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(Easter), May 28 (Memorial Day), September 3 (Labor Day), or
November 22 (Thanksgiving Day).
Our examination of the entire year’s worth of daily entries,
moreover, shows that almost 80 percent of Mr. Storer’s time was
spent either reading the monthly installments of a limited number
of photography magazines5 and books or shopping at retail stores.
Finally, were we to believe that the entries accurately
reflect the time petitioners spent cultivating photography into a
viable business, the time spent is grossly inverse to the actual
sales made in the years at issue.
The Taxpayers’ History of Losses and Financial Status
First, since 1996, petitioners’ claimed Schedule C business
losses have exceeded $13,000 in each year, while their gross
receipts from that same time never exceeded $1,600. Petitioners
have never earned a profit.
Petitioners cite our decision in Churchman v. Commissioner,
68 T.C. 696, 701 (1977), to support their contention that the
years of losses which preceded the years in issue should not
dictate our determination of whether their activity in 2000 and
2001 was conducted with the objective of making a profit. As
further support, petitioners argue that their losses were offset
5 For example, in January 2001, petitioner spent 14 hours
reading “Shutterbug” magazine, 8 hours reading “Outdoor
Photography” magazine, and 8 hours shopping at Circuit City and
CompUSA.
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Last modified: November 10, 2007