- 31 -
no indication of wrongdoing by Mr. Hoyt, and that an “average
taxpayer” was unable to discover this wrongdoing. As we have
held, any reliance by petitioner on materials provided by the
Hoyt organization and its partners was not objectively
reasonable. Petitioner, however, argues that his investigation
went further than the Hoyt promotional materials and other Hoyt
partners.
Petitioner’s testimony at trial concerning his investigation
into the partnership can be summarized as follows. After
acquiring the informational packet from the Hoyt organization,
petitioner mailed the packet to his father so that his father
could show it to a tax professional. Petitioner’s father
subsequently told petitioner that “The attorney looked over it
and he said there was nothing illegal.” In addition, one of the
group of petitioner’s coworkers who was also interested in
investing decided to contact the IRS for information. This
coworker told petitioner that “there was no indication from the
IRS that there was anything wrong with Hoyt or anything like
that.” Finally, a second coworker traveled to California “to go
to their [Hoyt’s] offices and also * * * to at least one ranch to
be sure that it was a viable business and that there was actually
people running a business and there was actually cows involved.”
Assuming arguendo the veracity of petitioner’s version of
events, we do not find that petitioner reasonably relied upon any
Page: Previous 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 NextLast modified: May 25, 2011