Ronald F. and Cynthia G. Van Scoten - Page 10

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          Service and will be subject to automatic” and “constant audit”.             
          Statements in the document compared the IRS to children, stating            
          that IRS employees did not have the “proper experience and                  
          training” and “working knowledge of concepts required by the                
          Internal Revenue Code” to evaluate the partnerships.  In a                  
          section of the document titled “Tax Aspects”, the following                 
          “warning” was given:                                                        
               Out here, tax accountants don’t read brands, and our cowboys           
               don’t read tax law.  If you don’t have a tax man who knows             
               you well enough to give you specific personal advice as to             
               whether or not you belong in the cattle business, stay out.            
               The cattle business today cannot be separated from tax law             
               any more than cattle can be separated from grass and water.            
               Don’t have anything to do with any aspect of the cattle                
               business without thorough tax advice, and don’t waste much             
               time trying to learn tax law from an Offering Circular.                
          Despite this warning, the document spent numerous pages                     
          explaining the tax benefits of investing in a Hoyt partnership,             
          and explaining why investors should trust only Mr. Hoyt’s                   
          organization to prepare their individual tax returns:                       
               It is the recommendation of the General Partner, as outlined           
               in the private placement offering circular, that a                     
               prospective Partner seek independent advice and counsel                
               concerning this investment. * * * The Limited Partners                 
               should then authorize the Tax Office of W.J. Hoyt Sons to              
               prepare their personal returns. * * * Then you have an                 
               affiliate of the Partnership preparing all personal and                
               Partnership returns and controlling all audit activity with            
               the Internal Revenue Service. * * * Then, all Partners are             
               able to benefit from the concept of “Circle the Wagons,” and           
               no individual Partner can be isolated and have his tax                 
               losses disallowed because of the incompetence or lack of               
               knowledge of a tax preparer who is not familiar with the               
               law, regulations, format, procedures, and operations                   
               concerning the Partnership that are required to protect the            
               Limited Partners from Internal Revenue audits. * * * If a              
               Partner needs more or less Partnership loss any year, it is            





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