Kenneth J. Nissley and Terri C. Connor Nissley - Page 16

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            practices, that one would expect of individuals pursuing an                                
            activity with a profit objective.  See Ogden v. Commissioner,                              
            T.C. Memo. 1999-397; Theisen v. Commissioner, T.C. Memo. 1997-                             
            539; Hart v. Commissioner, T.C. Memo. 1995-55.  Thus, petitioners                          
            did not maintain any written business plan for their Amway                                 
            activity (other than the Amway “6-4-2 plan”).  Further,                                    
            petitioners did not maintain either a written budget or a monthly                          
            report of expenses, nor did petitioners prepare a break-even                               
                  Also of significance is the fact that petitioners had no                             
            experience with the Amway-type of activity prior to the time that                          
            they were recruited by an Amway distributor.  See sec. 1.183-                              
            2(b)(2), Income Tax Regs.  Since that time, petitioners have                               
            relied only on advice from one of their “upline” distributors and                          
            other interested Amway individuals.  Yet, under the Amway system,                          
            the “upline” distributor’s bonus is not directly affected by the                           
            “downline” distributor’s profitability or lack of profitability;                           
            rather, it is the “downline” distributor’s volume of sales that                            
            is important to the “upline” distributor.  Nevertheless,                                   
            petitioners have steadfastly refused to seek counsel from                                  
            disinterested third parties regarding means by which their Amway                           
            activity might be made profitable.  See Poast v. Commissioner,                             
            T.C. Memo. 1994-399 (“for the most part, petitioners’ advisers                             
            were not experts as much as they were upliners with a financial                            

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