- 14 -
In McKnight v. Commissioner, supra, erroneous items were
attributed entirely to the nonelecting spouse, even though the
electing spouse signed organizational documents relating to the
investment and was listed as a director. We noted that the
spouse signed the documents at her husband’s insistence, after
assurances from him that he was sole owner of the business and
without awareness on her part of the legal significance.
On the facts before us, petitioner more closely resembles
the spouses who were granted relief in Rowe v. Commissioner,
supra, and Buchine v. Commissioner, supra. Petitioner
participated in the Hoyt partnerships in name only. Petitioner
repeatedly objected to Glenn’s involvement in the Hoyt
partnerships. Petitioner never agreed to invest in the Hoyt
partnerships, and petitioner signed Hoyt documents solely because
of Glenn’s representations and insistence and without being aware
of the legal significance thereof.
At no time did petitioner invest any of her funds in the
Hoyt partnerships. Petitioner did not attend any meetings, make
any contact, or read any promotional materials. Glenn made all
payments to the Hoyt partnerships from his separate accounts,
accounts to which petitioner had no access. Mail relating to the
Hoyt partnerships was left unopened for Glenn.
Respondent argues that introductory language in the closing
agreement petitioner entered into with respondent constitutes an
admission by petitioner that she was a partner in and agreed to
Page: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Next
Last modified: November 10, 2007