River City Ranches #1 Ltd., Jeffry Bergamyer, Tax Matters Partner - Page 9

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          85-2 was formed pursuant to the laws of Nevada.  From their                 
          inception, all nine sheep partnerships were operated from the               
          Hoyt office in Elk Grove, California.  Several of the                       
          partnerships did not have signed partnership agreements or had no           
          partnership agreements at all.                                              
               From the time each Hoyt sheep partnership was formed through           
          1998, Hoyt was the general partner responsible for all the                  
          management, operation, and promotion functions, and he made all             
          major decisions.  He was also the TMP of each partnership.7                 
               In the early 1980s, Hoyt had formed so many investor                   
          partnerships that the documents, records, and tax returns of the            
          partnerships were inaccurate, unreliable, and in many instances             
          falsified.  For the years at issue, often no records were kept.             
               As the general partner managing each sheep partnership, Hoyt           
          was responsible for and directed the preparation of the tax                 
          returns of each partnership, and he typically signed and filed              
          each tax return.  However, Hoyt did not maintain separate bank              
          accounts or bookkeeping and accounting records for each of the              
          sheep partnerships.  From 1981 until sometime in 1990, checks               
          from the sheep partners were deposited in one checking account.             

               7By orders of the Tax Court issued from June 22, 2000,                 
          through May 15, 2001, Hoyt was removed as TMP from the sheep                
          partnerships.  Hoyt was also a licensed enrolled agent who                  
          represented many of the investor-partners before the IRS.  In               
          1997, the IRS removed Hoyt as an enrolled agent for alleged                 
          improprieties relating to his individual income tax returns.                

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Last modified: November 10, 2007