It had to happen, but I could not have predicted it. Judge Joseph W. Nega has encountered The Mad Comedian, and he tells the story in Coaches 101 a NJ Nonprofit, T. C. Memo. 2025-106, filed 10/15/25.

Coaches was incorporated as “a publication . . . to help children in all areas, whether it is childrens [sic] books or getting high school students into college. Coaches 101 is about getting the children the right education to play in sports and conitue [sic] with there [sic] careers.” T. C. Memo. 2025-106, at p. 2. Its Certificate of Incorporation and by-laws puzzle Judge Nega, as one refers to a board of trustees and the other to a board of directors, but the Form 1023 application for 501(c)(3) status really confuses.

“The application explains that petitioner ‘was basically organized to act as the license holder of Omar Dyer as a literary agency.” It further explains that on January 1, 2020, Mr. Dyer created a ‘social media based foundation” called ‘My Plan Challenge Foundation Fund’ with the goal of pursuing blogs, podcasts, and other entertainment media related to Mr. Dyer’s Mad Comedian project. The application states: ‘The future plans of this company is [sic] to be a foundation that is directed around the new face of the company in Mad Comedian.’

“At some point, as the application notes, Mr. Dyer ‘changed his status from a volunteer to actual employee getting wages.’ It also explains that petitioner maintains a ‘Profit Sharing Program” (PSP) and Simplified Employee Pension Plan (SEP IRA) for the benefit of its employees. As described, the PSP provides that ‘executive employees will be have [sic] an agreement with the organization for personal funds used by the organization, and given back to the employee once when the organization creates a profit.’ The specific agreement between petitioner and Mr. Dyer provides that ‘[a]ny and all profits after expenses . . . are eligible for profit-sharing. Profits will be calculated as sales operations for that period minus expenses for that time period . . . .’” T. C Memo. 2025-106, at pp. 3-4.

Judge Nega gives this outfit the operational test (does it work for charitable purposes, with no substantial part of operations inuring to the benefit of any insiders). He needn’t run the organizational checklist.

“The only activities petitioner puts forward that could plausibly, taken at face value, qualify as exempt activities are vague assertions it ‘helped’ host an event for children and wrote a handful of recommendation letters for high school students. These do little to overcome the abundant evidence that petitioner’s primary activities are commercial ventures designed to earn a profit with no apparent connection to an exempt purpose.” T. C. Memo. 2025-106, at p. 8.

There’s procedural argy-bargy, which you can read for yourself. At close of play, summary J for IRS bouncing the application.

Who said Tax Court is dull?