Eugene A. Sanders - Page 13

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               Petitioner is a well-educated individual who holds an                  
          undergraduate degree in nuclear engineering as well as an MBA.              
          However, petitioner had no knowledge with respect to cattle                 
          businesses before his Hoyt investment.  Petitioner did not seek             
          professional legal or tax advice before his Hoyt investment.                
          Instead, petitioner relied on Hoyt promotional materials that               
          included articles titled “The 1,000 lbs. Tax Shelter” and                   
          “Harvesting the Tax Code” and which stated that partnership                 
          earnings from various Hoyt partnerships were “tax free” and                 
          “sheltered from income tax”.                                                
               Before filing his 1991 return petitioner received two                  
          separate notices from respondent that Durham was under                      
          examination for the taxable years 1989 and 1990.  In a separate             
          letter, respondent specifically informed petitioner that the                
          examination of Durham “could have a tax effect to your return”.             
          Petitioner also received a letter from respondent before filing             
          his 1991 return which stated that information which had been                
          previously sent to investors from Mr. Hoyt was “misleading and/or           
          inaccurate” and that petitioner should “consider having an                  
          independent accountant or attorney review this matter”.  Despite            
          these notices, petitioner did not make any inquiries with respect           
          to his Hoyt investment or have his 1991 return prepared or                  
          reviewed by an independent tax professional.                                

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