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arranged quickly within the office, without the Partner
having to pay a higher fee while an outside preparer spends
more time to make the arrangements.
Finally, the document warned that there remained a chance that “A
change in tax law or an audit and disallowance by the IRS could
take away all or part of the tax benefits, plus the possibility
of having to pay back the tax savings, with penalties and
interest.”
Prior to petitioners’ investment in the partnership, Mr. Van
Scoten also received from the Hoyt organization a copy of this
Court’s opinion in Bales v. Commissioner, T.C. Memo. 1989-568.
Mr. Hoyt touted the Bales opinion as proof that the Hoyt
partnerships were legal, and that the IRS was incorrect in
challenging their tax claims. Mr. Van Scoten believed that the
Bales opinion meant “basically, that a partnership either similar
to ours or like it was--it had gone to court and the Bales had
won the case. As far as the details about it, I don’t know.”
On January 7, 1991, petitioners signed a document comprised
of four sections in order to invest in the Hoyt partnership known
as Durham Shorthorn Breed Syndicate 1987-C (DSBS 87-C). The
first section was titled “Subscription Agreement -- Durham
Shorthorn Breed Syndicate 1987-C J.V. -- Series ‘A’ Units”. This
section expressed petitioners’ intent to make a capital
contribution to and become a limited partner of DSBS 87-C with
respect to certain “Series ‘A’ Units”. Included in this section
was a “Power of Attorney” form, which provided in relevant part:
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