UNITED STATES COURT OF APPEALS
For the Fifth Circuit
No. 00-60217
MICHAEL A. OGDEN
Petitioner-Appellant,
versus
COMMISSIONER OF INTERNAL REVENUE,
Respondent-Appellee.
No. 00-60220
MICHAEL A. OGDEN; COLLEEN OGDEN,
Petitioners-Appellants,
versus
COMMISSIONER OF INTERNAL REVENUE,
Respondent-Appellee.
Appeals from a Decision of the United States Tax Court
March 20, 2001
Before: FARRIS*, JOLLY, and DAVIS, Circuit Judges.
PER CURIAM:
*
Circuit Judge of the Ninth Circuit, sitting by designation.
Michael A. Ogden and Colleen Ogden appeal the decision of the tax court
denying their petitions for redetermination of federal taxes and imposing an
accuracy-related penalty.2 We have jurisdiction pursuant to 26 U.S.C.
§ 7482(a), and we affirm.
We review for clear error the tax court's profit motive inquiry, see Westbrook
v. Commissioner, 68 F.3d 868, 876 (5th Cir. 1995), and determination of negligence
for an accuracy-related penalty, see id. at 880. Clear error exists when this court is
left with the definite and firm conviction that a mistake has been made. See
Chamberlain v. Commissioner, 66 F.3d 729, 732 (5th Cir. 1995).
We have carefully reviewed the record following skillful and persuasive oral
argument by counsel for the petitioner. We agree that the tax court was not
compelled to enter the findings that it made. Our review, however, is to determine
whether these findings are supported by the record. They are. There is, on this
record, no basis for a firm conviction that an error has been made.
The record supports the finding that the Ogdens' objective was not profit but
to purchase household goods and make financial deductions to offset their wage
income. We therefore affirm the tax court's determination of tax liability. See
2
On April 26, 2000, the court granted the parties' joint motion to consolidate appeals.
2
Westbrook, 68 F.3d at 875-76.
Contrary to the Ogdens' contention, evidence of profit is not determinative of
whether a profit motive exists. See id. at 876 (no single tax regulation factor, nor
the existence of a majority of factors, is determinative of whether a profit motive
exists). There is overwhelming evidence in the record that, if believed, supports a
conclusion that the Ogdens maintained their Amway activity for deductions,
personal pleasure and to offset wages. The tax court did not abuse its discretion in
denying the motion for reconsideration. See id.
The record supports the finding that the Ogdens failed to comply with
provisions of the Internal Revenue laws, failed to exercise due care by continuing
with an unprofitable endeavor, and maintained unbusinesslike records. We affirm
the tax court's imposition of an accuracy-related penalty. See Westbrook, 68 F.3d at
880-81.
AFFIRMED.
3