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and by their upliners, these were merely summary reports and show
no independent effort by petitioners to track and/or improve upon
the financial progress of the distributorship. Furthermore,
petitioners did not make any substantial alterations in an
attempt to improve the manner in which they conducted their
operations, even after six or more years of losses. We find that
this factor favors respondent.
2. The Expertise of the Taxpayer or his Advisers
A profit objective may be indicated where the taxpayer
carries on an activity in accordance with practices learned from
extensive study of accepted business and economic practices, or
consultation with experts involved therein. Sec. 1.183-2(b)(2),
Income Tax Regs. Petitioners sought the advice of persons who
might be considered experts in Amway-related activities.
Petitioners attended various events conducted regularly which
they believed would provide the expertise necessary to make their
distributorship profitable. Although no evidence shows that
petitioners sought the advice of experts outside the Amway
organization, who might have had a more objective viewpoint
regarding business plans and strategies, we find that this factor
favors petitioners.
3. Time and Effort Expended by the Taxpayer
A profit objective may be indicated where the taxpayer uses
much of his personal time and effort to carry on the activity.
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