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that grades each rider on his form. Petitioners’ daughters
mostly competed in equitation events.
Petitioners used the same ponies that their children rode
for pleasure to start the horse activity. At the start of the
horse activity, petitioners purchased Welsh ponies for the horse
activity. They chose Welsh ponies because that was the type of
horse their daughters were riding.
When they first started the horse activity, petitioners
talked to veterinarians, trainers, and other owners and read
periodicals about hunter and jumper horses. Petitioners also
owned books about ponies, hunters, and jumpers. Petitioners
attended seminars, clinics, and award banquets put on by horse
organizations.
C. Employees Hired by Petitioners
Around May 1991, petitioners hired Joe Norick to be the
horse activity’s trainer. In the middle of 1993, petitioners
hired Nicole Shahinian (Nicole) to ride their horses. Shortly
thereafter, petitioners decided to replace Mr. Norick with a new
trainer. One of the reasons petitioners decided to replace Mr.
Norick was because Jill and Claire could not ride the horses
petitioners owned. Petitioners replaced Mr. Norick with Nicole.
At this time, Nicole was responsible for training the
horses, giving their daughters lessons, and supervising all
aspects of the horse activity (including supervising people
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