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these partnerships was Timeshare Breeding Service 1989-1 (TBS).
Hoyt was TBS’s general partner and tax matters partner, and TBS
was subject to the unified audit and litigation procedures of the
Tax Equity and Fiscal Responsibility Act of 1982, Pub. L. 97-248,
sec. 402(a), 96 Stat. 648. Hoyt was convicted on criminal
charges relating to the promotion of TBS and other partnerships.
Petitioners’ claim to losses and credits passing to them
from TBS resulted in the underreporting of their 1989 taxable
income.5 On October 22, 2002, respondent mailed to petitioners a
Letter 1058, Final Notice of Intent to Levy and Notice of Your
Right to a Hearing. The notice informed petitioners that
respondent proposed to levy on their property to collect Federal
income tax (and any related amount) that they owed for 1989. The
notice advised petitioners that they were entitled to a hearing
with Appeals to review the propriety of the proposed levy.
On November 18, 2002, petitioners asked Appeals for the
referenced hearing. On January 11, 2005, Linda Cochran
(Cochran), a settlement officer in Appeals, held the hearing with
petitioners’ counsel. Cochran and petitioners’ counsel discussed
two issues. The first issue concerned petitioners’ intent to
offer to compromise their 1987 through 1998 Federal income tax
5 Petitioners’ claim to losses and credits passing to them
from other Hoyt partnerships was the subject of an affected items
proceeding in this Court. See Hansen v. Commissioner, T.C. Memo.
2004-269, affd. 471 F.3d 1021 (9th Cir. 2006).
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