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place prior to the years in issue. By the beginning of 1996,
petitioners had ample experience with Amway and even had tried it
for the appropriate initiating time with their new group and the
aid of their “personal friends”. Their decision to continue
their Amway activity during 1996 and 1997 after their extensive
and wholly unsuccessful experiences with Amway simply cannot be
accepted as a bona fide business decision.
Petitioners did not conduct their Amway activity in a
businesslike manner during the years in issue. They had no
separate bank account for Amway. They had no records concerning
their meager receipts. Mr. Landrum suggested that the few
dollars of receipts must have been from the little checks that
Amway occasionally sent, but he had no records about such
matters. Petitioners kept receipts of expenditures and
calendars, but these materials were not organized or analyzed in
any manner to improve results. Petitioners did not retain
canceled checks or banking records to prove their expenditures.
Petitioners had no business plan other than the 6-4-2 concept and
a one-page inspirational listing of such items as “Listen to at
least one audiotape promoted by our upline” and “Read 15 minutes
per day from a book promoted by our upline”. They did not
consult with business experts but relied only on advice from one
of their upline distributors and other interested Amway persons.
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