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the years at issue equal to the cash payments made by the
partners to the partnerships during those years.
2. Respondent’s Arguments
Respondent contends that the Hoyt sheep partnerships are not
entitled to theft loss deductions for any of the years at issue.
Respondent argues that petitioners have failed to satisfy all of
the requirements under section 165 for deducting a theft loss.
Specifically, respondent asserts that petitioners have failed to
establish: (1) The partnerships, as opposed to the partners,
were victims of a theft; (2) the amount of the alleged theft; (3)
that the alleged theft from each partnership was discovered
during the 1984 through 1996 years at issue; and (4) that no
reasonable prospect for recovery existed during the years at
issue.
Respondent states that in United States v. Barnes, et al.,
No. CR 98-529-JO-04 (D. Or. Feb. 12, 2001), the Government’s
prosecution focused on the activities of Jay Hoyt, other co-
defendants, and the Hoyt organization in promoting and operating
the cattle partnerships, not the sheep partnerships. Hence,
respondent maintains that collateral estoppel and judicial
estoppel are inapplicable, as the Government’s conviction of Jay
Hoyt neither establishes a theft from the sheep partnerships nor
precludes respondent from denying that the sheep partnerships
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