October/November/December $2.50 2012 ARIZONA THOROUGHBRED 2013 STALLION REGISTRY Hidden Springs Ranch October/November/December 2012 • Issue IV The Power of the IRS Commissioner 4-5 ATBA SALE © 2010 by The Arizona Thoroughbred Breeders Association Incorporated P.O. Box 41774, Phoenix, Arizona 85080 Dorsal Displacement of the Soft Palate 6-7 Our congratulations to Jerry Engelauf and Dr. Simon Hudy on the sale of Hip # 48 and Hip # 98. Telephone: (602) 942-1310 • Fax: (602) 942-8225 ATBA offices are located at 1501 West Bell Road, Phoenix, Arizona, 85023. Good luck to the buyers, Karl Myers, Mark Breen and agent Kevin Eikleberry. The Arizona Thoroughbred is published quarterly In Memory of Ralph Andersen 9-11 (annually publishes a Stallion Registry) in Phoenix, Arizona by the Arizona Thoroughbred Breeders We appreciate all buyers and consigners that participated in this years sale. Association, a non-profit corporation, dedicated to the production of better Arizona-Bred Thoroughbred horses In Memory of Lyman Rollins 12-13 for better Arizona Thoroughbred racing. Opinions expressed in signed articles are those of the BREEDERS CUP authors and do not necessarily reflect policies of the ATBA or this magazine. Publication of any material originating herein is expressly forbidden without ATBA Fall Sales Stakes - Lewiston 14-15 Congratulations to MERIT MAN and his team on running second in the Juvenile Sprint. first obtaining written permission from The Arizona Thoroughbred. All advertising copy is submitted and subject to Owners, Bruce Chandler, Purple Shamrock Racing and Double Kee, LLC. approval. We reserve the right to reject any copy that is ATBA Fall Sales Stakes (Fillies) - Youbetshewon 16-17 misleading or that does not meet with the standards set by this publication. Trainer Bob Hess Advertising rates supplied upon request. ATBA Fall Yearling & Mixed Sale 18-21 ATBA Princess of Palms Stakes - Page Springs 22 OFFICERS - President: Dennis Grenier Vice-President: Kevin Owens Treasurer/Secretary: Wende Macumber Track Talk 24 DIRECTORS - Kids Korner 25 John Campo III, Michael Chambers, Ron Chappell, Frank Covello, Marvin Fleming, Shawn Haggstrom, William Matthews, Jan Arizona-bred Winners 28-29 Osborn, Scott Rollins, Lee Vaughn, Dave Williams and R. C. “Rink” Williams. ATBA Sale Winners 30-31 ATBA ADMINISTRATIVE STAFF - Executive Director: Dove Ward Arizona Stallion Standings 34-35 Arizona-Bred Registry: Berdette Felipe Associate Editor: Dove Ward Advertising: A.T.B.A. Office Calendar 36 Advertising Index 36 CONTRIBUTORS - BLOODSTOCK RESEARCH 2013 Stallion Registry 37 COADY PHOTOGRAPHY A very special Thanks to our clients whom continue to have faith in our operation. JOHN ALAN COHAN DR. PATRICIA PROVOST THE JOCKEY CLUB We sincerely appreciate all of you. PAULA WELCH PRATHER On the Cover DEBBIE ZIMMERMAN Merry Christmas and Happy New Year! SUBSCRIPTIONS - BOARDING * TRAINING * SALES PREP * FOALING * SWIMMING $15.00 annually domestic; $24.00 foreign 602-381-8800 * 928-427-9424 * 602-622-8007 * thehiddensprings.net * [email protected] 2 Arizona Thoroughbred October/November/December October/November/December Arizona Thoroughbred 3 Hidden Springs Ranch.indd 1 11/20/12 9:16 AM _________________________________________________________________________________________ With respect to payment to vendors and trainers, it is often the case in the horse industry that some The Powers of the IRS vendors and trainers do not issue formal invoices, but you should always insist on obtaining invoices Commissioner from trainers and other personnel and vendors, and keep them as part of your permanent records. You should maintain a dated customer list consisting of persons who have contacted you regarding horse By John Alan Cohan, Attorney at Law sales. It is helpful to also keep dated memoranda of telephone conversations to memorialize phone conversations with potential customers. All sales of horses, leases, breeding agreements, and other Wouldn’t it be nice if the horse industry had an the activity. The plan should show a short range contracts should always be in writing. All contracts should be completely filled out with the parties; advocate in the White House? Ann Romney, and long range forecast for the activity. The names and the name of the horses, and the date of the contract. You should keep signed and dated copies horsewoman, could be just such an advocate as forecast should allow for changes due to potential of all such documents rather than keeping computer generated forms of them. First Lady. Her horse competed in the Olympic unforeseen and fortuitous circumstances.” event of dressage, and she has long been an Auditors are asked to be on alert for “canned” Audits are the “lifeblood” of collecting additional revenue for the U.S. Treasury, but IRS philosophy has, advocate for the use of horses for physical therapy. business plan documents. for many years, made it difficult for taxpayers to defend themselves. In the event you are audited by the IRS you should seek legal advice at the earliest stage and work with legal counsel