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In 1999, petitioners became associated with Renaissance, The
Tax People, Inc. (RTP), also known as Advantage International
Marketing. RTP sold a product called “The Tax Relief System”
(the system), which was designed to generate Federal income tax
deductions. RTP claimed that by establishing a “home-based
business” activity, a taxpayer could convert personal expenses
into business expenses. The system consisted of various written
materials that RTP sold for $400. RTP promised to refund the
purchase price if a taxpayer failed to generate at least $5,000
of Federal income tax deductions during the first 12 months of
using the system.
RTP also sold a related service called “Platinum Tax
Advantage” (the platinum service)3 that was available to
customers who purchased the system. For $100 a month, platinum
service members could contact RTP and receive tax and financial
planning advice. RTP also claimed it would prepare customers’
tax returns and represent them before the Internal Revenue
Service (IRS) in the case of an audit.
RTP sold the system and the platinum service by means of
“multi-level marketing” or “network marketing”. A “downline”
distributor was recruited by an “upline” distributor. An upline
distributor earned a $30 commission for every sale he made of the
system and an additional $3 commission for each month a downline
3 The parties also referred to the platinum service as
“Prepaid Tax Advantage.”
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Last modified: May 25, 2011