Sun v. Commissioner, No. 16-60270 (5th Cir. 2018)Annotate this Case
The Fifth Circuit affirmed the trial court's conclusion that the $19 million given to petitioner to invest was not a tax-free loan. The court affirmed the trial court's finding that the money became income to petitioner when he diverted it for his personal use, because he was realizing an economic benefit from the money; affirmed the tax court's imposition of penalties resulting from negligence or disregard of rules or regulations, because petitioner failed to show the complete disclosure of relevant facts to his accountants that would compel a good faith defense of reliance; and affirmed the tax court's decision allowing the IRS to recompute the amount of the deficiency after the tax court ruled that all the money was income to petitioner, as oppose to petitioner's corporation.