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joining those ventures because they failed to investigate the
legitimacy of the ventures with someone independent of those
ventures), affd. 439 F.3d 1243 (10th Cir. 2006).
Petitioner knew that the Hoyt organization had labeled any
investment in a Hoyt partnership a “speculative investment” and
that the Commissioner considered the Hoyt partnerships to be tax
shelters that had to be registered and reported as such.
Petitioner also knew when he joined TBS 89-1 that the Hoyt
organization would be acting with and for him to claim refunds of
his Federal income taxes and that he had to pay 75 percent of any
tax refund to the Hoyt organization. Petitioner also knew when
he joined TBS 89-1 that he could receive preferential tax
allocations for any given year simply by asking the Hoyt
organization for such allocations. In the light of petitioner’s
background and his lack of experience and knowledge of the cattle
ranching business, and the questionable content of the
promotional materials, petitioner was required to perform a
meaningful investigation of TBS 89-1 before claiming any tax
benefits purportedly flowing therefrom. We find that he did not.
While petitioner stresses that he investigated the Hoyt
partnerships by visiting the Hoyt operation before and during his
participation in TBS 89-1, the fact of the matter is that such
visits do not replace the requirement in this case that
petitioner have consulted an independent professional adviser
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