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the promissory notes. This trust continued even when the Hoyt
organization switched petitioner’s investment from partnership to
partnership, at times without notifying petitioner or verifying
the status of the promissory notes that had been signed on
petitioner’s behalf. We conclude that petitioner was negligent
in signing the power of attorney forms and in entering into the
investment.
In the years 1986 through 1991, petitioner used the Hoyt
investment to report a total Federal income tax liability of
$4,349 on income totaling $290,149. In addition, petitioner
filed the Form 1045 which purportedly completely eliminated his
Federal income tax liabilities for 1983 through 1985, resulting
in a requested refund of $18,548. Petitioner claimed these tax
benefits based solely on the advice that he received from the
promoters of the investment and from other Hoyt investors--
petitioner never questioned the amounts on the tax returns, and
he never had the returns reviewed by a tax professional.
Furthermore, the promotional materials that petitioner received
had clearly indicated that there were substantial tax risks in
making an investment. Nevertheless, petitioner did not inquire
into the tax claims being made on his tax returns by the Hoyt
organization with anyone outside the organization. This failure
to inquire is especially notable with respect to petitioner’s
1986 return and amended return. In preparing petitioner’s
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