Hoyt Fiasco: $103M Heist + Kevin Brown's Criminal Cover-up
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     Why did the IRS lead prosecuting attorney in the Hoyt case quit in disgust?

The Hoyt Fiasco: Misconceptions and Allegations vs. the Truth

The following addresses some of the issues being misrepresented in the Hoyt Fiasco. Please note, "the IRS" is not a monolithic body that Hoyt investors are opposing. In fact, there is great disagreement inside the IRS regarding present practices toward the Hoyt investors. People at various levels of involvement are misrepresenting--intentionally or otherwise--the situation to concerned parties such as Senators and judges.

The Misconceptions

The Truth

#1. This is a tax issue, and it should be handled by the IRS. The IRS was in no hurry to handle this issue while knowing investors were unwittingly putting all their savings into a sham designed to absorb those savings.

The only reason "tax issue" enters into this is some people in the IRS are making supreme effort to cast the whole problem in that light. They are making a third party (the victim investors) liable for tax debt resulting from fraud perpetrated by Jay Hoyt.

#2. The Hoyt investors are anti-IRS tax protestors, who deserve whatever they get. The Hoyt investors are victims of a fraud that certain IRS personnel facilitated (in some cases, we know they did so unwittingly). The PDFT and others representing investors do not question the legitimacy of our income tax system--only how the IRS has handled matters pertaining to the Hoyt Fiasco.
#3. Well, they are simply making a lot of noise to get out of a tax bill. They are just like other anti-IRS groups, and their protests should be ignored. The Judge who sent Hoyt to prison for life sent back a message to the government.

He essentially asked the IRS not to blame the victims of Hoyt's massive fraud. He vehemently disagrees that the Hoyt victims should be penalized by IRS-imposed penalties and interest.

Moreover, many people in the IRS are sympathetic to the Hoyt victims. In fact, an IRS attorney who was prosecuting the Hoyt investors quit in disgust over this fiasco.

#4. These people are a fringe group trying to duck their social obligations. Why should the rest of society subsidize them? The IRS feels every citizen has a duty to pay his or her fair share of taxes. We don't care if a bunch of people got excited about a tax dodge and now are excited because they owe the taxes for it. Many of us are in very responsible positions and contribute much to society. See Who we are.

We pay our taxes, and agree about the "fair share" part. Why should someone who  makes $50k a year be forced to pay $125,000 in taxes, penalties, and interest attributed to deductions now disallowed 20 years later? Especially if that person lost his entire  investment in the  deal? This was not a tax dodge. It was a fraudulent investment plan that burned a lot of people. The investors were shown real cattle and real property--many of them even used vacation time to work on the ranches.

#5. They are still a bunch of slackers. Otherwise, they would just pay up. For many investors, the cost of "paying up" is equivalent to assuming a second and then a third mortgage--each as large as the one they have now. They simply cannot do it--especially with the huge hit to their savings caused by Jay Hoyt's fraud.

See Who we are

#6. Hoyt investors are not due a deduction for fraud, because they were not defrauded. A jury found Jay Hoyt guilty of 52 counts of fraud against these same investors. The District Court,  Postal Inspector, and the FBI also agree the investors were defrauded.
#7. Well, OK, we will allow a fraud deduction if you sign a document that allows us to take the money in other ways. Either there was a fraud or there wasn't. A jury trial proved conclusively there was. So did the Postal Inspector and the FBI. The tax code allows taxpayer deductions for theft losses. It does not state "unless you were in an IRS-condoned business arrangement with Jay Hoyt."
#8. The Hoyt investors are seeking general tax relief. The Hoyt investors are seeking intervention from any or all of the 3 arms of the Federal Government to put an end to what many--including a District Court Judge --see as unwarranted and   irresponsible behavior within a government agency.
#9. The fact remains, they got into this scheme because it allowed them to get out of paying taxes. They were out for a free lunch, and now they have to pay their grocery bill. The "tax benefits" of this scheme worked this way:
  1. Jay Hoyt, the Tax Matters Partner, prepared your return, based on business books and records.
  2. If you got a refund, you paid Hoyt 75% of that immediately.
  3. Through the course of the year, you used the other 25% plus additional money, to run the business.
  4. The net "tax benefit"--cash in pocket-- was typically less than if you were not a Hoyt investor.

It was an investment program, condoned by the IRS. Investors were planning for retirement, and never sat at the table of the "free lunch."

Why would anyone invest in a "tax avoidance" scheme that results in more money out of pocket each year than if you didn't invest? This was not a tax avoidance scheme--which is legal, anyhow. Nor was it a tax evasion scheme.

10. Hoyt investors have benefited, at government expense, from tax avoidance. Hoyt investors did not benefit because they were required to pay a substantial portion of their tax refunds to Hoyt.   For the typical investor, the total paid to Hoyt   exceeded the amount deducted on the investor's return.
11. If this was such a bad investment, then anyone who was really in this for investment purposes would have stopped being part of it. True. When investors attempted this, Hoyt told them anyone who walked away would lose every dime invested. For many of these folks, this was a substantial sum. Ultimately, even most of those people "walked away" for financial and other reasons, losing many years of investment.
12. It is the duty of the IRS to secure the money lost via the Hoyt Fiasco. It is the duty of the IRS to ensure proper tax administration. It is not the duty of the IRS to spend $5 for every $1 it can collect in a zealous endeavor that does deep and irreparable harm to innocent victims of IRS "enrolled agent" Jay Hoyt.


Last updated: Friday, October 09, 2020

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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.