$300,000 Income Tax Reward (Peymon Mottahedeh)

[NYGman]

[AndyK]

We should thank him for coming. It did give us the occasion for some much-needed, um, focus.

Think we should move the thread to the Promoters forum?

Don't we have a Loser, Bottom-Feeder, Lying Coward forum we could use instead?

The only difference between Peymon Mottahedeh and a blood-sucking leech is that the leech can't speak

[noblepa]

The only difference between Peymon Mottahedeh and a blood-sucking leech is that the leech can't speak

But, if the leech could speak, it would probably make more sense than Peymon does.

[notorial dissent]

Why WES, how disbelieving and fact checking of you.

So in reality, rather than all these wins he's claimed, he currently has something on the order of $106K in personal taxes owed, and $200K+ in business/self employment taxes???? And is in to the IRS for something north of $300K??

He really is going to have problems coming up with that prize I would say.

[NYGman]

I guess at some point the IRS will win his challenge in court and take the 300k from him. So at some point we will have a winner, even if it isn't me.

[The Observer]

...[A]nd $200K+ in business/self employment taxes????

No, the notices of liens posted by Wes are for income taxes only.

Further clarification is that the IRS notices have duplicate periods so one would need to account for that in order to come up with a correct total for assessments. If you look carefully you will see that the notices are recorded in two separate counties - one in California and one in Florida. Thus the overlap.

Another thing to take into consideration is the date of assessment. Normally the IRS has ten years from that date to collect (under current law) so the periods for 1992, 1993 and 1994 should have expired as of 6/8/2008, yet the notice indicates that the notice can be refiled by 7/8/2018. The implication is that the collection statute was extended somehow for another ten years. I have no way of knowing exactly what would have triggered the extension, only the IRS and Peymon know; the IRS won't tell us and Peymon can't be trusted to tell the truth about the situation. My guess is that that the statutes got extended due to litigation. In any event since Wes did not seem to find a refiled notice for these periods, they would have expired anyways as of 6/8/2018.

At this point, it would appear that Peymon owes just shy of $160,000 plus accrued interest and penalties to the feds. They have until 2025 to collect the amount. As to what he still owes the state of California, my guess is that those periods expired back in 2012 or so, but since the notice of lien does not provide any assessment dates, this is just a wild guess on my part.

The most interesting to me is that the IRS recorded a lien in Florida, which would indicate that either Peymon established a residence there, or at least acquired real estate or some type of physical asset. In the latter event, the government would have to publicize the existence of the lien by recording it in the county where the property was located in order to secure their interest in the asset.

The address in Phelan, California shows under Google maps to be a single-family residence sitting on a desert lot, with little landscaping. Zillow shows it is 3800 sq feet of living space, 5 bedrooms, 3 baths and that it sold last year for 359K which is impressive for that area. The address on the Florida notice shows it to be a physically smaller home, but little data exists on Zillow in terms of purchase date or fair market value. The assessor value was at 148K. So if Peymon did own the Phelan address, was it lost in a foreclosure and he moved to Florida in 2015 hoping to get the feds off his tail? I doubt that the government seized it for a judicial sale for the taxes, otherwise Wes would have seen court records for that. But Freedom Law School's phone shows a Florida area code so perhaps Peymon decided the California mark market was drying up and he needed to develop a new sale area.

[TBL]

And we all know "Florida Man" will sign right up.

[jcolvin2]

...[A]nd $200K+ in business/self employment taxes????

No, the notices of liens posted by Wes are for income taxes only.

The notices relate to Form 1040 taxes, which include both income taxes and self-employment taxes.

[The Observer]

...[A]nd $200K+ in business/self employment taxes????

No, the notices of liens posted by Wes are for income taxes only.

The notices relate to Form 1040 taxes, which include both income taxes and self-employment taxes.

But not business taxes. And there is no separate assessment for self-employment taxes. Both income taxes and self-employment taxes are assessed together with one assessment date and one monetary figure. You cannot determine the amounts of the taxes incurred by simply looking at a notice of lien. You would need to see the master file transcript to see how those amounts were broken out. This is where things get confusing when people mix terms like "personal taxes", "income taxes", "business taxes" and "self-employment" taxes as though they are one and the same. Self-employment taxes are only calculated for the purpose of securing the amount owed for for Social Security/Medicare contributions from the eligible income. That amount is reported to SSA so they can keep record of those amounts for the taxpayer when it comes time to calculate the benefits due.

