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conducting the consulting activity. Petitioner did not alter his
method of business or engage in new methods of finding
prospective clients. Petitioner's only substantiated
advertisement for the year in issue was an entry in the 1994-95
edition of the American Electronics Association directory.
Petitioner conceded that he continued to buy new computer
equipment every year despite Fairbanks' mounting losses and a
dearth of clients.
Before 1992, the year petitioner started Fairbanks,
petitioner had no experience as a computer consultant. Yet,
despite this lack of expertise, petitioner failed to seek out
expert business advice on how to conduct Fairbanks as a
profitable activity. Petitioner contends that he continually
strove to gain expertise in the computer consulting field by
reading books, attending meetings, and speaking with venture
capitalists. Petitioner's testimony on this point, however, is
vague.
Petitioner also failed to establish that he expended
significant time or effort in conducting the consulting activity
during the year in issue. At trial, petitioner conceded that he
was unable to provide consulting services in 1995 because of the
long hours he worked at PCSI. In addition to the time spent
working for PCSI, petitioner spent significant amounts of time at
home with his children and attended engineering classes at UCSD.
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