Richard K. and Marilyn J. Phillips - Page 13




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          Mr. Hoyt that his partnership items would be treated as                     
          nonpartnership items.                                                       
          3.  Respondent's Position                                                   
               Respondent contends that Mr. Hoyt was TMP at all times when            
          he executed extensions of the periods of limitations for the Hoyt           
          partnerships.  Respondent contends that section 301.6231(c)-5T,             
          Temporary Proced. & Admin. Regs., supra, is a valid regulation              
          and that, in accordance with the regulation, a taxpayer's                   
          partnership items are not treated as nonpartnership items until             
          the Commissioner notifies the taxpayer that:  (1) He is the                 
          subject of a criminal tax investigation; and (2) his partnership            
          items will be treated as nonpartnership items.  In addition,                
          respondent contends that the facts of Transpac Drilling Venture             
          1982-12 v. Commissioner, supra, are distinguishable from the                
          facts in this case and that the criminal tax investigation of Mr.           
          Hoyt did not create a conflict of interest affecting Mr. Hoyt's             
          duties as a fiduciary of the Hoyt partnerships.                             
          4.  Mr. Hoyt's Status as TMP for SGE 83-2's 1983 Taxable Year               
               As an initial matter, we must decide whether Mr. Hoyt was              
          validly designated TMP of SGE 83-2 for the 1983 taxable year.               
          Petitioners contend that Mr. Hoyt could not have served as SGE              
          83-2's TMP for 1983 because he was not a general partner of SGE             
          83-2 for that year and was not validly designated TMP on SGE 83-            
          2's 1983 partnership return.                                                






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