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No single factor, nor even the existence of a majority of
factors favoring or disfavoring the existence of a profit
objective, is controlling. Brannen v. Commissioner, 722 F.2d
695, 704 (11th Cir. 1984), affg. 78 T.C. 471 (1982); sec.
1.183-2(b), Income Tax Regs. Rather, the relevant facts and
circumstances of the case are determinative. See Golanty v.
Commissioner, 72 T.C. 411, 426 (1979), affd. without published
opinion 647 F.2d 170 (9th Cir. 1981).
After careful consideration, we are satisfied that
petitioners did not engage in the marketing of Melaleuca products
with a profit objective.2 Petitioners did not prepare or
maintain any business plans, financial projections, or budgets
with respect to their Melaleuca activities. While petitioners
used a computerized accounting program to track income and
expenses, there is no evidence that petitioners used that
information to try to make their activities profitable. See id.
at 430.
Before becoming Melaleuca marketing executives, petitioners
had no experience in running a business. Nevertheless, they did
not seek independent business advice at the outset nor after
sustaining year after year losses. Instead, at most, petitioners
2We note that petitioners did not argue to shift the burden
of proof under sec. 7491(a). Regardless, the outcome of this
case is determined on the preponderance of the evidence after
trial and is unaffected by sec. 7491(a). See Estate of Bongard
v. Commissioner, 124 T.C. 95, 111 (2005).
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