                       T.C. Memo. 1996-134



                     UNITED STATES TAX COURT



             WILLIAM JAMES COURVILLE, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent


     Docket No. 21432-94.                    Filed March 18, 1996.


     William James Courville, pro se.

     James A. Whitten, for respondent.


                       MEMORANDUM OPINION

     COUVILLION, Special Trial Judge:    This case was heard

pursuant to section 7443A(b)(3) and Rules 180, 181, and 182.1

     Respondent determined a deficiency of $2,704 in petitioner's

Federal income tax, and an accuracy-related penalty of $541 under




1
     Unless otherwise indicated, section references are to the
Internal Revenue Code in effect for the year at issue. All Rule
references are to the Tax Court Rules of Practice and Procedure.
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section 6662(a) for negligence or disregard of rules or

regulations for petitioner's 1991 tax year.

     The issues for decision are:   (1) Whether a golfing activity

of petitioner was an activity not engaged in for profit under

section 183(a), and (2) whether petitioner is liable for the

accuracy-related penalty under section 6662(a).

     Some of the facts were stipulated, and those facts, with the

annexed exhibits, are so found and are incorporated herein by

reference.   At the time the petition was filed, petitioner's

legal residence was Sunnyvale, California.

     Petitioner has had a life-long goal of becoming a

professional golfer.   He has been playing golf since he was 13

years old, and has had a "5" handicap since age 20.    As an

amateur golfer, petitioner won six of his local club

championships.   He did not receive any prize money for winning

these championships.

     Petitioner was employed as an optical engineer for over 30

years.   When he was laid off by his employer, Lockheed Missiles &

Space, in May 1991 as a result of Department of Defense

downsizing, petitioner decided to exclusively devote his time to

pursuing his goal of becoming a professional golfer.    Petitioner

ceased all activities as an amateur golfer.

     In order to qualify to participate as a professional in a

Professional Golf Association (PGA) sponsored tournament in
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petitioner's age group, the "Seniors",    a golfer is required to

either qualify through a "qualifying school", where golfers

compete for a tour card; by qualifying for individual

tournaments; or have a track record from the PGA tour indicating

that the golfer is a constant performer.    Each year, only 8

golfers out of approximately 330 qualify in the qualifying

school, and only 4 golfers out of over 100 qualify for an

individual tournament.    There is no licensing required to become

a professional golfer.

     Sometime in 1991, petitioner attempted to qualify in a

"qualifying school" but did not rank well.    Thereafter, he

decided to devote his efforts to qualifying in individual

tournaments.   Petitioner is required to pay an entrance fee in

every tournament for which he attempts to qualify.    To date,

petitioner has failed to qualify in any of the tournaments in

which he has entered.    The best petitioner has done in these

tournaments is to qualify as an alternate.    In an attempt to

improve his skills, petitioner took four golf lessons from

players he met at the qualifying tournaments.    He also saw a

psychiatrist because his "golfing ability is not what's had

trouble; it's my thought process that's a problem."

     In July 1995, petitioner became a golf instructor, with the

intent of earning sufficient income to finance his continuing

efforts in qualifying for, and joining, the PGA Seniors tour.
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Petitioner teaches golf 3 days a week.   When he is not teaching,

and on his days off, petitioner practices and plays golf.

     On Schedule C, Profit or Loss from Business, filed with his

1991 Federal income tax return, petitioner reported the income

and expenses of his golfing activity.    He reported gross income

of zero and $16,384 expenses.   After 1991, petitioner did not

file a Schedule C for his golfing activity.   Petitioner's

explanation for not filing Schedule C's for his golfing activity

after 1991 is as follows: "I had no [wage or Schedule C] income,

so how could I write off my expenses against no income?"

Petitioner has kept no formal books or records.   He did keep a

sheet titled "Tax Info" that listed his golfing expenses for

1991, but the amount of the expenses claimed on Schedule C does

not correspond with the amounts listed on the sheet.   Petitioner

also kept certain receipts for expenditures relating to his

golfing activity.

     In the notice of deficiency, respondent determined that

petitioner was not engaged in his golfing activity for profit

within the meaning of section 183 and disallowed the loss for

1991.   In the alternative, respondent determined that, if

petitioner was engaged in his golfing activity for profit, then

the expenses incurred by petitioner constitute start-up costs

under section 195.
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     Section 183(a) provides generally that, if an activity is

not engaged in for profit, no deduction attributable to such

activity shall be allowed.   Section 183(b)(1), however, provides

that deductions that are allowable without regard to whether the

activity is engaged in for profit shall be allowed.    Section

183(b)(2) further provides that deductions that would be

allowable only if the activity were engaged in for profit shall

be allowed, "but only to the extent that the gross income derived

from such activity for the taxable year exceeds the deductions

allowable by reason of" section 183(b)(1).

     Section 183(c) defines an activity not engaged in for profit

as "any activity other than one with respect to which deductions

are allowable for the taxable year under section 162 or under

paragraph (1) or (2) of section 212."    We inquire whether the

taxpayer is engaged in the activity with the "actual and honest

objective of making a profit".     Ronnen v. Commissioner, 90 T.C.

