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true nature of the investment or that the claimed deductions were
erroneous. Petitioner further stated, in relevant part, as
follows:
The recent conviction of Jay Hoyt establishes that
Dorene had no actual knowledge, and thus no reason to
know, that the claimed deductions were erroneous. The
Hoyt investors were adjudged to be victims of a fraud,
which by definition means they were deceived as to the
nature of their investment and the facts giving rise to
the disallowance of their investment related tax
deductions. * * *
The cover letter attached to petitioner’s administrative appeal
stated that “We will provide additional factual information once
we are contacted by the Appeals Officer.” Petitioner’s case was
assigned to Appeals Officer Leslie Hackmeister.
On or around April 10, 2002, petitioner’s counsel sent
Appeals Officer Hackmeister a letter intended to supplement the
factual and legal arguments of petitioner’s appeal. In the
letter, petitioner’s counsel reiterated that Mrs. Bulger was not
involved with the partnership investment, did not understand the
partnership transactions, and that
She certainly had no substantive knowledge of the
underlying circumstances that caused the deductions to
be denied, i.e., that the Hoyt organization did not
have the 30,000 cattle it claimed it had and the
misappropriation of capital contributions and IRA
funds.
Petitioner’s counsel concluded the letter by again offering
additional information and documentation upon request and stating
that everything “in this discussion can be backed up with
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