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the discussion centered on whether the sales expectations for the
year had been met.
The day-to-day business operations of petitioners' Allstate
insurance business and the day-to-day interactions of petitioners
with Allstate were essentially the same as the day-to-day
business operations and the day-to-day interactions of the
taxpayer and Allstate as described in Butts v. Commissioner,
supra.
When she started her business, Mrs. Lozon searched for and
secured an office location. Mrs. Lozon signed a lease (Allstate
approved the lease to assure that it had no liability on the
lease), set up an office, opened her doors, and started to
prospect for clients. Mrs. Lozon advertised extensively in
newspapers and spent money, some of it reimbursed by Allstate, in
an effort to increase her business. The business grew quickly,
and Mr. Lozon joined Mrs. Lozon in the business. Mrs. Lozon
moved to a larger office in 1989 and incurred additional expenses
to remodel the new facility.
Even while the business was growing, there was always a
possibility of petitioners' incurring a loss. Commissions were
petitioners' only source of income. Petitioners were permitted,
with Allstate's consent, to sell non-Allstate insurance products.
Petitioners personally bore the obligation to pay for most of
their business expenses, including office rent, utilities,
telephone, and personnel. Petitioners were reimbursed by
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