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Mr. Van Scoten had no investment experience. Although Mr. Van
Scoten had lived on a family farm for approximately 2 years,
neither petitioner had experience in cattle ranching. Because he
trusted his father’s advice, Mr. Van Scoten did not personally
investigate the partnership. While Mr. Van Scoten relied on his
father’s advice concerning the Hoyt investment, he did not review
his father’s partnership documents, and he was unaware in which
partnership his father had invested.
At the time that petitioners initially made their
investment, Mr. Van Scoten believed that the investment would
produce a profit and provide retirement income. Mr. Van Scoten
understood that the investment generally required petitioners to
remit 75 percent of the Federal income tax refunds that they
received and that petitioners were to retain the remaining 25
percent. Before investing in the Hoyt partnerships, petitioners
did not consult with anyone other than members of the Hoyt
organization and investors in Hoyt partnerships--for example,
they did not consult with cattle ranchers, independent investment
consultants, or independent tax advisers--concerning either the
partnerships or the tax claims made by the partnerships.
Prior to investing, petitioners received promotional
materials prepared by the Hoyt organization. Petitioners relied
3(...continued)
the first year we invested” was 1990, the documentary evidence
shows that the investment was in fact made in January 1991.
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