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benefits that the partners claimed on their individual returns
from the cattle and sheep partnerships; and (2) not issue any tax
refunds these partners might claim attributable to such
partnership tax benefits.
Following respondent’s issuance of prefiling notices to the
partners in February 1993 and the completion of the count and
inspection of the livestock in May or June 1993, the Examination
Division on or about December 30, 1993, issued letters to all the
partners in which it warned them that IRS personnel had concluded
and determined that: (1) A number of fictitious breeding cattle
and sheep had been sold to the Hoyt cattle and sheep
partnerships; and (2) Hoyt and the Hoyt organization had
overstated both the numbers and value of the purported livestock
that the partnerships allegedly owned.
Respondent eventually issued: (1) Notices of deficiency to
numerous investor-partners for the 1980, 1981, and 1982 tax
years, in which respondent determined that none of the tax
benefits the partners claimed from the cattle and sheep
partnerships were allowable; and (2) FPAAs to many of the cattle
and sheep partnerships for the taxable years 1983, 1984, 1985,
and 1986, in which respondent disallowed the tax benefits these
partnerships claimed. On December 20, 1993, respondent issued
FPAAs to RCR #2 for its tax year ending December 31, 1987, to RCR
#3 for its tax years ending December 31, 1987, and September 30,
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