worked on Amway
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