There is no doubt that Peymon's assessments included income tax and self-employment tax. But notorial dissent's question implied that there were separate assessments, and that was relying on Wes not noticing that the assessment periods were one and the same. So actually "personal taxes" can mean any number of different types of taxes owed by an individual. I am sure notorial meant by "personal taxes" + "business/self-employment taxes" that it was really the income tax and self-employment taxes. I suppose that for some people that "business taxes" means taxes based on reported schedule income (such as schedule C) but again those income amounts get aggregated on the 1040 as income and we are back to having only personal income tax and the self-employment tax calculated and assessed as one figure - which gets generally treated as income tax for purposes of the tax lien notices.

I am not sure where Wes came up with the $300,000 figure owed by Peymon since the notice recorded in 2015 that has all of the known periods assessed is showing an amount of $276,666.10. That amount reflects only the assessed amounts (unpaid) at the time the notice was recorded. Unless Wes was able to calculate the amount of penalties and interest accrued (which I doubt, since it would require knowledge of exactly what civil penalties were assessed and the amount, as well as running an accrued interest calculation on a monthly basis for the interest rate for each particular month) my assumption is that Wes just made an educated guess what was owed at that time. My guess would be that Peymon owed more than $300K at that time.

[notorial dissent]

Yes, I was trying to determine the difference, if there was one between the two. OWOTO he still owes a big pile of cash. Sucks to be him.

[wserra]

my assumption is that Wes just made an educated guess what was owed at that time.

Yep. Although "uneducated guess" might well be closer. Plenty of people here (certainly including Obs and jcolvin) know more about taxes than I. I did note the overlap in years between the two NFTLs, so didn't just add them, but I also assumed, perhaps incorrectly, that the guy owed something to FTB as well. I don't know the period after which FTB liens expire.

I'm going to move this thread to the Promoters forum.

[The Observer]

I did note the overlap in years between the two NFTLs, so didn't just add them, but I also assumed, perhaps incorrectly, that the guy owed something to FTB as well. I don't know the period after which FTB liens expire.

Perfectly reasonable to do so. I had thrown out the FTB figures automatically only because of the age of the notice (18 years) and since there was no refiled notice, my assumption was that the state taxes had expired as well. Given the paucity of information on the notice, your guess is as good as mine (and anyone else's for that matter).

And the ironic issue at the heart of any SFR assessment is that it is predicated on assumptions by the examiner(s) on the amount of income that was received by the nonfiler. There is no requirement that the proposed figures are accurate to the penny, but have to be based on reasonable assumptions about the taxpayer's economic record as far as is known. In the past, there were "lifestyle audits" that simply relied on old government statistics and applied them straight across the board to taxpayers without scrutinizing whether there were circumstances that were not relevant to that particular taxpayer. That approach got thrown out by the courts, but it certainly does not mean that the approach of using the taxpayer's living standards and expenses to come up with a income amount for an SFR is no longer pursued. By using local standards of basic living expenses for the taxpayer's geographical area, (rent or house payment, food/ clothing, transportation, medical, etc) the SFR can support itself if challenged in court about how the IRS came up with the figure, including any specific and actual financial expenses or income that the IRS received from 3rd parties (1099 income report, 1098 mortgage interest report, summonsed bank records, etc.). So it is quite possible the IRS could have have too low a figure or too high a figure for a SFR assessment, but then the burden of proof is on the taxpayer to provide data that would convince the court that the audit needs to be amended or tossed out. Most taxpayers just refuse to contest the SFR assessment due to fear that an correct and higher figure will be revealed or that they simply don't have the records to contest the assessment.

[jcolvin2]

In the past, there were "lifestyle audits" that simply relied on old government statistics and applied them straight across the board to taxpayers without scrutinizing whether there were circumstances that were not relevant to that particular taxpayer. That approach got thrown out by the courts, but it certainly does not mean that the approach of using the taxpayer's living standards and expenses to come up with a income amount for an SFR is no longer pursued. By using local standards of basic living expenses for the taxpayer's geographical area, (rent or house payment, food/ clothing, transportation, medical, etc) the SFR can support itself if challenged in court about how the IRS came up with the figure, including any specific and actual financial expenses or income that the IRS received from 3rd parties (1099 income report, 1098 mortgage interest report, summonsed bank records, etc.).

There are some (possible) limitations on the IRS's ability to use "lifestyle audits" to determine deficiencies. As part of the 1998 IRS restructuring, Congress added section 7602(e) to the Code:

7602(e) Limitation on examination on unreported income
The Secretary shall not use financial status or economic reality examination techniques to determine the existence of unreported income of any taxpayer unless the Secretary has a reasonable indication that there is a likelihood of such unreported income.

[Burnaby49]

In Canada they're called "net worth" audits and attempt to calculate the increase in a taxpayer's net worth (assets less liabilities) after adjusting for estimated personal expenses for the year. Any increase from the opening balance, plus expenses, is assumed income.

