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March 4, 1999

Certified Mail – Return Receipt Requested
W. Val Overson
National Taxpayer Advocate
Department of the Treasury
Internal Revenue Service
1111Constitution Avenue, NW
Room 3017-C:TA
Washington, D.C. 20224

Re:

Your February 3, 1999 Memorandum
For Regional Taxpayer Advocates
District Taxpayer Advocates
Re: Hoyt Investments

Dear Mr. Oveson,

I received a copy of the above-referenced memorandum, a copy of which is attached for your reference. In the first paragraph you state, in part:

One issue raised by the investors and practitioners in their correspondence is that the IRS allowed Mr. Hoyt to continue as the Tax Matters Partner "even though it is alleged that we knew there was a conflict of interest for him to do so." (Emphasis added)

This is much more that an allegation. The Commissioner has admitted in writing that his representatives knew Mr. Hoyt was under IRS CID criminal investigations at the time they signed counterparts of the extensions to the statute of limitations for some of the taxable years and for some of the partnerships that are in issue in Phillips v. Commissioner, Docket No 9354-96. A copy of a Second Stipulation of Facts signed by the Commissioner’s counsel containing those admissions (see Paragraphs 19 and 20) is also attached.

The parties in the Phillips’s case have filed a motion under Rule 122 of the Rules of Practice and Procedure of the United States Tax Court to submit the case for decision on a fully stipulated basis: no trial will be held. We are now waiting for the Court to provide a briefing schedule. I anticipate a decision will be made before the end of the year.

Please call me if you have any questions

Sincerely,

Curtis W. Berner

 Cc w/o encl:

Mr. and Mrs. Phillips
Mrs. Joyce Heard
Monty Cobb, Esq.

Go to Second Stipulation of Facts