- 16 -
objective is controlling. See id. Rather, the relevant facts
and circumstances of the case are determinative. See Golanty v.
Commissioner, 72 T.C. 411, 426 (1979), affd. without published
opinion 647 F.2d 170 (9th Cir. 1981). Thus, we must decide
whether it was reasonable for respondent to determine that
applying the section 183 factors, on balance, petitioner’s horse
activity was not conducted with the requisite profit objective.
We think that respondent's position was sufficiently
supported by the facts and circumstances in petitioner’s case and
the existing legal precedent. See Pierce v. Underwood, 487 U.S.
552 (1988). We note in particular the large amount of claimed
losses compared to minimal gross receipts, the minimal amount of
time devoted to the activity, and the number of years for which
losses were claimed. Given the facts, respondent reasonably
relied upon existing legal precedent to conclude that
petitioner’s horse activity was not a for-profit activity.
Petitioner requests that we apply the rationale in Han v.
Commissioner, T.C. Memo. 1993-386, to his case. However, Han is
distinguishable on several grounds. In Han respondent had
assigned the examination of a complex return to an inexperienced
revenue agent who made highly complex tax adjustments without
adequately developing the facts of the case or properly applying
the law. Subsequently, respondent fully conceded all major
adjustments contained in the agent’s RAR, including the agent’s
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Next
Last modified: May 25, 2011