Gordon and Ilene Freeman - Page 3

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               Petitioners resided in Richland, Washington, when they filed           
          their petition.  Petitioners have been married for 46 years.                
          Petitioner Gordon Freeman (Mr. Freeman) is an electrical                    
          engineer, and petitioner Ilene Freeman (Mrs. Freeman) has a                 
          bachelor of science degree in home economics education.  At the             
          time of trial, Mr. Freeman was 69 years old.  Mrs. Freeman’s age            
          is not in the record.                                                       
               In 1983, petitioners became partners in Durham Genetic                 
          Engineering, Ltd. 1983-3 (DGE 83-3), a cattle breeding                      
          partnership organized and operated by Walter J. Hoyt III (Hoyt).4           
               From about 1971 through 1998, Hoyt organized, promoted, and            
          operated more than 100 cattle breeding partnerships.  Hoyt also             
          organized, promoted, and operated sheep breeding partnerships.              
          From 1983 to his subsequent removal by the Tax Court in 2000                
          through 2003, Hoyt was the tax matters partner of each Hoyt                 
          partnership.  From approximately 1980 through 1997, Hoyt was a              
          licensed enrolled agent, and as such, he represented many of the            
          Hoyt partners before the Internal Revenue Service (IRS).  In                



               4  Petitioners were also partners in other Hoyt-related                
          partnerships identified as Timeshare Breeding Services 1987-2               
          J.V., Timeshare Breeding Syndicate J.V., and Timeshare Breeding             
          Services 1989-2 J.V.  The details of these partnerships are not             
          in the record. Though unclear, it appears that all adjustments              
          made to petitioners’ income tax liability for 1980-85 were                  
          attributable to their involvement in DGE 83-3 only, while the               
          adjustments pertaining to 1989 and 1990 were attributable to the            
          other partnerships.                                                         





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