Tax Court In Brief | Yaguda v. Comm'r | Taxation Of Unearned Income Of Child; Income From S Corp; Accuracy-Related Penalty

Published date24 October 2022
Subject MatterCorporate/Commercial Law, Tax, Insolvency/Bankruptcy/Re-structuring, Corporate and Company Law, Insolvency/Bankruptcy, Income Tax, Tax Authorities, Securities, Shareholders
Law FirmFreeman Law
AuthorFreeman Law

The Tax Court in Brief - October 17th - October 21st, 2022

Freeman Law's "The Tax Court in Brief" covers every substantive Tax Court opinion, providing a weekly brief of its decisions in clear, concise prose.

For a link to our podcast covering the Tax Court in Brief, download here or check out other episodes of The Freeman Law Project.

Tax Litigation: The Week of October 17th, 2022, through October 21st, 2022

  • Champions Retreat Golf Founders, LLC v Comm'r, T.C. Memo. 2022-106 | October 17, 2022 | Pugh, J. | Dkt. No. 4868-15

Yaguda v. Comm'r, T.C. Summary Opin. 2022-21 | October 20, 2022 | Panuthos, Special Trial J. | Dkt. No. 19113-19S

Summary: Pursuant to 26 U.S.C. ' 7463(b), the decision to be entered on this opinion is not reviewable by any other court, and the opinion shall not be treated as precedent for any other case. The case regards a deficiency determination and a 26 U.S.C. ' 6662(a) accuracy-related penalty.

Estate Financial, Inc. (EFI), a loan service provider, was incorporated in 1991 and made a valid election to be treated as an S corporation. Petitioners, Joshua Yaguda and Joeli Yaguda (Petitioners), held a 10% shareholder interest in EFI. Petitioners' daughter, Isabella Yaguda, held a 5% shareholder interest. In 2008, a creditor filed an involuntary bankruptcy petition against EFI. The case was converted to a voluntary chapter 11 bankruptcy. As directed by the bankruptcy trustee, EFI engaged in business activity, including liquidating certain assets. Pursuant to EFI's election as an S corporation, and for the 2015 tax year, EFI filed with the IRS several Schedules K-1, Shareholder's Share of Income, Deductions, Credits, etc., for shareholders, which included petitioners and their daughter. In 2007 "petitioner" (the opinion does not identify which Yaguda) was charged with counts of securities fraud. In 2008, a Notice of Pendency of Action (Lis Pendens) was filed in the criminal proceeding, listing petitioner's shares in EFI to be preserved from any transfer. Petitioner entered a plea agreement in 2009, in which he relinquished and forfeited assets. In sentencing, Petitioner's interest in EFI was assigned to the District Attorney's Office to oversee for the benefit of the victims of the securities fraud. In 2010, the court appointed a receiver for liquidating assets and paying restitution to victims. Petitioner remained incarcerated until 2012. Petitioners timely filed Form 1040 for tax year 2015. It was prepared by a certified public...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT