- 14 - In 1989, petitioners received from the Hoyt organization a copy of this Court’s opinion in Bales v. Commissioner, T.C. Memo. 1989-568. Mr. Hoyt touted the Bales opinion as proof that the Hoyt partnerships were legal, and that the IRS was incorrect in challenging their tax claims. Petitioners read the opinion, and Ms. Hansen believed that “It set a precedent for the ability to be able to use this business to be able to recap depreciation and losses through tax writeoffs.” Despite the fact that neither petitioners nor their partnerships were involved as parties in the Bales case, Ms. Hansen believed that the opinion meant “that the things that needed to be understood that weren’t previously were now understood, that is was a legal operation and that nothing was wrong” with respect to the tax benefits being derived from the Hoyt partnerships. Petitioners made substantial cash payments to the Hoyt organization during the years 1987 through 1997. In a summary of such payments prepared by petitioners, they estimate that the total amount of these payments exceeds $100,000. These payments included the remittance of their tax refunds, the payment of quarterly and monthly installments on their promissory notes, special “assessments” imposed by the partnerships, and contributions to purported individual retirement account plans maintained by the Hoyt organization. Petitioners have not received any of their contributions back from the HoytPage: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Next
Last modified: May 25, 2011