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3,520 acres of land in Harlan County, Kentucky (occasionally the
coal property), and that ERL would earn future income for its
partners by exploiting its rights under the lease. The offering
materials consisted of 94 pages of information concerning the
offering and contained a discussion of a variety of matters,
including the partnership’s objectives, the terms of the
agreement, potential risk factors, and related Federal tax
issues. Sixteen pages of the 94-page offering memorandum
consisted of a discussion regarding the Federal income tax
consequences relating to the offering. Attachments to the
offering memorandum included a tax opinion, a Coal Reserve
Report, and accounting and productivity projections. Although
many of these attachments were lacking in detail and specificity,
the tax opinion was an exception. The tax opinion, which was
authored by the taxpayer in the Coggin case, exceeded 100 pages
in length and was extensive and thorough. The offering
memorandum also contained 12 exhibits. Included among the
exhibits were a copy of the limited partnership agreement, a copy
of the lease agreement, and copies of various partnership
promissory notes.
McIntyre was ERL’s managing general partner and the sponsor
of the offering materials. ERL’s associate general partner was
McIntyre’s brother, Charles McIntyre. The offering materials
advised potential investors that McIntyre was the president of
Economic Research Analysts, Inc. (ERA). ERA was an entity with
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Last modified: May 25, 2011