"IRC § 183(d) is a safe harbor for the taxpayer. It allows a presumption that the taxpayer is engaged in for profit if in 3 of 5 consecutive years (2 of 7 in the case of breeding, training, showing or racing of horses), the activity is profitable."

I had this scenario described to me as follows: You can have losses more often than 3 in 5. That doesn't mean you are not running a business. That means you are bad at business and need to stop trying.

I didn't realize the TCJA can have affected a taxpayer's understanding of what they write off as hobby vs business. To be fair to your client, it's time to give them updated guidance:

https://www.thetaxadviser.com/issues/2018/nov/avoiding-hobby-loss-trap-after-tcja.html

They should already know better than what they are trying to pull off.