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In River City Ranches II, the Court of Appeals held that the
partnerships were entitled to discovery of respondent’s central
Hoyt files to find out the facts concerning Hoyt’s interests in
his dealings with respondent and what respondent knew about
Hoyt’s interests and his treatment of the partners’ interests.
River City Ranches #1 Ltd. v. Commissioner, 401 F.3d at 1141,
1143.
Pursuant to the mandate of the Court of Appeals, we granted
petitioners’ motions to take the depositions of Jill Page, Sue
Hullen, and Norman Johnson, present or former IRS employees whom
petitioners had called as witnesses during the 2001 trial of
these cases. Petitioners took their depositions in April 2006.
In order to make further information available to petitioners,
respondent went beyond the Court of Appeals’ direction regarding
limited additional discovery and made available to petitioners
his entire store of documents that had not been produced earlier.
This consisted of approximately 160 boxes of documents and 700
linear feet of IRS central Hoyt files.
After the discovery sought by petitioners was completed, the
Court held a second trial on September 11 and 12, 2006.
A. Waivers Executed by Hoyt in March 1993 Are Invalid
In River City Ranches I, we analogized these cases to
Phillips v. Commissioner, 272 F.3d 1172 (9th Cir. 2001), affg.
114 T.C. 115 (2000), in which the Court of Appeals held that the
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Last modified: November 10, 2007