This is a time-intensive last resort form of audit when there are no income/expense records to work with, auditors hate them. When I joined the CRA in 1974 I faced a one-question day long exam. The question was to determine a taxpayer's income based on a huge box of random records, a net worth audit. They were actual taxpayer documents. A taxpayer had agreed to allow all of his records to be used as a case study in exchange for not being hit with criminal charges.

[jcolvin2]

A taxpayer had agreed to allow all of his records to be used as a case study in exchange for not being hit with criminal charges.

Oddly reminiscent of giving your body to science.

In the US, I haven't seen a net worth based audit or IRS criminal investigation opened since I started practicing in 1991. (Early in my career, I was involved in a civil Tax Court follow-up to a criminal net worth case where the criminal charges had been brought in the mid-1980s.) It is painfully difficult to put together a net worth case correctly, and too easy to stumble. If there is an alternative methodology - and there almost always is - the net worth method will be avoided. They probably still teach it in criminal investigation school, but my guess is that agents never actually use it in real life. Sort of like civil engineers learning quantum physics.

[wserra]

Sort of like civil engineers learning quantum physics.

A mathematician, a physicist and an engineer set out to prove the proposition that all odd numbers are prime (which is, of course, absurd). The mathematician's proof: 1 is odd and prime, 3 is odd and prime, 5 is odd and prime, 7 is odd and prime; therefore, by induction, all odd numbers are prime. The physicist's proof: 1 is odd and prime, 3 is odd and prime, 5 is odd and prime, 7 is odd and prime, 9 . . . is an experimental error. The engineer's proof: 1 is odd and prime, 3 is odd and prime, 5 is odd and prime, 7 is odd and prime, 9 is odd and prime, 11 is odd and prime, 13 is odd and prime . . . .

[wserra]

I missed a Mottahedeh misadventure, because it's in the name of his wife April. It isn't interesting enough to be worth a lengthy exploration. It is, however, yet another example of how he's not about to use the garbage he sells to the marks when his own ass is on the line.

As we know, Mottahedeh has had his tax issues for a long time (read: he didn't pay them). Apparently, several years ago, the IRS came to believe that certain things in his wife's name were not unrelated to taxes he (or they) owed. It issued a third-party summons to a FL financial institution for records of an account in her name. She files a petition to quash it. 08-mc-60823 (FLSD). It's pretty clear that Peymon wrote it, over her name. S/He argues some silly stuff, including that the ebil goobermint is trying to stifle the free speech of Peymon. Peymon, you see, "is politically active, has run for public office in the past, is critical of IRS' practices, policies and procedures and sometimes espouses views that are not popular with the IRS and the Federal Government"; consequently, the govt wants to shut this insignificant ankle-biter up. No ego problem there. Also no argument, since one person lacks standing to assert another's rights.

Anyway, nothing s/he writes has anything to do with the only thing that matters in this arena, United States v. Powell, 379 U.S. 48 (1964). The court, therefore, has no problem ruling against them (R&R, affirmed by DJ). The point is that, once again, Mottahedeh doesn't even attempt to use what he sells to the marks. At least he has a realistic (if larcenous) view of its efficacy.

[The Observer]

Peymon's loss over appealing the denial to quash his wife's summons was covered here by the way.

The point is that, once again, Mottahedeh doesn't even attempt to use what he sells to the marks. At least he has a realistic (if larcenous) view of its efficacy.

In the thread cited above, you will note that Famspear points out that Peymon published an Internet article about how to defeat an IRS summons that is issued to the taxpayer, but had nothing in regards how to defeat a summons issued to a third-party. So your theory regarding his realism seems accurate. After all, one can never be too realistic about the impact of their ignorance and lack of ability.

[Burnaby49]

A taxpayer had agreed to allow all of his records to be used as a case study in exchange for not being hit with criminal charges.

Oddly reminiscent of giving your body to science.

In the US, I haven't seen a net worth based audit or IRS criminal investigation opened since I started practicing in 1991. (Early in my career, I was involved in a civil Tax Court follow-up to a criminal net worth case where the criminal charges had been brought in the mid-1980s.) It is painfully difficult to put together a net worth case correctly, and too easy to stumble. If there is an alternative methodology - and there almost always is - the net worth method will be avoided. They probably still teach it in criminal investigation school, but my guess is that agents never actually use it in real life. Sort of like civil engineers learning quantum physics.

Maybe net worth's aren't done in Canada any more either. I've been retired 12 years and they were few and far between when I was still working. Too time intensive and subjective to be a standard technique, they were only used as a last resort.

[TBL]

You know, to hell with Mottahedeh, I read this thread to educate my ignorant arse about tax auditing.