Dorene Bulger - Page 6

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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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