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Before petitioner and Mr. Abelein invested in the Hoyt
partnerships, Mr. Abelein prepared the returns himself or had a
tax return preparer or accountant prepare the returns. After
petitioner and Mr. Abelein invested in the Hoyt partnerships, the
Tax Office of W.J. Hoyt Sons Management Company prepared their
returns. When Mr. Abelein received the completed returns from
the Hoyt organization, he looked over the returns and signed
them. Petitioner also signed the returns. Petitioner knew she
was not allowed to deduct expenses on the returns that she did
not incur and that it was important to review the returns before
she signed them. Mr. Abelein did not threaten petitioner to
obtain her signature on the returns.
Petitioner could identify the Hoyt-related items on their
1985 and 1986 returns. Petitioner even asked Mr. Abelein about
the numbers on their 1985 Form 3468, Computation of Investment
Credit, which accompanied their 1985 tax return, because she did
not understand where they came from. In later years, petitioner
asked Mr. Abelein other questions about the effect of the
investment on their tax returns, including “How can you legally
go back on your taxes?” and “How can you have so many deductions
when you really don’t have that many kids?”
The Hoyt Partnership Litigation and Settlement
The Commissioner initiated audits of the Hoyt partnerships,
including but not limited to DGE, and sent appropriate notices to
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Last modified: May 25, 2011