- 6 -
investment in the partnership. Petitioner inquired whether that
was legal, and Mr. Hoyt assured her that it was. Petitioner
asked other questions of Mr. Hoyt during this meeting, but she
felt as though many of her questions remained unanswered.
Mr. Hoyt provided petitioner and Mr. Capehart with a packet
of promotional materials relating to the Hoyt partnerships. The
materials included a document entitled “The 1,000 lb. Tax
Shelter, A ROUND-UP OF DATA AND A QUICK COURSE IN CATTLE BREEDING
TAX SHELTERS”, which stated in pertinent part: (1) “SPECIFIC
RISKS INVOLVED * * * A change in the tax law or an audit and
disallowance by the IRS could take away all or part of the tax
benefits, plus the possibility of having to pay back the tax
savings, with penalties and interest”; (2) “we know we will be
subject to constant audits by the IRS”; and (3) “If you don’t
have a tax man who knows you well enough to give you specific
personal advice as to whether or not you belong in the cattle
business, stay out.” Mr. Capehart reviewed the documents, but
petitioner chose not to.
Petitioner was skeptical about investing in the partnership,
so she had one of her clients from the bank, who was an attorney,
review the partnership and subscription agreement. Petitioner
did not give the attorney any of the promotional materials to
review. The attorney advised petitioner that the agreement
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011