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partnership had entered already obligated Barnes Ranches to
provide stud ram services to a partnership's breeding sheep.
The Court considers the flock recap sheets Mr. Hoyt and his
organization compiled highly suspect and unreliable, as Mr. Hoyt
and his organization failed to employ good record keeping
practices and appear to have prepared the recap sheets in a
manner contrary to standard, fundamental accounting principles.
The Court also can see no good reason or justification for their
preparing these annual flock recap sheets in this highly
deficient manner--if each of these partnerships, as petitioners
maintain, indeed "owned" anywhere near the number of specific
individual breeding sheep stated in its bill of sale. Indeed,
the Court believes that the flock recap sheets were prepared in
this manner because the requisite number of specific breeding
sheep did not exist and could not, in fact, be assigned to each
partnership. It is also to be noted that the flock recap sheets
were, at times, inconsistent with the partnership returns Mr.
Hoyt filed. For instance, the annual flock recap sheets reflect
that RCR #3 had no breeding sheep by 1987. However,
notwithstanding its apparently having no sheep, on its returns
for the years 1987, 1988, and 1989, RCR #3 continued to claim and
take farming expense deductions.
D. Petitioners' Corrected Bills of Sale
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