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Golanty v. Commissioner, supra at 426. No single factor, nor the
existence of even a majority of the factors, is controlling, but
rather an evaluation of all the facts and circumstances is
necessary. Golanty v. Commissioner, supra at 426-427.
1. Manner in Which Petitioner Carried On His Reliv Activity
Petitioner has stipulated that he had not prepared a
business plan for his Reliv activity before preparing for this
trial. He prepared no formal budget, contemporaneous profit
projections, or break-even analyses.4 He maintained no organized
record-keeping system that might have enabled him periodically to
evaluate his profitability (or more accurately, the extent of his
nonprofitability). To the contrary, the manner in which
petitioner carried on his Reliv activity strongly suggests that
he was not primarily concerned about realizing a profit. This
conclusion is buttressed by petitioner’s stipulation that he
“will not stop his Reliv activities until he runs out of money to
finance the activity.”
4 At trial, petitioner presented a purported plan for
recouping his past losses. That plan appears premised in part on
an assumption that at some indefinite point petitioner will be
earning commissions on sales by at least 120 Reliv distributors
that he will have sponsored. At trial, petitioner conceded that
this projection lacked any “concrete justification”. When we
consider that over his nearly 10-year involvement with the Reliv
activity, petitioner’s only sponsorees have been his brother and
his son (who quickly quit the activity), a financial plan
predicated on a projection of 120 sponsorships appears wildly
optimistic.
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