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Sections 162(a) and 212 are considered in pari materia,
except for the fact that the income-producing activity
of the former section is a trade or business whereas
the income-producing activity of the latter section is
a pursuit of investing or other profitmaking that lacks
the regularity and continuity of a business. [Guill v.
Commissioner, supra at 328.]
In order to be engaged in carrying on a trade or business,
the taxpayer must be involved in the activity with continuity and
regularity, and the taxpayer’s primary purpose for engaging in
the activity must be for income or profit. A sporadic activity,
a hobby, or an amusement diversion does not qualify. See
Commissioner v. Groetzinger, 480 U.S. 23, 35 (1987). Determining
whether a taxpayer is engaged in carrying on a trade or business
requires an examination of the facts. Id. at 36.
Petitioner claims that he was in the trade or business of
attempting to collect compensation from the State of Texas and
conducted that business through Green Capital and TS Capital.
Petitioner argues in his brief:
In pursuing compensation for Petitioner’s claims
against the State from 1991 to 1995, Petitioner
retained and consulted with several consultants and
advisors, including * * * [lobbyists], engaged in an
ongoing orchestrated media campaign and conferred with
and lobbied Texas State legislators. From 1991 to
1995, Petitioner engaged in such activities on [a]
regular and continuous basis and such activities were
done for the purpose of seeking profit, naming [sic]
collecting compensation for Petitioner’s claims against
the State. [Citations omitted.]
Though petitioner continuously and regularly engaged in the
activity of attempting to recover his judgment between 1991 and
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