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unclear how this amount of income was calculated or earned.
Attached to the return was a “Material Participation Statement”,
on which petitioner averred that he spent 121 hours during 1991
working in various Hoyt-related activities. The 1991 return was
signed by Mr. Hoyt as the return preparer on June 18, 1992, and
it was signed by petitioner on July 26, 1992.
Starting with the 1986 return and the Form 1045, and
continuing through the 1991 return, Mr. Hoyt or a member of the
Hoyt organization prepared petitioner’s tax forms. Upon signing
the returns, petitioner did not know how the Hoyt-related items
were derived; he knew only that Mr. Hoyt or a member of his
organization had entered the items on the Schedules K-1 and on
the returns, and he assumed the items were therefore correct.
Petitioner did not have the returns reviewed by an accountant or
anyone else outside the Hoyt organization prior to signing them.
The section 6662(a) accuracy-related penalty in this case is
derived solely from the loss that petitioner claimed in 1991 with
respect to DSBS 87-C. Respondent issued a Notice of Final
Partnership Administrative Adjustment (FPAA) to petitioner with
respect to DSBS 87-C that reflected the disallowance of various
deductions claimed on the partnership return for its taxable year
ending in 1991. Because a timely petition to this Court was not
filed in response to the FPAA issued for DSBS 87-C, respondent
made a computational adjustment assessment against petitioner
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