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Income Tax Regs. Although petitioners maintained computer-
generated records for the Amway activity (and may also have
utilized a separate bank account), such records appear to have
been maintained principally to satisfy substantiation
requirements imposed by the Internal Revenue Code and thus to
“guarantee” the deductibility of expenses. In contrast, such
records do not appear to have been used as analytic or diagnostic
tools in an effort to achieve profitability of the Amway
activity. As we have previously stated:
the keeping of books and records may represent nothing
more than a conscious attention to detail. In this
case, there has been no showing that books and records
were kept for the purpose of cutting expenses,
increasing profits, and evaluating the overall
performance of the operation. The petitioner reviewed
her records, but she has failed to show that she used
them to improve the operation of the enterprise.
[Golanty v. Commissioner, supra at 430.]
Moreover, petitioners did not maintain certain types of
records, nor did petitioners employ certain elementary business
practices that one would expect of individuals pursuing an
activity with a profit objective. See Nissley v. Commissioner,
T. C. Memo. 2000-178; Ogden v. Commissioner, supra; Theisen v.
Commissioner, T.C. Memo. 1997-539; Hart v. Commissioner, T.C.
Memo. 1995-55. Thus, although a monthly report of expenses was
maintained, neither profit projections, a break-even analysis,
nor a formal budget was ever prepared. Further, no market
analysis was ever undertaken, nor was any business plan (other
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