Armond Garibyan, et al., T. C. Memo. 2025-105, filed 10/9/25, ran with his brother a hospice providing outfit that didn’t care for patients, but shuffled money from government and insurers to nursing homes, and kept books. Their trusty non-CPA accountant told them to use accrual method accounting, but their prior business experience (running a barbershop, among other things) ill-suited them for the task.

Even the RA who had to go to bank deposit reconstruction got it wrong, so Judge Mark V. (“Vittorio Emanuele”) Holmes finds that about $7K that Armond claimed was shuttling money from one account to another truly was, and not unreported income. And some of their corporation’s claimed nontaxable deposits were indeed that.

So there’ll be a Rule 155 to try to sort it all out.

Armond and bro do avoid chops, however.

“The Garibyans’ bookkeeping system for [their Corp] left much to be desired during the years at issue. The Garibyans work in an industry where competent recordkeeping is especially important to getting paid and avoiding administrative audits. See Patacsil v. Commissioner, T.C. Memo. 2023-8, at *16 (contrasting the taxpayers with those required to keep fewer records or with greater organizational skills).

“But we also find that the Garibyans aren’t college educated and relied on two accounting professionals during the years at issue to keep their books and prepare their returns. One of them, Channels, advised them to keep their books on an accrual basis, and we find it was the source of the bizarre entries in Lakeview’s general ledger that rendered that ledger unreliable.” T. C. Memo. 2025-105, at p. 19.

Judge Holmes says it’s a close question, but he says they acted in good faith and relied on the bookkeeping system these professionals told them to use.

For Patacsil, see my blogpost “The Shoebox RedWeld System Breaks Down,” 1/17/23.

I’ll spare you my rant on our bizarre healthcare system; after you read Judge Holmes’ opinion, I’m sure you can compose one of your own. If this is what Congress is fighting about…but this is a non-political blog.