- 7 - advised prospective investors to get “expert tax help” concerning the Hoyt partnerships. The promotional materials further stated: “If a Partner needs more or less Partnership loss to be special[ly] allocated to him for any year, it is arranged quickly within the same office, without the Partner having to pay a higher fee while an outside preparer spends more time to make the arrangements.” The promotional materials clearly contemplated the tax shelter being audited by the IRS--stating at one point: “we know we will be subject to constant audits by the IRS”. Other documents petitioner and Mr. Ellison received from the Hoyt organization contained the following statements under the heading “Federal Income Tax Related Risks”: Special tax counsel to the Partnership has not provided any opinion with respect to IRS recognizing the Partnership as a Partnership for tax purposes, the deductibility or treatment of any particular item, the proper percentages for allocating Partnership profits, losses, gains, deductions or credits among Partners, the fair market value of the purchased Registered Shorthorn Cattle or the amount of allowable income, credit, or losses that may be generated by the Partnership. NO ASSURANCE CAN BE GIVEN THAT THE IRS WILL NOT ATTEMPT TO TREAT THE PARTNERSHIP AS A TAX SHELTER, or whether such attempt to treat the Partnership as a tax shelter would not be successful. Moreover, because the Partnership has not requested a ruling from the IRS with respect to any of the tax consequences of the Partnership, there is an inherent and substantial risk that such benefits might be challenged in whole or in part by the IRS.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