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the recycling business and failed to maintain a budget or make
projections as to the future profitability of the farm activity.
There is no indication here that Omega’s activity was
changed and/or that plans were carried out to ameliorate the
substantial excess of expenditures over receipts. Accurate books
and records could have provided the data to make educated
decisions toward achieving profitability. See, e.g., Wesinger v.
Commissioner, T.C. Memo. 1999-372, and the cases cited therein.
There is very little evidence in the record to establish how
other comparable and profitable farming activities operate.
Given petitioner’s business acumen with respect to the recycling
business and the fact that petitioners’ accountant and others
provided guidance with regard to profitability, we find it
particularly compelling that petitioner did not follow the advice
of his accountant or the agricultural experts with whom
petitioner sought counsel and thus continued to permit Omega to
incur heavy losses in its farm activity. During a 6-year period,
including the years under consideration, Omega’s recycling
business income increased exponentially while petitioner did
nothing to change Omega’s farm-activity losses. Omega maintained
minimal herds of livestock and did nothing to improve the quality
of its crop.
It also appears that petitioner structured Omega’s leases
with Larralde and CBR to maximize Omega’s expenses while no
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