William C. and Dorothy M. Smith - Page 15




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          more profitable.  Indeed the record presented at trial suggests,            
          at least with respect to Renaissance, that Mrs. Smith ceased                
          selling for the company because it was shut down by the Kansas              
          State authorities.                                                          
               The business plans and goal sheets that Mrs. Smith prepared            
          do not support a conclusion that she was operating her direct               
          marketing activities with the actual and honest goal of making a            
          profit.  These business plans were largely prepackaged by the               
          company for which she was selling and were full of vague and                
          unsupported puffery concerning the amount of sales she hoped to             
          make.  These purported business plans and goal sheets lacked any            
          analysis of how these vague goals might be achieved, what startup           
          costs were involved, how long it would take to recoup those                 
          startup costs, what type of market there was for the products she           
          was selling, or other types of analysis one might expect to find            
          in a genuine business plan.  While Mrs. Smith testified that she            
          did these types of analysis, there is nothing to substantiate her           
          self-serving testimony.  See Tokarski v. Commissioner, 87 T.C.              
          74, 77 (1986) (noting the Court is not required to accept a                 
          taxpayer’s self-serving testimony in the absence of corroborating           
          evidence).                                                                  
               In short, we find that the manner in which Mrs. Smith                  
          conducted her direct marketing activities, including the                    
          maintenance of records without any underlying analysis of how to            







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