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related to the taxable years 1982 through 1987.
FINDINGS OF FACT
Some of the facts in this case have been stipulated and are
so found. The stipulation of facts and the accompanying exhibits
are incorporated herein by reference. At the time the petition
was filed, petitioner resided in Painesville, Ohio.
A. Brief Overview of the Hoyt Organization
From about 1971 through 1998, Walter J. Hoyt III (Jay Hoyt)
organized, promoted to thousands of investors, and operated as a
general partner more than 100 partnerships.4 The partnerships
were organized to own, breed, and manage cattle. Jay Hoyt was
the tax matters partner (TMP) for a majority of the partnerships
and was also an enrolled agent with the Internal Revenue Service
(IRS).
Dating back to the early 1980s, the record-keeping practices
of the Hoyt organization were very poor. During the years at
issue, often no records were kept at all. Many of the documents,
records, and tax returns the Hoyt organization prepared relating
to the cattle partnerships were inaccurate, unreliable, and in
many instances falsified. The Hoyt organization’s poor record
keeping made the IRS’s efforts to examine the partnerships
difficult.
4 For a detailed discussion of the Hoyt organization and
cattle operations see Durham Farms #1, J.V. v. Commissioner, T.C.
Memo. 2000-159, affd. 59 Fed. Appx. 952 (9th Cir. 2003).
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