John M. Mekulsia - Page 7

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               On at least four separate occasions, from April 1984 through           
          September 1995, Jay Hoyt was under criminal investigation for               
          violation of the internal revenue laws.  Respondent never                   
          notified Jay Hoyt that he was under criminal investigation or               
          removed him as the TMP of Shorthorn Genetic Engineering 1985-1              
          (SGE) as a result of any of these criminal tax investigations.              
          C.  Petitioner’s Involvement With the Hoyt Organization                     
               Starting in 1985, petitioner began investing in cattle                 
          partnerships promoted by the Hoyt organization.  According to the           
          petition filed in this case, petitioner was a partner in SGE,               
          Timeshare Breeding Syndicate, J.V., and Timeshare Breeding                  
          Syndicate 1987-2.  As the interest of which he seeks abatement in           
          this case accrued on assessments of income tax against petitioner           
          for tax years 1982 through 1987, solely on the basis of his                 
          participation in SGE during 1985 and 1986, our analysis is                  
          limited to the tax implications of petitioner’s association with            
          the SGE partnership only.                                                   
               Petitioner was a partner in SGE from 1985 through 1996.  SGE           
          was a partnership subject to the provisions of sections 6221                
          through 6233.5  On SGE’s 1985 and 1986 partnership tax returns,             
          Jay Hoyt was designated the TMP.                                            

               5  The unified partnership audit and litigation provisions             
          of secs. 6221-6223 were first enacted as part of the Tax Equity             
          and Fiscal Responsibility Act of 1982, Pub. L. 97-248, sec.                 
          402(a), 96 Stat. 648, and are generally applicable to partnership           
          taxable years beginning after Sept. 3, 1982.                                

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