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section 6662(h) of $4,442 and $6,932, respectively.1 After
concessions,2 the only issues for decision are: (1) Whether
petitioner is liable for 40-percent accuracy-related penalties
under section 6662(h); and (2) in the alternative, whether
petitioner is liable for 20-percent accuracy-related penalties
under section 6662(b)(1) or (2).
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The first, second, and third stipulations of fact and the
attached exhibits are incorporated herein by this reference.
Petitioner resided in Escondido, California, when he filed his
petition.
A. Hoyt and the Hoyt Partnerships
The issues in this case revolve around petitioner’s
investment in a partnership organized and promoted by Walter J.
Hoyt III (Hoyt). Hoyt’s father was a prominent cattle breeder.
To expand his business and attract investors, Hoyt’s father
started organizing and promoting cattle breeding partnerships in
the late 1960s. Before his father’s death in early 1972, Hoyt
1 All section references are to the Internal Revenue Code,
as amended, and all Rule references are to the Tax Court Rules of
Practice and Procedure. Amounts are rounded to the nearest
dollar.
2 Petitioner concedes that: (1) He did not realize any
farm income in 1994 and 1995; and (2) he is not entitled to the
deductions claimed on Schedules F, Profit or Loss From Farming,
attached to his 1994 and 1995 Federal income tax returns.
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