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because respondent has taken “clearly inconsistent” positions
from those taken in the criminal prosecution of Jay Hoyt.
Petitioners assert that while the total amount of restitution
ordered in the judgment against Jay Hoyt establishes the amount
of the theft, respondent takes the position that petitioners have
not proven the amount of theft for the years at issue. Further,
petitioners claim that respondent should not be allowed to
contest that Jay Hoyt is “guilty of fraud on a massive scale”.
According to petitioners, the “integrity of the judicial process
would suffer if the IRS were allowed to make the absurd claim
that Hoyt did not defraud petitioners.”
The Court is not persuaded that respondent has taken any
inconsistent positions with respect to the conviction of Jay
Hoyt. As previously stated throughout this opinion, petitioners
have failed to establish that they were defrauded of the amounts
alleged as theft losses. Further, Jay Hoyt’s conviction does not
establish thefts from the partnerships for any of the years at
issue. Respondent does not argue that Jay Hoyt is innocent of
fraud in inducing the investors to contribute cash to the
partnerships; respondent instead takes the position that the
partnerships were not the victims of that fraud. Respondent’s
position is consistent with that of the Government in the
criminal prosecution of Jay Hoyt, that the victims of his fraud
were the individual investors.
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