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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 business
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