74, 91 (1988); Dreicer v. Commissioner, 78 T.C. 642, 645 (1982),

affd. without opinion 702 F.2d 1205 (D.C. Cir. 1983).    The

taxpayer's expectation of profit need not be a reasonable one,

but there must be a good faith objective of making a profit.

Dreicer v. Commissioner, supra at 645; sec. 1.183-2(a), Income

Tax Regs.   The determination of whether the requisite profit

objective exists is to be resolved on the basis of all the

surrounding facts and circumstances of the case.    Golanty v.
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Commissioner, 72 T.C. 411, 426 (1979), affd. without published

opinion 647 F.2d 170 (9th Cir. 1981); sec. 1.183-2(b), Income Tax

Regs.   Greater weight is to be given to the objective facts than

to the taxpayer's mere statement of his intent.    Dreicer v.

Commissioner, supra at 645; sec. 1.183-2(a), Income Tax Regs.

The taxpayer has the burden of proving the requisite intention

and that respondent's determination that the activities were not

engaged in for profit is incorrect.    Rule 142(a); Welch v.

Helvering, 290 U.S. 111 (1933).

     Although the question of the taxpayer's profit motive is a

subjective one, objective indicia may be considered to establish

the taxpayer's true intent.   Sec. 1.183-2(a), Income Tax Regs.

Section 1.183-2(b), Income Tax Regs., sets forth a nonexclusive

list of nine objective factors to be considered when ascertaining

a taxpayer's intent.   These factors are:   (1) The manner in which

the taxpayer carries on the activity; (2) the expertise of the

taxpayer or his advisers; (3) the time and effort expended by the

taxpayer in carrying on the activity; (4) the expectation that

the assets used in the activity may appreciate in value; (5) the

success of the taxpayer in carrying on other similar or

dissimilar activities; (6) the taxpayer's history of income or

losses with respect to the activity; (7) the amount of occasional

profits, if any; (8) the financial status of the taxpayer; and

(9) the elements of personal pleasure or recreation involved in
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the activity.   These factors are not merely a counting device

where the number of factors for or against the taxpayer is

determinative, but rather all facts and circumstances must be

taken into account, and more weight may be given to some factors

than to others.   Cf. Dunn v. Commissioner, 70 T.C. 715, 720

(1978), affd. 615 F.2d 578 (2d Cir. 1980).    Not all factors are

applicable in every case, and no one factor is controlling.

Abramson v. Commissioner, 86 T.C. 360, 371 (1986); Allen v.

Commissioner, 72 T.C. 28, 34 (1979); sec. 1.183-2(b), Income Tax.

Regs.

     Petitioner has been playing golf since he was 13 years old

and clearly gains personal pleasure in the game.    While

petitioner participated in numerous tournaments as an amateur

golfer, with some success, prior to engaging in his golfing

activity in 1991, he never worked in any capacity as a

professional golfer.    Petitioner appears to have spent a

significant amount of time and effort in carrying on his golfing

activity.   However, this time and effort has been without much

success both from a professional and a financial standpoint.     To

date, petitioner has failed to qualify to participate in any PGA

sponsored tournament.    Despite his lack of success in qualifying

for any tournament, petitioner has only taken four golf lessons

to improve his skills since engaging in the activity.
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     Petitioner has failed to earn any income from his golfing

activity since its commencement in 1991.     At trial, petitioner

stated that it was unknown to him when he would earn sufficient

income as a professional golfer to sustain the expenses from his

activity.   Since July 1995, petitioner has been giving golf

lessons as a means of earning income to finance his golfing

activity.   It appears the only reason petitioner has not claimed

Schedule C losses since 1991 is that he had no other income

against which he could deduct the expenses of his activity.

Petitioner did not keep regular books and records of his golfing

activity.

     After considering all of the facts and circumstances, the

Court concludes that petitioner failed to carry the burden of

establishing that his golfing activity was carried on with the

actual and honest objective of making a profit.     See the similar

case of Heywood v. Commissioner, T.C. Memo. 1994-575.

Accordingly, respondent is sustained on this issue.

     The next issue is whether petitioner is liable for the

penalty under section 6662(a) for negligence or disregard of

rules or regulations.   In pertinent part, section 6662 imposes an

accuracy-related penalty equal to 20 percent of the portion of an

underpayment of tax that is attributable to negligence or

disregard of rules or regulations.     Sec. 6662(a), (c).   Section

6662(c) defines "negligence" as including any failure to make a
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reasonable attempt to comply with the provisions of the Internal

Revenue Code and defines "disregard" as including any careless,

reckless, or intentional disregard.     However, under section

6664(c), the penalty under section 6662(a) shall not be imposed

with respect to any portion of the underpayment if it is shown

that there was reasonable cause for the underpayment, and the

taxpayer acted in good faith.

     Petitioner failed to present any evidence to show reasonable

cause why he should not be held liable for the penalty under

section 6662(a).   Moreover, the record shows that petitioner's

activity was far from being a for-profit activity, and petitioner

was negligent in claiming a substantial loss from that activity.

Accordingly, respondent is also sustained on this issue.



                                           Decision will be entered

                                           for respondent.
