I hesitated to blog Saad Al-Soufi and Samia Schreitah, 2015 T. C. Memo. 68, filed 4/7/15. It’s a totally unsubstantiated mortgage interest deduction. The excuse, though, is timely. And the grounds for Judge Lauber’s incredulity provides a warning to all who “seken straunge strondes, To ferne halwes couth in sondry londes”, as Geoff Chaucer put it in April, 1387.

Jumping ahead to 2009, Saad Al-Soufi (hereinafter sometimes referred to as “SAS”), an MBA who has lived thirty years in the USA but who has dual citizenship, buys (or maybe his kinfolk buy) a property overlooking the port of Latakia, Syria, SAS’s homeland.

I’ve never been to Latakia, but it holds memories. It is (or was) the home of the famous smoky black tobacco that gave a real kick to Balkan Sobranie pipe tobacco in my misspent youth. I can feel my lungs contract at the very mention of the place, and a hacking cough follow. Such is the power of memory.

Anyway, SAS supposedly acquires his kingdom-by-the-sea, and mortgages it with a local outfit, now out of business, to whom he allegedly pays $79K in deductible interest for the year at issue.

SAS visits the place a couple of times but can’t prove the 14-day cutoff of Section 280A, or what the mortgage terms were, or even show a deed. He never copied the papers while he was there; his sister kept them, and then came the ongoing civil war, of which we’ve read so much.

The papers, says SAS, was amongst the casualties.

You can guess the rest. SAS produces a letter, prepared after audit and before trial, by a purported officer of the out-of-business lender, that states the amount of interest paid in US dollars, not Syrian pounds. And nothing else.

This goes over like a lead cliché.

Judge Lauber notes in passing that Sharia law, presumably applicable in Syria, bars taking or paying of interest.

“Because the mortgage interest deduction was properly disallowed for lack of substantiation, we need not address questions that might arise concerning the general prohibition against the payment of interest under Sharia law, the extent to which this prohibition is operative in Syria (petitioner’s testimony was opaque on this point), or the relevance of these considerations to the proper Federal tax treatment. See In re Terrorist Attacks on September 11, 2001, 689 F. Supp. 2d 552, 557 (S.D.N.Y. 2010) (‘[T]he body of Islamic law known as Sharia * * * prohibits the payment or earning of interest[.]’).” 2015 T. C. Memo. 68, at p. 10, footnote 2.

I won’t speculate whether a form of evasive action, known to New York practitioners as a stare iska or heter iska, might have developed across an international and interreligious border or two.

The sting comes with the penalty.

“Petitioners had no credible evidence to support their claimed mortgage interest deduction. Petitioner has an M.B.A. in financial management and testified that he understood his tax filing requirements. But he failed to maintain in the United States any of the documents necessary to substantiate his claim to a deduction in excess of $70,000. He traveled to Syria twice but failed to make copies of the documents before they were allegedly destroyed. Even if the documents existed and were admitted into evidence, it is by no means clear that petitioners would be entitled to the deduction they claimed.” 2015 T. C. Memo. 68, at p. 11.

But still, it might have been better if SAS had them, or copies.

So remember, overseas homeowners, don’t leave home without them.