River City Ranches #1 Ltd., Leon Shepard, Tax Matters Partner - Page 32

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          pooling account were then allocated to the various Hoyt entities            
          based on a percentage determined by a pooling committee                     
          administered by Jay Hoyt.  The duration of the pooling account              
          cannot be determined by the record.  During the years at issue,             
          substantial sums were deposited into and withdrawn by check from            
          both the RCR account and the pooling account.                               
               At the end of 1993 or early 1994, the sheep partnerships’              
          promissory notes and share-crop management agreements were                  
          assigned to MLP.  From that point on, MLP was responsible for               
          providing the various functions that were previously the                    
          responsibility of Barnes Ranch.                                             
          C.   Respondent’s Examination Efforts and Enforcement Actions               
               Since approximately 1980, the IRS regularly examined many of           
          the partnership returns of the Hoyt cattle partnerships and the             
          individual returns of their partners.  The IRS also examined the            
          sheep partnerships’ returns and the individual returns of their             
          partners.  Because Jay Hoyt did not maintain separate bank                  
          accounts and accurate accounting records for each of the sheep              
          partnerships, the IRS audited the partnership tax returns as a              
          group.  The IRS generally disallowed the partnership tax benefits           
          that each cattle and sheep partnership and their respective                 
          partners claimed, resulting in those partnerships and partners              
          commencing numerous cases in the Tax Court.                                 
               The Tax Court litigation over the years concerning the Hoyt            






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