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before the Internal Revenue Service (IRS) until he was
disenrolled as an enrolled agent in 1998.
Beginning in February 1993, respondent generally froze and
stopped issuing income tax refunds to partners in the investor
partnerships. The IRS issued prefiling notices to the investor-
partners advising them that, starting with the 1992 taxable year,
the IRS would disallow the tax benefits that the partners claimed
on their individual returns from the investor partnerships, and
the IRS would not issue any tax refunds these partners might
claim attributable to such partnership tax benefits.
Also beginning in 1993, an increasing number of investor-
partners were becoming disgruntled with Mr. Hoyt and the Hoyt
organization. Many partners stopped making their partnership
payments and withdrew from their partnerships, due in part to
respondent’s tax enforcement. Mr. Hoyt urged the partners to
support and remain loyal to the organization in challenging the
IRS’s actions. The Hoyt organization warned that partners who
stopped making their partnership payments and withdrew from their
partnerships would be reported to the IRS as having substantial
debt relief income, and that they would have to deal with the IRS
on their own.
On June 5, 1997, a bankruptcy court entered an order for
relief, in effect finding that W.J. Hoyt Sons Management Company
and W.J. Hoyt Sons MLP were both bankrupt. In these bankruptcy
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Last modified: May 25, 2011