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Jay Hoyt was also the tax matters partner (TMP) of each
partnership and was a licensed enrolled agent. As an enrolled
agent he represented many of the investor-partners before the
Internal Revenue Service (IRS). In 1997, the IRS disbarred Jay
Hoyt as an enrolled agent for certain alleged improprieties
relating to his individual income tax returns. By orders of the
Tax Court issued from June 22, 2000, through May 15, 2001, Jay
Hoyt was removed as TMP from the sheep partnerships.
From April 1981 through February 1987, Jay Hoyt,
representing each of the Hoyt sheep partnerships (excluding OGT
90)6, entered into agreements with David Barnes to purchase
Rambouillet and Suffolk breeding ewes from Barnes Ranch for each
of the partnerships. The separate agreements that each
partnership entered into with Barnes Ranch were substantially
similar in all material respects. Each agreement contained terms
for the partnerships to purchase the sheep with no money down by
each issuing Barnes Ranch a promissory note. The partners of
each partnership then personally assumed the partnership debt
under an assumption agreement. Further, each partnership entered
into a share-crop operating agreement with Barnes Ranch to manage
6 In the River City Ranches #4 test case, Jay Hoyt
maintained that OGT 90 in 1990 entered into sheep sale and share-
crop management agreements with W.J. Hoyt Sons Ranches MLP, not
with Barnes Ranch. However, during that test case trial, David
Barnes testified that Barnes Ranch had sold OGT 90 its “breeding
sheep”. See River City Ranches #4, J.V. v. Commissioner, T.C.
Memo. 1999-209, affd. 23 Fed. Appx. 744 (9th Cir. 2001).
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