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entered is not reviewable by any other court, and this opinion
should not be cited as authority.
Respondent determined deficiencies of $10,696 and $9,657 in
petitioners’ 2000 and 2001 Federal income taxes, respectively.
After concessions by the parties,2 the issue is whether
petitioners are entitled to deduct certain business expenses on
Schedule C, Profit or Loss From Business, for an activity
participated in by petitioner Lang Her (petitioner) for the years
in issue. At the time the petition was filed petitioners resided
in Brown Deer, Wisconsin.
Background
In 1995, Michael C. Cooper (Mr. Cooper) founded and
incorporated a multilevel marketing company called Renaissance,
The Tax People, Inc.3 (Renaissance) in the State of Nevada, which
was operated out of Topeka, Kansas. At its core, Renaissance was
a pyramid scheme.4 Its only product, the “Tax Advantage System”
2 In a stipulation of settled issues, respondent conceded
that petitioners are entitled to a Schedule C expense for
supplies of $1,330 for the 2001 taxable year. In a stipulation
of facts, petitioners conceded that they are not entitled to a
dependency exemption deduction for petitioner Lang Her’s father
for either the 2000 or 2001 taxable year.
3 Also known as RTTP; TheTaxPeople.net; Advantage
International Marketing; AIM; and Renaissance Designer Gallery
Products, Inc.
4 A pyramid scheme is an investment program designed such
that early investors are paid off with money paid into the
program by later investors to encourage yet more and bigger
(continued...)
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Last modified: May 25, 2011