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89-1. The $1,800 may or may not have been related to
petitioner’s participation in TBS 89-1.
For 1988, 1989, 1990, and 1991, petitioner received Federal
income tax refunds as follows:
Year Refund Amount Date Refund Issued
1988 $10,714 May 29, 1989
1989 1,423 July 9, 1990
1990 3,850 July 29, 1991
1991 4,053 Nov. 2, 1992
5. Documents From the Internal Revenue Service
Before signing his 1991 tax return, petitioner received
notices of beginning of administrative proceeding (NBAP)
informing him that the Commissioner was examining the 1988, 1989,
and 1990 taxable years of DSBS 87-C. Petitioner never took any
of the NBAPs to a tax professional independent of the Hoyt
organization, e.g., to inquire about its significance. Before
signing his 1991 tax return, petitioner also received two letters
from the Internal Revenue Service, containing information
regarding material participation and section 469.
6. The Bales Memorandum Opinion
The case of Bales v. Commissioner, T.C. Memo. 1989-568,
pertained to Hoyt cattle partnerships (not including TBS 89-1)
and their 1974 through 1981 taxable years. The Court in Bales
decided that those partnerships were not shams. After Bales was
decided, Hoyt promoted the Hoyt partnerships to prospective
participants by referring to the case.
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