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7/22/92 (Excerpts Only)(Settlement Committee Efforts)

Memo from Drobny Law Office (partners settlement committee attorney)

To: Raymond Spillman (District Director, Internal Revenue Service).

Thank you for your letter of July 16, 1992, responding to my letter of June 19, 1992. Unfortunately, your letter raised some serious concerns on my part which I will outline below.

My initial contact with Chris Coones of Appeals appeared to be promising: Mr. Coones indicated to me that this is what he had hoped for, for the past two (2) years: face-to-face negotiations with Hoyt Investors, independent of Walter J. Hoyt, III.

All of this time and resourceswere invested in a good faith attempt to come to a complete resolution, in reliance on the IRS dealing in good faith.

Unfortunately, it is now clear that theIRS was not negotiating in good faith. In fact, it is now clear that while the IRS has purported to be "negotiating" with my clients, the IRS’s intent all along has been to accept nothing less than the terms of their current offer.

That is not negotiating- what does the IRS think my clients will do, enter into negotiations that result in theirpaying more?

Evidence of (2) above is clear. On June 11, 1992, my clients essentially had the door slammed in their face.

Suddenly, discussions began anew!

Again, we secured Mr. Hoyt’s comments to meet face-to-face with the Appeals personnel on Friday, July 17, 1992.

Then, after my clients secured those commitments from Mr. Hoyt, William McDevitt prepared a letter to the investors dated the day before Mr. Hoyt’s scheduled meeting advising all of the investors that the Settlement Committee’s offers and efforts are unacceptable and that the investors have to either accept the current IRS offer, or go to trail. In addition, Mr. McDevitt did not ever have the courtesy of advising the Committee that he was terminating negotiations, before mailing his letter dated July 16, 1992 to all Hoyt Investors.

Very truly yours.

Mark S. Drobny

7/24/92

LETTER OF INTENT

I WALTER J. HOYT III, hereby state that:

1. I am the Tax Matters Partner for the Hoyt Partnerships involved in the litigation currently pending before the United States Tax Court.
2. I understand that the Hoyt Partners’ Settlement Committee is negotiating with the Internal Revenue Service on behalf of investors in Hoyt Partnerships to settle all tax issuesfor all good faith partners in all Hoyt partnerships for all tax years through 1991.
3. If the Settlement Committee reaches an agreement with the Internal Revenue Service on a settlement, then I as Tax Matters Partner and General Partner will agree to:

1. Sign the Settlement Agreement in my capacity as Tax Matters Partner for the Hoyt Partners.
2. Assist in securing the acceptance of this offer by the pre-TEFRA partners.
3. Not provide any legal counsel via the partnerships on behalf of any partner for any Tax Court litigation.
4. Refrain from marketing any type of "tax shelter" in the future.
5. Surrender my Enrolled Agents License.
6. Make available all partnership records to determine amounts invested by the partners.
7. Be assessed preparer penalties under IRC Section 6701

(Signature)

Walter J. Hoyt III

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A Hoyt Victim's Advice

The following is advice from a victim of Kevin Brown's Hoyt Fiasco. Kevin Brown is the rogue IRS agent who can't explain where the $103 million "disappeared to" but who abused his position and his authority to silence the innocent victims of the Fiasco. He was so over the top with this that his lead prosecutor quit in disgust.

My experience with the IRS, as mismanaged by Kevin Brown (who has subsequently left to do damage elsewhere), taught me some lessons.

1. Never trust the IRS. If they provide you something in writing, there's no guarantee they will honor that later. In regard to the Hoyt Fiasco victims, they went back on their written guarantees and promises many times. They'll tell you that there's no problem with your personal return, while licking the flap on the envelope that contains instructions for severe actions against you.
   
   The GAO found that IRS employees stole 4300 computers from their own offices in a single year. Further, the GAO looked at the personal income taxes of IRS employees who work in Collections and characterized the level of tax cheating as "staggering." Do not trust the IRS. Ever.
    

2. Don't give them a tax-based reason to unleash their vast resources on you; stay current with your 1040 taxes. That doesn't mean just mail in your returns; with that, they can claim you aren't current and you have no proof. Always enclose a check for a dollar (so when they deposit it, you have proof they opened something you sent) and always send via a method that requires proof they received it.
    

3. Do not expect the IRS to follow the Tax Code. Most of the people reviewing your case aren't even familiar with the Tax Code. If you quote them chapter and verse, they will ignore that. Do not expect them to follow logic, either. They are like the Borg; they get their programming and keep on coming.
    

4. Do not talk to the IRS about any alleged tax debt. You may get some seemingly friendly person on the phone. That person's sole purpose in talking with you is to milk you for information that can be used to hurt you. Don't think they can't trick you, they can and they will. Refuse to talk with them except through an attorney. If the IRS person starts threatening you for not talking, hang up on that person.
    

5. Keep notes. Note the date, subject, and key facts of any communication with these people. They will make things up in court, but if you have notes you can at least stop from losing a "he said / she said" contest.
    

6. Don't respond to their mailings. I followed the bad advice of "experts" and responded to every fishing trip the IRS went on. The IRS can't legally demand from you information they already have. So there's no need to send them a tax filing you've already sent. If they demand you fill out a 433A, understand that they will use it to hurt you. It cannot possibly help you to fill it out. Let them do what they think they have to do, but without your additional self-destructive assistance. If you really do feel so intimidated that you "need to" respond, have an attorney do that for you. It makes a huge difference and is worth the cost. But don't use Mark Rosenbloom (a Chicago attorney).
    

7. Don't bother contacting your misrepresentatives in the House or the Senate. If they actually represented voters, there would not be an IRS. Its actual tax function administration could easily be done by a single federal employee working part-time (simply have the states collect all taxes, just as they collect taxes now, and 50 states--rather than millions of individuals--deal with the federal govt ). The large IRS machinery serves quite another purpose, and it's not one we should be proud of.

Disclaimer: The facts represented here are as accurate as a reasonable investigation can determine. Mindconnection hosts this site at no charge to the Hoyt victims, to expose this miscarriage of justice.

Questions, problems? Want to render assistance?
Write to hoyt @mindconnection.com (paste this address into your e-mail program, and delete the space).

Hoyt Fiasco site homepage | Mindconnection homepage

Disclaimer: The facts represented here are as accurate as a reasonable investigation can determine. Mindconnection hosts this site at no charge to the Hoyt victims, to expose this miscarriage of justice.