In Uncategorized on 12/29/2014 at 16:50

 And Not Mine, Either

Ya gotta give credit to Peymon Mottahedeh and April Mottahedeh, 2014 T. C. Memo. 258, filed 12/29/14. They claim IRS was persecuting them.

Judge Morrison doesn’t think so. “The Mottahedehs contend that the IRS audit was unconstitutional because it was motivated by their public criticism of the IRS. The record does not demonstrate that the audit was motivated by criticism of the IRS. Therefore, we reject this contention.” 2014 T. C. Memo. 258, at p. 29.

The Motts never bothered to file returns or pay tax, either estimateds, SE or 1040-type, for a bunch of years. While those delictions usually draw bull’s-eyes on your tax quarters, the Motts encouraged others to “go and do likewise.”

IRS and Judge Morrison find that: “Peymon Mottahedeh operated a business called the ‘Freedom Law School’. April Mottahedeh was heavily involved in the business. Since at least 1999, the Freedom Law School has organized conferences attended by hundreds of people. The Freedom Law School charged fees to the attendees. The Freedom Law School also sold books, tapes, CDs, and DVDs. It also sold packages of services,


“• the ‘Simple Freedom Package’ (for an initial fee of $4,000);

“• the ‘Royal Freedom Package’ (for an initial fee of $6,000).” 2014 T. C. Memo. 258, at p. 5.

And the Motts had a multi-level marketing scheme as well, selling distributorships as well as tax dodger stuff.

And here’s a sample of the Motts’ product: “Why are filers so EASY to RAPE and ABUSE by the IRS? Because these misinformed people, by VOLUNTARILY filling out a 1040 Income Tax Confession form had given the IRS the full laundry list of everything they own, so that the IRS knows WHERE to go to steal their victim’s wealth and assets.” 2104 T. C. Memo. 258, at pp. 6-7, Footnote 8.

Not what I learned at the feet of the late Prof. Harrop A. Freeman on the Hill Far Above, so long ago.

You can see where this is going. But first a nod to the technicians.

The Motts claim IRS didn’t use bank deposits to reconstruct their income, but IRS shows that the Motts insisted on cash from their many adherents and didn’t use banks, so IRS used their living expenses supplemented by BLS statistics. The Motts claim IRS used numbers other than the BLS, but that’s cool, says Judge Morrison (although more formally).

“We conclude that the revenue agent relied partly on average-spending statistics from the Bureau of Labor Statistics and partly on direct estimates of the Mottahedehs’ spending, that this combined approach was a permissible method of estimating the Mottahedehs’ spending under the circumstances, and that estimating the Mottahedehs’ spending was a permissible method of reconstructing their income under the circumstances.” 2014 T. C. Memo. 258, at p. 20 (Footnote omitted, but it’s all about CA community-property, so I leave it to practitioners in jurisdictions afflicted with ComProp to sort it out).

In short, IRS has lots of room to derive income, especially where the taxpayers are open, continuous and notorious dodgers.

And, if you are a dodger and IRS nails you, pay up. Don’t play the clown. See my blogpost “Pay The Man”, 7/31/12.


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