- 68 - And, contrary to petitioners’ assertion that the traditional elements of equitable estoppel have been met, thus warranting a departure from the year of discovery requirement in section 165(e), the record reflects that respondent did not misrepresent or conceal from the partnerships or the partners any material facts obtained in the audits. Respondent audited the various partnerships from 1984 through 1996, and reported its findings to the partnerships and partners. Respondent issued all notices of beginning of administrative proceeding, FPAAs, and prefiling notices in a timely manner in accordance with the Internal Revenue Code. According to petitioners, respondent “advised the partners that their partnerships were being audited and adjusted, because [respondent] determined the partnerships were shams and constituted improper tax shelters.” Petitioners, nonetheless, fault respondent for not doing more to stop the fraud perpetrated by Jay Hoyt. They assert that respondent, well before 1993, should have acted more effectively to protect the partners and prospective investors from Jay Hoyt’s fraudulent activities. Our review of the record discloses the substantial difficulties that respondent encountered in obtaining a sufficient amount of information to conclude the existence of a fraud prior to 1993. By the early 1980s, respondent generally disallowed the tax benefits the cattle and sheep partnerships and their partnersPage: Previous 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 Next
Last modified: May 25, 2011