- 17 -
and that now each partnership had cattle again.
In a memorandum dated February 4, 1991, issued to various
workers in the Hoyt organization, Jay Hoyt instructed them to
register with the ASA a calf for each cow that had been bred, not
just the “live calves”.10 According to Jay Hoyt, this was
necessary in order to qualify for a lower registration fee rate
of $6 per animal.11
In his memorandum dated October 1, 1993, to the Hoyt
organization’s cattle managers, Jay Hoyt instructed them to
prepare herd recap sheets for the cattle-breeding partnerships up
through December 31, 1992. He further advised them that, using
some of Management’s other cattle record information, they were
to “fill in” Management’s cattle records by recording specific
cattle as belonging to a particular partnership. He commented
that all of the cattle a partnership was assigned must have
10The ASA generally did not inspect or otherwise verify the
existence of the Shorthorn cattle registered with it, because it
generally accepted to be true the information concerning the
animal provided in the registration application a breeder
submitted. However, where an animal being registered was
produced through artificial insemination techniques, such as
embryo transplanting, the ASA’s rules required that the animal’s
asserted parentage be established through a blood test.
11At about this time, the Hoyt organization proposed to
Roger Hunsley (Mr. Hunsley) (who had been the ASA’s executive
director since about 1983 and an expert witness for the taxpayers
in Bales v. Commissioner, supra,) that it be allowed to register
calves for a lower registration fee of $6 per animal, in return
for its promising to register a minimum of 4,000 calves annually
for 1991 and 1992. Mr. Hunsley accepted this proposal.
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