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have maintained with respect to the activity. She had no set
fees for her services, allowed customers to pay at their
discretion, and made little or no effort to collect outstanding
debts, notwithstanding the fact that she incurred substantial
losses repeatedly over several years.
The fact that petitioner failed to change her manner of
operation in an effort to reverse her history of losses also
supports respondent's adjustment. See id. Although a profit
objective may exist despite a history of losses unaccompanied by
any gains, see, e.g., Bessenyey v. Commissioner, supra at 273-
274, losses continuing beyond the period customarily necessary to
make the operation profitable, if not explained, support the
proposition that the activity is not engaged in for profit. Sec.
1.183-2(b)(6), Income Tax Regs. The record reflects that
petitioner operated the activity in 1989 in a similar manner to
its operation in prior years insofar as the general set up of the
activity, the number of students tutored, the time petitioner
devoted to the tutoring activity, etc. Petitioner did not change
her operating methods from one year to the next in a manner
consistent with an intent to improve profitability and did not
adequately explain why she failed to do so. Sec. 1.183-2(b)(1),
Income Tax Regs.
Considering her history of losses, petitioner's practices of
neither charging nor collecting fees from customers who were
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