Pamela J. Ellison - Page 7

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          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.                             






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