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Respondent determined deficiencies in petitioners’ 1996 and
1997 Federal income taxes of $4,805 and $6,720, respectively, and
an accuracy-related penalty under section 6662(a) for 1997 of
$1,344. The issues for decision are: (1) Whether petitioners’
Amway distributorship was an activity engaged in for profit
within the meaning of section 183; (2) whether petitioners are
entitled to claimed Schedule C deductions for expenditures
relating to their Amway activity; (3) whether petitioners are
entitled to deduct as charitable contributions amounts in excess
of the amounts allowed by respondent; and (4) whether petitioners
are liable for an accuracy-related penalty under section 6662(a)
for 1997.
Background
Some of the facts have been stipulated and are so found.
The stipulation of facts and the attached exhibits are
incorporated herein by this reference.
When the petition was filed, petitioners resided in Lawton,
Oklahoma. Petitioner James R. Landrum (Mr. Landrum) worked full-
time for Goodyear Tire and Rubber Co. (Goodyear) as a quality
technician in 1996 and as an alignment specialist in 1997.
Petitioner Janet M. Landrum (Mrs. Landrum) worked full-time as an
x-ray technician for Southwestern Medical Center during both
years in issue. Petitioners’ four children were, respectively,
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