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organization from 1982 through 1998 by investor-partners in
various investor partnerships, including the partnership RCR #1.
RCR #1, which had been organized and promoted by Mr. Hoyt as
a sheep breeding partnership, had begun operating in 1981. Mr.
Hoyt was responsible for and directed the preparation of RCR #1's
partnership income tax return for 1981, although he may not have
prepared the return personally.
Barnes Ranches was a sheep breeding business owned and
operated by David Barnes and April Barnes. David Barnes had
experience in breeding several breeds of purebred sheep,
including Hampshires, Rambouillets, and Suffolks. Randy Barnes,
who had acquired a degree in agricultural business management in
1985, began working for Barnes Ranches in that year to handle the
sheep breeding and feeding programs. By the late 1980's, David
Barnes, along with Randy Barnes, had acquired very good
reputations in purebred sheep breeding circles and were generally
considered to be among the country’s top breeders of Rambouillet
and Suffolks. During the 1980s, Barnes Ranches typically would
enter annually from 20 to 25 of their best yearling sheep in
various national purebred sheep shows around the country, and
their sheep often won awards at these shows.
Mr. Hoyt and David Barnes created documents that purported
to represent transactions in which RCR #1 purchased sheep from
Barnes Ranches. These documents included a “livestock bill of
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Last modified: May 25, 2011