IRS Urges Upholding Foreign Investment Firm’s $97 Million Bill

The US Tax Court properly held that Cayman Islands partnership YA Global Investments LP failed to withhold taxes on income from an affiliated US financial adviser and is on the hook for $96.8 million in deficiencies, the IRS told a federal appeals court.

YA Global’s income was “effectively connected” with its business in the US conducted through New Jersey investment management firm Yorkville Advisors, and is therefore liable for taxes it should have withheld on that business from 2006 through 2009, the IRS said in a brief filed with the US Court of Appeals for the Third Circuit.

The Jan. ...