Pamela J. Ellison - Page 6

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          petitioner and Mr. Ellison.  Letters and other documents provided           
          to petitioner and Mr. Ellison by the Hoyt organization referred             
          to petitioner and Mr. Ellison as partners and listed “Don & Pam             
          Ellison” under the heading of partner’s name.                               
               Petitioner and Mr. Ellison received promotional materials              
          from the Hoyt organization about the Hoyt partnerships.  Mr.                
          Ellison kept these materials in his files.  One of the                      
          promotional materials included the following language under the             
          heading Specific Risks Involved:  “A change in the tax laws 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 the tax             
          along with penalties and interest”.  It further stated:                     
               This term [“head torn off”] is crude but, it is a                      
               concept that is very applicable to the comparison of                   
               having a disallowance of your partnership tax                          
               deductions by the Internal Revenue Service.  The                       
               prospect of having to pay the taxes when you have put                  
               your tax money into a tax shelter, and it’s gone, is a                 
               financial wreck.                                                       
          The brochure went on to state that there was no assurance that              
          things would be “O.K.”  In discussing the preparation of investor           
          tax returns, the promotional materials warned “there is a risk”             
          and stated that after many years of experience with tax shelters            
          the Hoyt partnerships have learned how “to deal with IRS audits             
          of the Partnerships’ returns and the Partners’ personal returns,            
          (being ‘attacked’ by the IRS)”.  The promotional materials also             








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