Go to Berner Letter
February 4, 1999
Phillips (Petitioners) v. Commissioner of Internal Revenue (Respondent)
Docket No. 9354-96
BR—Hoyt Farms
Judge Goldberg
Curtis Berner (Counsel for Petitioners) Margaret A. Martin (Counsel for IRS)
SECOND STIPULATION OF FACTS
(These are EXCERPTS)
The parties agree to this stipulation of facts pursuant to Tax Court Rule 91. All
stipulated facts shall be conclusive. All stipulated original exhibits shall be considered
authentic. All stipulated copies shall be considered duplicates of the originals as
defined in Fed. R. Evid. Sec. 1001 (4)....
- On or around July 28, 1989, the respondent's Examination Division referred a case
involving Walter J. Hoyt, III (hereinafter "Hoyt") to its Criminal Investigation
Division (hereinafter "CID").
- On October 13, 1989, the United States Attorney’s Office requested CID to review
information to determine whether CID’s agents should join in the United States
Attorney’s Office’s ongoing grand jury investigation of Hoyt.
- On October 17, 1989, CID accepted the Examination Division’s fraud referral
(referenced in paragraph 11 above) for investigations.
- On October 30, 1989, the respondent’s Regional Commissioner approved CID’s
Request for Grand Jury Investigation.
- On November 3, 1989, the respondent’s Regional Counsel Office requested that CID
agents be authorized to participate in the United States Attorney’s Office’s
ongoing grand jury investigation, to investigate potential Title 26 violations.
- CID’s work on the 1989 grand jury investigation was finished no later than October
1, 1990, and probably long before October 1, 1990.
- The 1989 grand jury investigation of Hoyt was declined by the United States
Attorney’s Office and closed on October 2, 1990.
- Jill Page, Group Manager, countersigned consents extending partnership limitations
periods, copies of which are attached to the First Stipulation of Pacts in this case as
Joint Exhibits 28-AP, 29-AC, 30-AD, 37-AK, 38-AL, 3.97AM, 42-AP, 43-AQ, and 44-AQ, on
behalf of the respondent. At the time she countersigned Joint Exhibits 28-AB, 29-AC,
30-AD, 37-AK, 38-AL, 39-AM, 42-AP, 43-AQ, and 44-AR, she had knowledge of the criminal
investigation referenced in paragraph 11 of the First Stipulation of Facts in this case.
At the time she countersigned Joint Exhibits 28-AB, 29-AC, 30-AD, 37-AK, 38-AL, 39-AM,
42-AP, 43-AQ, and 44-AR, she did not have knowledge of any grand jury investigation of
Hoyt. She does not -recall having any knowledge of the existence of the July 28, 1989
Examination referral referenced in paragraph 11 of this Second Stipulation of Facts at the
time she countersigned Joint Exhibits 28-AB, 29-AC, 30-AD, 37-AK, 38-AL, 39-AM, 42-AP,
43-AQ, and 44-AR.
- Tom Ballard, Group Manager, countersigned consents extending partnership limitations
periods, copies of which are attached to the First Stipulation of Facts in this case as
Joint Exhibits 27-AA, 35-AI, 36-AJ, 66-BN, 67-BO, and 68-BP, on behalf of the respondent.
At the time he countersigned Joint Exhibits 27-AA, 35-AI, 36-AJ, 66-BN, 67-BO, and 68-BP,
he had knowledge of the criminal investigation referenced in paragraph 11 of the First
Stipulation of Facts in this case, the July 28, 1989 Examination referral referenced in
paragraph 11 of this Second Stipulation of Facts, and the grand jury investigation that is
referenced in paragraphs 12, 14, 15, 16 and 17 of this Second stipulation of Facts.
- Hoyt timely filed Petitions with this court with respect to all of the Notices of Final
Partnership Administrative Adjustment ("FPAA") referenced in the First
Stipulation of Facts in this case. (The petitioners do not stipulate that Hoyt had the
authority to file such Petitions) All of the Tax Court cases that commenced with the
filing of such petitions were still pending in this Court as of April 17, 1995, the date
that the petitioners' partnership items with respect to SGE 83-2, DSBS 87-E, and TBS J.V.
were converted to nonpartnership items upon the petitioners' filing of a petition in
bankruptcy.
STUART L. BROWN
Chief Counsel
Internal Revenue Service
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