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On December 12, 1991, the IRS met with Hoyt and requested
extensions of the limitations periods for the 1987 and 1988 tax
years for the partnerships. In a letter also dated December 12,
1991, the IRS informed Hoyt that it was considering imposing
return preparer penalties. On December 13, 1991, Hoyt faxed a
letter to the IRS stating that he would agree to sign the
extensions if, and only if, the IRS would agree to extend the
period for assessing any penalties against Hoyt and the other
return preparers. In a letter dated December 18, 1991, the IRS
informed Hoyt that it would not agree to postpone preparer
penalty considerations in exchange for extensions for the
partnerships.
On May 21, 1992, the IRS sent a letter to Hoyt reconfirming
its understanding that Hoyt would not consent to extend the
assessment periods for the various partnerships unless “some way
can be found to extend the assessment period for preparer
penalties currently proposed.”
In June 1992, the IRS and Hoyt reached an agreement whereby
Hoyt consented to extend the limitations periods for the tax
years 1987 though 1989, and the IRS agreed to delay assessing any
preparer penalties for those same years until an FPAA was issued.
After the Bales setback, the IRS decided to conduct a full
headcount of the Hoyt livestock to prove that Hoyt was selling
cattle and sheep to some partnerships that had already been sold
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Last modified: November 10, 2007