No, not a reprise of an obsolete video game, this is the story of Khurram Shahzad Gondal and Arooj Asmat, T. C. Memo. 2024-36, filed 3/27/24. Arooj is out of the Section 6663 fraud chops, although she gets the Section 6662 negligence variety.  Apparently Exam decided not to press for fraud chops on Arooj, so the SNOD (which Judge Courtney (“CD”) Jones calls a NOD, inviting conflation with Notices of Determination in CDPs, SS-8 reclassifications, 501(c)(3) disqualifications, and innocent spousery) only chops Khurram.

Khurram gets nailed by the Medicaiders in Our Fair State for false billing. Khurram and partner ran a bunch C Corp taxi companies (hi, Judge Holmes), but not the De Niro-Foster type. Khurram provided transportation to Medicaid clients seeking doctor visits or hospital outpatientry. Only Khurram billed NYS for nonmedical trips. Only Khurram siphoned cash from his C Corps for personal expenses.

After the State authorities got through with Khurram, they sent word to the IRS. Infoshare is standard operating at the NYS/IRS interface. Khurram and Arooj were less than cooperative at Exam, and produced no records.

I shouldn’t be surprised, but I am. Leaving an audit trail with bank accounts is an invitation. IRS has world-class bank account reconstructors, and the presumption that everything that goes in is taxable, except what obviously is not, makes their lives easy.  And Khurram doesn’t put up much of a fight. Close to $1.5 million in constructive dividends over two (count ’em, two) years, with enough badges of fraud to qualify for vulture scout, sets up a nice haul for IRS.

Edited to add, 3/28/24: I should read my own blog. WordPress reminds me of my blogpost “Nailed in Nebraska,” 2/26/20, wherein I recounted that Judge Elizabeth Crewson Paris decried hitting spouse with Section 6662 negligence chop when other spouse got Section 6663 fraud chop; same is impermissible stacking of penalties. Taishioff says pro se Arooj should move for reconsideration on error of law.