Apparently many people bought a used car from Mohamad Nasser Aboui and Mahyar Mizani, T. C. Memo. 2024-106, filed 12/9/24, during the four (count ’em, four) years at issue. And Judge Goeke buys a lot of Mo’s trial testimony, while finding fault with a lot of IRS’ audit work.

IRS treated Mo’s Sub S as a cash basis taxpayer  based on a representative’s erroneous tale, despite documents that proved otherwise. And the AO’s painstaking bank records reconstruction worked only sometimes. Judge Goeke is nothing if not thorough;  Mo is a great witness and for once has plenty of paper, all which help Mo’s trusty attorneys to get a Taishoff “Good Job, First Class.”

Mo’s also got real estate. IRS’ last-minute attempt to wildcard in “material participation” to thwart Mo’s $25K-per-yr loss deduction fails. Only the $100K AGI limitation thwarts Mo.

Mo and Ma get no chops at all, and a much-reduced deficiency.

Judge Goeke has a timely discussion of the “buy here, pay here” used car dealer’s situation, T. C. Memo. 2024-106, at pp. 2-3. Fewer words than Ray and Brandon on YouTube, and more to the point.