- 17 - stake in petitioners’ retail and downline sales.”); Ogden v. Commissioner, supra (“Amway distributors may be biased when discussing Amway because they have a natural desire to advance the organization and/or obtain income from a downliner.”). Petitioners have steadfastly refused to seek counsel from disinterested third parties, even though the advice they have received from interested Amway individuals has done nothing to reverse petitioners’ history of uninterrupted and substantial losses. Furthermore, the record suggests that the “advice” petitioners received has consisted of little more than platitudes, generalities, and encouragement to “stick with it”. Also noteworthy is the fact that after her resignation from Administar Information Technologies in mid-1994, Mrs. Nissley was able to generate immediately a net profit as a self-employed business consultant, earning $23,193 based on gross receipts of $31,735 and total expenses of $8,542, for the last 6 months of 1994. By contrast, in their Amway activity, petitioners have incurred nothing but substantial losses for 8 consecutive years. Third, section 1.183-2(b)(8), Income Tax Regs., provides in part that “Substantial income from sources other than the activity (particularly if the losses from the activity generate substantial tax benefits) may indicate that the activity is not engaged in for profit especially if there are personal orPage: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Next
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