Tax Court Denies Amway Losses Due To Lack Of Profit Motive
The Tax Court denied the losses because Mr. Hess did not have any sort of a business plan. What he received from Worldwide Group “did not contain information that is generally found in a formal business plan”. It was more of a description of how revenue could grow.
It is interesting to note that the Tax Court has become a little more relaxed in calling for formal business plans in Section 183 cases recognizing that people in essentially crap shoot businesses like art and horse breeding don’t need accountants to tell them how to make money. Yet it seems to be holding the line when it comes to Amway.
Donor-Advised Funds: The Good, The Bad And The Ugly
When I spoke with Professor Madoff, she did not dispute that there were positive aspects to donor advised funds, but the focus of the article is on the downside. It is something that would never have occurred to me. Private foundations are required to make distributions every year, but there is no such requirement for donor advised funds. So apparently a lot of people are, in effect, advising the sponsors to just sit on their assets.
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Over and over again courts have said that there is nothing sinister in so arranging one’s affairs as to keep taxes as low as possible. Everybody does so, rich or poor; and all do right, for nobody owes any public duty to pay more than the law demands: taxes are enforced exactions, not voluntary contributions. To demand more in the name of morals is mere cant.