Affiliated Expert Roberts Brokaw Testifies for the IRS in a Tax Liability Dispute

December 19, 2023

Analysis Group affiliated expert Roberts W. Brokaw III testified on behalf of the Internal Revenue Service (IRS), the respondent and prevailing party in a tax liability dispute brought before the US Tax Court. During the tax years 2006–2008, petitioner YA Global Investments’ assets were managed by its US-based agent and fellow petitioner, Yorkville Advisors. At the time, YA Global did not withhold US taxes, taking the position that it had no employees and was not directly engaged in a US trade or business. YA Global challenged the IRS’s assessment that it owed US federal taxes on income earned by Yorkville.

An Analysis Group team led by Managing Principal Gaurav Jetley and Associate Hailey Nguyen supported Mr. Brokaw, who filed a report and testified at deposition and trial on the financial aspects of the case and agreements for investment services between YA Global and Yorkville.

The US Tax Court held that YA Global could not have performed any investment activities independent of Yorkville and found that the relationship between the petitioners constituted trade or business engagement in the US. It further held that YA Global should be classified as a dealer in securities and liable for withholding tax during the years in question.