John M. Mekulsia - Page 3

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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            
               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                  

               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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