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F. Petitioners’ Reconciliation and the Termination of the
Amway Activity
By November 1997, petitioners had reconciled, and the
divorce action was nonsuited. Subsequently, at some point in
1998, petitioners decided that they would no longer actively
pursue the Amway activity. Since that time, however, Mrs. Meyer
has continued to renew her status as an Amway distributor in
order to retain the right to purchase Amway products, such as
vitamins and cleaning products, for petitioners’ personal use at
discount prices.
G. Petitioners’ Schedule C Losses
For all relevant years, specifically including the taxable
years 1994 through 1998, petitioners filed joint Federal income
tax returns. Petitioners attached to each of those returns a
Schedule C, Income or Loss From Business, identifying “Karl L.
Meyer” as “proprietor” of “Meyer Enterprises” and describing the
principal business or service of such enterprise as
“Distribution”.
Petitioners have never reported a profit from the Amway
activity. Rather, petitioners have consistently claimed losses
from this activity and have used such losses to offset Mr.
Meyer’s compensation as a salesman.
The following schedule reflects the losses claimed by
petitioners from the Amway activity on Schedules C of their tax
returns for 1994 through 1998:
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Last modified: May 25, 2011