YA Global Investments, LP f.k.a. Cornell Capital Partners, LP, Yorkville Advisors, GP LLC, Tax Matters Partner and YA Global Investments, LP f.k.a. Cornell Capital Partners, LP, Yorkville Advisors, LLC, Tax Matters Partner, T. C. Memo. 2024-78, filed 8/8/24, get hit with Section 1446 withholding for their foreign partners (who are partners whatever they or YA thought they were), and find that the interest they accrued on debentures from their various investments was income, despite the dodgy nature of said investments.

This is an old case, going back nearly fifteen (count ’em, fifteen) years, so Judge James S. (“Big Jim”) Halpern has to resurrect some long-gone law. I’m going to leave the explications thereof to the legal necromancers, such as still have these antiques hanging around.

Suffice it to say that effective connectivity and partnership identity remain very much facts- and-circumstances, whatever the statutes of the time say. And defeating the “all events” test requires more than casual doubt as to collectability; hard contemporary evidence is needed.