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criminal investigations or ever instructed Mr. Hoyt to say
nothing about such criminal tax investigations.
In addition, the record reflects that the criminal
investigations of Mr. Hoyt ended prior to Mr. Hoyt's execution of
every one of the extension agreements in issue except one. Only
one of the extension agreements for the years in issue,
concerning the 1983 taxable year of SGE 83-2, was executed by Mr.
Hoyt while he was under criminal tax investigation.
In Olcsvary v. United States, 240 Bankr. 264, 266-267 (E.D.
Tenn. 1999), the United States Bankruptcy Court for the Eastern
District of Tennessee stated:
There is no evidence that Hoyt had any contact with the
investigators at all, much less that he executed the
extensions under pressure for leniency. Indeed, since
these tax investigations never resulted in prosecution,
it is possible that Hoyt viewed them with contempt or
haughty disdain rather than fear. * * *
* * * * * * *
The [Court of Appeals] in Transpac did not assume that
the mere existence of an investigation would subvert a
tax matters partner’s judgment and bend him to the
government’s will in dereliction of his fiduciary
duties to his partners. * * *
Mr. Hoyt continued to promote the existing Hoyt partnerships
after the initiation of the criminal tax investigations. Mr.
Hoyt continued to defend his legal position throughout the
criminal tax investigations and continued to maintain that all
partnership items were legitimate, a legal position which was
consistent with that of his partners.
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