Tax Avoidance Business Owner Liable for Six Years of Unfiled Returns

Peyton Mottahedeh, president of a California business that encourages income tax evasion, has been found liable for taxes and penalties relating to six years of unfiled federal tax returns. Mottahedeh’s business, the Freedom Law School, advocates for tax avoidance practices such as refusing to file tax returns and maintaining marginal financial records.  After six years of unfiled returns, the IRS began an audit of the Mottahedehs in 2008, a process that eventually resulted in the case being heard in U.S. Tax Court in 2014, where Judge Richard T. Morrison ruled that the Mottahedeh and his spouse were liable for the six years of unfiled taxes and penalties as calculated by the IRS. The case rested on the legitimacy of the IRS in estimating the couple’s income, especially because of the lack of meaningful financial records to examine in the audit.  In his decision, Judge Morrison rejected the Mottahedeh’s arguments challenging the legality of the IRS audit and its income estimation – thus holding them responsible for the entire amount as assessed by the IRS.

If you have unfiled returns or are under an IRS or state audit, contact the experienced tax attorney at Daniel Rosefelt & Associates, LLC, Attorney & CPA now to discuss your legal options.