- 15 - years.” Bessenyey v. Commissioner, 45 T.C. 261, 274 (1965), affd. 379 F.2d 252 (2d Cir. 1967). In the present case, there is no persuasive evidence that petitioners will enjoy “future net earnings”, much less that petitioners will be able to recoup the substantial losses ($187,754 through 1998) “which have meanwhile been sustained”. Second, we are not convinced that petitioners conducted their Amway activity in a businesslike manner. See sec. 1.183- 2(b)(1), Income Tax Regs. Although petitioners may have maintained a separate bank account and records for their Amway activity, such bank account and records appear to have been maintained principally to satisfy substantiation requirements imposed by the Internal Revenue Code and thus to “guarantee” the deductibility of expenses. In contrast, such bank account and records do not appear to have been used as analytic or diagnostic tools in an effort to achieve profitability of petitioners’ Amway activity. As we have previously stated: the keeping of books and records may represent nothing more than a conscious attention to detail. In this case, there has been no showing that books and records were kept for the purpose of cutting expenses, increasing profits, and evaluating the overall performance of the operation. The petitioner reviewed her records, but she has failed to show that she used them to improve the operation of the enterprise. [Golanty v. Commissioner, supra at 430.] Moreover, petitioners did not maintain certain types of records, nor did petitioners employ certain elementary businessPage: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Next
Last modified: May 25, 2011