$300,000 Income Tax Reward (Peymon Mottahedeh)

[HardyW]

I was just catching up on the writings of Anna Maria Riezinger von Reitzenstein von Lettow-Vorbeck, denizen of Big Lake Alaska, Fiduciary of the (sorry I mean The) United States of America and domestic partner of the Hereditary Head of State who has now been also bestowed with the title Postmaster (sorry I mean Post Master).

In between sacking yet more of her State Coordinators for not pretending right, and inventing more complexities in the pretend structure of her pretend American Government, pretend judge Anna has something to say about Peymon and his "Freedom Law school crowd" apparently becaise they charge $4,000 for something or other.

http://www.paulstramer.net/2021/10/the- ... eymon.html

[The Observer]

Just jealousy among the grifters. Devvy Kidd used to take shots at Peymon, she was the first to point out that he had notices of federal tax liens recorded against him. Peymon right now is the giant promoter on the block, but that isn't saying much since everyone else is pretty much gone, deserted by their following, jailed, dead, and/or given up the fight. So he is a convenient and easy target to find.

It's ironic that the link above is for a page owned by a guy who claims to be an Internet marketer selling silver and gold online. But the silver he is selling are just silver medallions and knock-offs of original US coins. No prices listed but I am pretty sure that there is a huger markup. He just tells you the price is justified because silver is going to double in the future.

Grifting -its the gift that keeps on pumping and stealing.

[wserra]

I know, I know - Peymon will simply state that Grant failed to follow all of Freedom Law School's curriculum to the letter and thus there was nothing more that Peymon could do for him.

Well, Grant called Payme as a witness at his trial. Given his testimony, that would be a hard claim to make.

In short, Grant attempted a Cheek defense - about the only thing someone who is dead in the water for tax crimes has available. As part of that defense, he subpoenaed Mottahedeh. In a lengthy direct, Grant's lawyer took Mottahedeh through lots of documents that Grant submitted to the IRS, the CA FTB, Tax Court, District Court, Congressmen and Senators - basically everywhere - and established that Mottahedeh drafted all of them. Grant, you see, had purchased the "Royal Freedom Package" from Freedom Law School, Payme's non-freedom, non-law, non-school scam, which includes all of that, plus:

full representation by qualified paralegals, attorneys, or other professionals for any and all IRS and State income tax agency administrative issues, including all -- a) all letters and correspondence between you and the IRS or state income tax agencies.

P 14, 28-29 (page numbering is to pdf, not the page numbers on the transcript; I've highlighted the relevant parts). Unfortunately, Payme interpreted "full representation" to mean "by me"; well, of course he's a "qualified professional". Grant submitted Payme's crap verbatim. P 41. Payme even "consulted" with Grant as to his criminal trial. P 16. And, of course, the bottom line is that Payme concluded that, in his opinion, Grant need not pay income tax. P 81. Oh, and Grant paid Mottahedeh $22K for the privilege of spending 2.5 years in federal prison. P 24.

Just one Q&A makes "he didn't do it right" impossible:

Q. So no matter what Mr. Grant received from the IRS or Franchise Tax Board or any court in which he had an action going on related to his income tax, is it your understanding that everything would be sent to you for your deciding what type of response and preparing whatever response was going to be provided by Mr. Grant?
A. Yes.

P 81.

As an aside, just this five-year-old transcript provides a serious start to a Mottahedeh prosecution. It's beyond me why to date there hasn't been one.

[The Observer]

Well, Grant called Payme as a witness at his trial.

I read through the transcript three times over the last couple of weeks - thanks for posting. Given that Peymon was subpoenaed, there wasn't a lot he could do to avoid testifying, but Peymon was very glad to show up; he indicates that he agreed to come in the cross-examination. That was not the right feeling to have about appearing in court where he basically confirmed his activities and earnings from his "law school/church." Given that his opening remarks to the court was explaining about how his face might not appear normal due to a tooth abscess, Peymon appears wanting to make a good impression. Hard to do that if you are sensibly dodging a court appearance on the good chance that you will end up indicting yourself.

On top of that he admitted during cross-examination that he told his marks that they could go to jail for following his directions! And yet people pay him for this trash and then follow it anyways. After all, if Elon Musk told you that buying his Tesla could result in you burning up in a battery explosion, would you still buy it? If Typhoid Mary told you that eating her Irish stew would probably get you deathly sick, would you still eat it? Yet Grant apparently either forgot or ignored the implications of what Peymon was telling him. And then when Peymon's warning comes true, he wants to plead a Cheek defense? I am not sure the defense attorney should have brought up this fact, I would have to think it would cause problems regarding the willfulness of Grant.

