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orders. Visa and MasterCard would not allow Red Caboose to
accept their credit cards during the years in issue.
While planning the activities to be pursued through Red
Caboose, Mr. Lencke looked through model railroad magazines to
find model railroad shows which would be convenient and feasible
for them to attend. He investigated the cost to rent tables at
the shows for petitioners to display and sell their merchandise,
and he made arrangements for them to become vendors at the shows.
Furthermore, petitioners advertised Red Caboose in model railroad
and toy magazines, and, in 1991, they published a two-page flyer
describing Red Caboose and listing its merchandise. The flyer
was distributed at model railroad shows. They also created Red
Caboose business cards during 1990, and used the elaborate model
railroad display in their basement as a way to entice visitors'
interests in collecting model railroads.4 However, they did not
formulate a written business plan for Red Caboose.
During the years in issue, petitioners did not maintain a
separate telephone line at their home for Red Caboose. Their
home telephone number was not listed in the local telephone
directory and, although it was listed on the business cards they
distributed, it was not provided in either their advertisements
4 Mr. Lencke treated visitors to his house to tours of the
model railroad collection in his basement. Although he did not
charge a fee for the tours, he encouraged "donations" by placing
a "donations bucket" near his collection. Some visitors donated
as much as $20.
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Last modified: May 25, 2011