Sitaraman Jagannath, T. C. Memo. 2026-92, filed 9/24/26, authored two books and published 23 (count ’em, 23) articles, manages real estate, and has founded and run a 501(c)(3) to help immigrants, from whose bank account he took $590K via an “Over the Counter Withdrawal,” evidenced by a noninterest bearing promissory note from Sit’s real estate LLC, a disregarded entity, supposedly to help his daughter buy headquarters for her 501(c)(3). Except the daughter’s deal didn’t close for two years.

My grizzled, battle-hardened, ultrasophisticated readers have already shouted “Section 4958 excess benefit transaction and did he file Form 4720?” My answers: yes and no. True, IRS conceded section 4958(a)(2) excise tax of $20,000 regarding Mr. Jagannath’s participation as an organization manager in an excess benefit transaction, T. C. Memo. 2026-92, at p. 2, footnote 3.

Judge Christian N. (“Speedy”) Weiler notes Sit never claimed at trial that the $590K was a bona fide loan, T. C. Memo. 2026-92, p. 9, footnote 12. And the Forms 990 filed by the 501(c)(3) said the $590K was a loan to officer. Whoever prepared those forms handed the case to IRS. Except Sit did even better. ” Mr. Jagannath also contends that he never actually received $590,000 from [501(c)(3)]….. Specifically, he testified that he could not recall where the $590,000 went and whether there was a loan.” T. C. Memo. 2026-92, at p. 11.

I’ll spare you the rest. 

As for the Form 4720, see my blogpost “Nigeria Calling? – Part Deux,” 7/26/21, for the whole story.

Meantime, Sit gets hit for “excise taxes under section 4958(a)(1) and (b) of $1,327,500. We further hold that Mr. Jagannath is liable for section 6651(a)(1) failure-to-file additions to tax and section 6651(a)(2) failure-to-pay additions to tax.” T. C. Memo. 2026-92, at p.14.