and your accountant to The President has substantial power to implement The IRS document also advises revenue agents to convince the IRS of your intentions. policy within the IRS, and the IRS is the enforcer be on alert for bogus appraisals that show how of tax laws. The IRS Commissioner is appointed by improvements such as barns, arenas, pastures, Audits are always a difficult experience for taxpayers. Changes in IRS policy depend on who the next IRS the President, with the consent of the Senate, for fencing, breeding sheds, stalls, storage facilities, Commissioner will be, and in turn who the next President will be. a five-year term. The Commissioner administers, and landscaping help to increase the value of the v manages, enforces, and supervises the application taxpayer’s farmland. of the IRS laws and related statues. The term of John Alan Cohan is an attorney who has served the farming, livestock and horse industries since 1981. He can be reached at: 310-278-0203 the present IRS Commissioner, Douglas Schulman, Revenue agents are also advised to challenge the or via e-mail at [email protected]. Website address: www.JohnAlanCohan.com expires in November, and a new appointee will taxpayer’s “material participation” in the horse be named by the President, subject to Senate activity. Under this legal test, you are permitted confirmation. to deduct losses relating to a horse partnership against your other income only if, among other Section 183 of the IRS Code pertains to activities things, you “materially participate” in the activity. “not engaged in for profit.” This provision is This is often a difficult standard to meet if The Jockey Club Fee Increase used to disallow deductions for horse owners professional trainers and other managers are hired and all other farming-ranching activities as to attend to important details such as training and well as other ventures ranging from multi-level development. marketing to air charters. How this provision is January 1, 2013 applied and interpreted is something that the IRS The IRS has a reputation for indifferent customer Commissioner can and does influence. service, long wait times on calls, and abuse towards Fees increase by $25 for nearly all-registry-related transactions, taxpayers who are supposed to be served. In including foal registrations, and these funds will be provided The recent trend in audits has been to regard situations where taxpayers have a history of losses, to the Thoroughbred Aftercare Alliance (TAA). horse activities as hobbies. A document relied on revenue agents tend to view business records by auditors, referred to as the Market Segment of such taxpayers with heightened scrutiny. It The Jockey Club, founded in 1894 and dedicated to the improvement Specialization Audit Technique Program Guide is important to keep hard copies of all evidence of Thoroughbred breeding, and racing, is the breed registry for North (“MSSP”) encourages auditors to presume that that shows your manner of keeping records and taxpayers in the horse industry are motivated by that might reflect your business motives. For America Thoroughbreds. In fulfillment of its mission, The Jockey Club personal pleasure and recreation. example, keep originals of magazine advertisement provides support and leadership on a wide range of important industry (including the entire magazines in which they initiatives and it serves the information and technology needs of The document directs auditors to inquire about appear). If you update written business plans, it owners, breeders, media, fans and farm, among others. business plans: “The taxpayer should have a formal is important to retain the earlier versions (all of written plan. This plan should demonstrate the which should be dated) rather than superseding taxpayer’s financial and economic forecast for them in a computer generated update. Continued on Next Page 4 Arizona Thoroughbred October/November/December October/November/December Arizona Thoroughbred 5 • Closed nostril endoscopic exam. In the absence of a • Myectomy. In this surgical procedure a section of the treadmill endoscopic examination, the horse can be evalu- paired throat muscles are removed via an incision in the ated using the endoscope while holding his nostrils closed. ventral mid-neck region. These act in part to retract the lar- As the horse increases his effort to breathe in air, affected ynx and may predispose to displacement of the soft palate. Dorsal Displacement of the Soft Palate horses will sometimes displace the soft palate and begin to Removal prevents the retraction. By: Dr. Patricia Provost breathe through their mouths. • Llewellyn procedure. In essence this is the same pro- • A radiograph (X-ray) of the area may also be taken to cedure as the myectomy only it is performed at the level of the larynx. The tendon of insertion for both throat muscles Overview confirm the size of the epiglottis. A small epiglottis may predispose to DDSP. are severed along with removal of a small section of other The inappropriate dorsal position of the soft palate during muscles.