- 12 -
1995, the joint returns and the separate returns filed by
petitioner were prepared by Mr. Hoyt or one of his tax services.
In 1981, petitioner and Mr. Barnes met with Mr. Hoyt
concerning a possible investment in a Hoyt investor partnership.
Mr. Barnes had known Mr. Hoyt for many years prior to the time
that petitioner and Mr. Barnes made their investment in 1981, and
Mr. Barnes knew that Mr. Hoyt had been involved in cattle
ranching. Prior to her meeting with Mr. Hoyt, petitioner
believed that David Barnes was interested in raising sheep and
that he was interested in expanding what essentially was his
hobby into a commercial sheep ranching operation. Petitioner
believed that David Barnes was working with Mr. Hoyt in
developing a business related to sheep ranching, and petitioner
knew that David Barnes wanted petitioner and Mr. Barnes to speak
with Mr. Hoyt about this business. As a result of the 1981
meeting, petitioner and Mr. Barnes made the decision to invest in
one of the sheep partnerships organized and promoted by Mr. Hoyt,
namely RCR #1. Petitioner and Mr. Barnes did not invest any cash
at the time they initially decided to make the investment.
Instead, the invested funds were obtained using the tax refunds
that Mr. Hoyt helped secure by preparing tax forms for petitioner
and Mr. Barnes. Petitioner and Mr. Barnes agreed that Mr. Hoyt
would retain 75 percent of the tax refunds that they were to
receive, and that petitioner and Mr. Barnes would receive the
Page: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 NextLast modified: May 25, 2011