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that petitioner's contacts in the polo community were helpful in
selling horses.
The parties stipulated that BPS employed expert advisers and
competent and qualified persons to carry on its horse sales
activities. In 1986, petitioners hired Jeff Atkinson (Atkinson),
a seven-goal professional polo player and professional horse
trainer, to run BPS. Atkinson's duties included training horses,
supervising grooms, organizing the shipping of the horses, and
selling horses. Prior to joining BPS, Atkinson had been in the
polo sales business for many years. During that time, his sales
business accounted for over 60 percent of his income, and he had
sold more than 100 polo ponies.
The initial strategy of BPS was to purchase horses in
Argentina because of the country's reputation in the polo
community for producing high-quality horses. Some of these
horses would be ready to play with little training and could be
resold immediately. Petitioner and Atkinson thought that BPS
would be able to double its money on those horses because
petitioner had a source from which BPS could acquire the horses
cheaply. BPS also intended to develop a brood mare string from
the Argentinean horses, breed the mares, and train and sell the
foals as polo ponies. During the years at issue, BPS generally
had about 12 to 24 horses in training and for sale at any one
time.
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