The petitioner used funds in his IRA to start a business via an LLC. The initial capital contribution to the LLC was $319,000 of the petitioner's IRA funds. The IRA was created after the LLC with funds from the petitioner's 401(k) with a prior employer. The LLC was created and the petitioner directed the IRA custodian to acquire LLC shares, reporting the transactions (there were two of them) as non-taxable rollover contributions with the IRA now owning LLC interests. The LLC employed the petitioner as its general manager, and also employed the petitioner's spouse and children. The LLC paid a salary to the petitioner for his services as general manager. The IRS asserted a tax deficiency of $135,936 plus an accuracy-related penalty of over $26,000. The Tax Court agreed with the IRS, holding that the payment of a salary and the directing of compensation from the LLC violated I.R.C. Sec. 4975(c)(1)(D) and I.R.C. Sec. 4975(c)(1)(E) as a prohibited transaction. On appeal, the court affirmed. The payment of salary amounted to an indirect transfer of the petitioner's income and assets of his IRA for his own benefit and indirectly dealt with the income and assets for his own interest or his own account in a prohibited manner. As a result, the IRA was terminated with the entire amount taxable income, plus penalties. Ellis v. Comr., No. 14-1310, 2015 U.S. App. LEXIS 9380 (8th Cir. Jun. 5, 2015), aff'g., T.C. Memo. 2013-245.