- 4 -
least up to the date of trial. During the years in issue,
petitioner claimed that he participated in the Amway activity on
an average of 15-20 hours per week. Mrs. Theisen claimed that
she participated in the Amway activity with her husband on an
average of 4 hours per week. She stated that her primary
function was doing the paperwork and visiting with wives of
prospective distributors of Amway products.
Amway is a supplier of various household products. It sells
these products via marketing through distributors, such as
petitioners. Distributors purchase the products for personal
use, as well as for resale to customers and downline distributors
(also known as "downliners"). Distributors are encouraged to
recruit others to become downline distributors. The Amway system
is based on a pyramid system whereby a distributor's direct and
indirect sales are rewarded with bonuses.
Petitioners filed joint Federal income tax returns for 1992
and 1993. On Schedules C of these returns, petitioners claimed
net losses in the amounts of $11,074 and $14,881, for 1992 and
1993, respectively, from Theisen Enterprises.
Theisen Enterprises is petitioners' sole proprietorship.
Petitioners claim that Theisen Enterprises is engaged in the
business of selling Amway products. On Schedule C of each
return, line B, "principal business code", petitioners listed
"3012", which number represents "Selling door to door, by
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011