- 18 -
profitable.10 See Poast v. Commissioner, T.C. Memo. 1994-399
(“for the most part, petitioners’ advisers were not experts as
much as they were upliners with a financial stake in petitioners’
retail and downline sales”); Ogden v. Commissioner, T.C. Memo.
1999-397 (“Amway distributors may be biased when discussing Amway
because they have a natural desire to advance the organization
and/or obtain income from a downliner.”).
Petitioners’ refusal to seek meaningful counsel from
disinterested third parties is all the more telling given the
fact that the advice received from interested Amway individuals
did nothing to reverse petitioners’ history of uninterrupted and
substantial losses. Furthermore, the record suggests that the
“advice” petitioners received consisted of little more than
platitudes, generalities, and encouragement to “give it all
you’ve got”.
A fourth factor militating against petitioners’ claim is the
amount of time that petitioners devoted to the Amway activity.
See sec. 1.183-2(b)(3), Income Tax Regs. In this vein, Mrs.
Meyer repeatedly testified that the key to a successful Amway
“business” was not selling products, but rather establishing an
extensive network of “downline” distributors in order to “change
10 We do not regard general encouragement given by Mrs.
Meyer’s divorce lawyer to “stick with it” to constitute
meaningful business counsel. In any event, Mrs. Meyer admitted
that this individual never gave her advice concerning how the
Amway activity might be made profitable.
Page: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 NextLast modified: May 25, 2011