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Hoyt and the Hoyt organization provided the investor-partners.
Respondent ultimately issued FPAAs to the cattle and sheep
partnerships for post-1986 taxable years, in which respondent
disallowed the tax benefits these partnerships claimed for those
years. These partnerships then commenced numerous Tax Court
cases for a redetermination of the FPAA adjustments.
On June 22, 1999, this Court issued its opinion in River
City Ranches #4, J.V. v. Commissioner, T.C. Memo. 1999-209, a
test case sustaining respondent’s disallowance of all tax
benefits claimed by three sheep partnerships. On May 18, 2000,
this Court issued its opinion in the Durham Farms #1, J.V. v.
Commissioner, T.C. Memo. 2000-159, a test case in which the Court
disallowed almost all tax benefits that seven cattle partnerships
claimed. In light of these holdings and the mounting evidence,
petitioners conceded the various partnership adjustments,
choosing to focus on the issues raised in their amended petition.
D. Governmental Investigations of Jay Hoyt
After the initial IRS examinations of the many cattle and
sheep partnerships, several investigations by various Government
agencies were commenced relating to Jay Hoyt’s activities.
From 1984 through 1986, the IRS’s Criminal Investigation
Division (CID) conducted an investigation of Jay Hoyt for
allegedly backdating documents to enable 12 investor-partners to
claim improper deductions and credits for 1980, 1981, and 1982.
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