Montgomery W. Cobb sent me this note in response to my blog post on the Oregon Supreme Court’s rejection of the bar association’s recommended disbarment for his work on the Hoyt cattle-breeding and tax shelter partnerships (In re Montgomery W. Cobb, OSB No. 05-07; SC No. S054584 (Ore. 7/17/08)):

I had not been disbarred, merely accused. The Oregon State Bar appealed a trial panel recommendation for reprimand, and the Supreme Court dismissed the Bar’s complaint entirely. More significantly, the Hoyt litigation has demonstrated the disastrous liability anomalies that TEFRA’s tax reporting structure, and most importantly the powers of the Tax Matters Partner, impose on partners in any form of partnership, but especially the victims of a crooked TMP. E.g., River City Ranches #1 Ltd. v. Commissioner, T.C. Memo. 2003-150, aff’d. in part, rev’d. in part and remanded, 401 F.3d 1136 (9th Cir. 2005); River City Ranches No. 1 v. Commissioner, T.C. Memo. 2007-171; In re Martinez, 366 B.R. 604 (Bankr. E.D. La., 2007), aff’d, United States v. Martinez, 382 B.R. 285 (E.D. La., 2007). I hope that Tax Professonals will take heed, and that legislators will take action.