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Petitioner did not present any evidence that he had been
involved or demonstrated any success in any similar or dissimilar
type of activity.
6. The Taxpayer’s History of Income or Losses
With Respect to the Activity
Although no one factor is determinative of the taxpayer’s
objective to make a profit, a record of substantial losses, and
the unlikelihood of achieving a profitable operation is highly
probative of the taxpayer’s true objective. Golanty v.
Commissioner, 72 T.C. at 411; sec. 1.183-2(b)(6), Income Tax
Regs.
Petitioner’s main argument in this case is that the
activities of a State agency prevented him from operating a
profitable activity during 1990. Petitioner’s difficulties with
DHS resulted in prolonged delay, and, ultimately, in the seizure
of significant portions of petitioner’s inventory that was
allegedly hazardous waste.
Petitioner knew or should have known he was engaged in a
business that involved dangerous or hazardous chemicals.
Performing metal mining and refining operations required
adherence, at least to a degree, to minimal environmental
regulations, which represented a cost of doing business in this
particular field. Petitioner did not comply, and when confronted
with the environmental regulations, he chose to engage in lengthy
litigation. The dispute with DHS was not an unforeseen
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