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Michael A. Ogden and Colleen R. Ogden:
Accuracy-related Penalty
Year Deficiency sec. 6662(a)
1994 $5,533 $1,107
1995 $6,131 $1,226
Unless otherwise indicated, section references are to the
Internal Revenue Code in effect for the years in issue.
In the notices of deficiency, respondent disallowed
petitioners' deductions for Schedule C expenses incurred in
connection with their Amway distributorship on the grounds that
petitioners did not engage in their Amway activity for the
purpose of making a profit. The only two issues for this Court
to decide are: (1) Whether petitioners were not engaged in their
Amway activity for profit within the meaning of section 183 and
(2) whether petitioners are liable for the section 6662 accuracy-
related penalties for negligence.
Some of the facts in this case have been stipulated and are
so found. For convenience and clarity, the findings of fact and
opinion are combined. Petitioners resided in Pearland, Texas, at
the time they filed their petitions.
In 1992, petitioner Michael Ogden (Mr. Ogden) became a
distributor for Amway. In 1993, petitioner Colleen Ogden (Mrs.
Ogden), while single, joined Mr. Ogden as a distributor. Mr. and
Mrs. Ogden were married in 1994. Their daughter, Casie Nicole,
was born in September 1995.
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