Other interesting things:

(1) Peymon sold annual renewals of his tax scam. Most promoters just sold you the package on a one-time basis. Peymon has the chutzpah to tell his rubes that they have to renew every year for an additional $2,500 for his trash that might land them in jail. I guess the selling point was that they would get the dubious benefit of Peymon appearing at any IRS meeting or court trial to back them up - even when it means they are going to lose anyways.

(2) Peymon claims he provided "full representation" for Grant at tax agency meetings. That is a bad claim since the IRS itself will not permit a person other than a CPA, attorney or enrolled agent - Peymon is none of these - to appear for the taxpayer. While there are some exceptions for others to represent a taxpayer (a close relative, for instance) none of these would have applied to Peymon. More chutzpah on Peymon's part when he testifies that his services cover everything up to a Supreme Court appeal. I doubt that at any point in time Peymon might have mentioned to Grant that he (Grant) would have to shoulder all of the normal costs for pursuing an appeal as well as having to engage an attorney to do so since Peymon could never appear as a legal representative for Grant.

(3) I got the impression that Peymon has been instructing his marks that filing 1040s is not a good thing to do. His testimony confirms that he told Grant that the 1040 form was a "confession form." On the other hand, he stated he did not advise his clients to pay the tax if they were not going to file. So he told the marks to not file and not pay and take the chance of going to prison? I guess so since the defense attorney got Peymon to admit that he advised Grant that those statutes don't apply to him - based on Peymon's twisted and shopworn interpretation of the term "voluntary compliance."

(4) The revelation that Joe Bannister had teamed up with Peymon at one was a bit surprising. What was not surprising is Peymon claiming that Bannister was one of his "students", yet he cites Joe's "research" as compelling evidence that Grant, and all of the other Freedom Law crowd don't have to file returns. I just wonder how much Peymon paid Bannister for his "research" or was it more likely that Peymon just paid Bannister to hand out endorsements of Freedom Law School.

(5) It was a moment of satisfaction of seeing Peymon having to admit under oath that he lost the case that Grant brought on appeal to the California State Board of Equalization after the Franchise Tax Board ruling went against the taxpayer. Bonus question:

Q. Did Mr. Grant ever accuse you of misleading him or failing to honor your promise to him in any way?

A. No.

Grant really should have confronted Peymon over his lousy representation and failed promises. But then, every mark that went down in flames in court should have confronted their scammer.

I agree, Wes, that Peymon delivered a lot of statements that could come back to haunt him. Perhaps Peymon thinks that by advising all of his marks that they could still go to jail, he can avoid getting nailed: "After all, your honor, I did give them fair warning that what I was telling them may not work." And I agree that Peymon's testimony showed that he was pretty much in the driver's seat when it came down to whether they were making the decisions or he was. Fortunately, it wasn't so far over the top that the jury decided that Grant was innocent.

[The Observer]

As a closing footnote to this thread, since I don't expect that we will ever see another post from Peymon Mottahedeh, let's remember what he had to say about the appeal that he had filed:

2) The 01 to 06 years are on appeal due to government incompetence. If you really want to know more look at the tax court docket. Hold your horses until the appeal is done.

I agree, in theory, that we should always await for the final decision to be made before proclaiming that we were on the right side of the law - even if we know that there is no possible way that the court will rule in favor of the kind of absolute tripe that Peymon is peddling. But there is no need to hobble the horses when you have an appellant who simply just played games with the appeal court and never ever got down to business.

Peymon claimed that the result of the assessments against him were due to government incompetence. To me, an average layman, it seems that situation would be a simple thing to prove to the court and would take little knowledge of the basic tax laws to show how the government screwed up. After all, there is no reason to resort to complex legal arguments and heavy research of case laws just to prove that the local IRS agent that handled the case messed up in their audit. And Peymon met all of the requirements of contesting the assessments at the administrative level, otherwise he could have never gotten into court in the first place.

Yet, despite the time and effort put into this process, Peymon at the last possible moment - and that is not an exaggeration, since he missed filing deadlines several times, given the court's extremely lenient attitude - suddenly tossed in the towel and the court tossed his appeal. And we don't even get the proverbial whimper at the end of this farce.

Of course, if you peruse Freedom Law School's pages or Youtube videos, there is no mention in the last 60 days of this surrender by Peymon. There isn't even an attempt of a bald-faced lie claiming that he won in court, that the goverment lost in court, or that the government abated the assessments. Instead, Peymon has just avoided the whole subject and moved on to greener pastures where he recommends using UCC law to protect your assets against the IRS, or trumpets about the letters he has received from the IRS stating that they are no longer investigating him for possible promotion of illegal tax shelters or other IRC violations. I guess it is possible that Peymon will claim that he no longer needed to pursue an appeal since the IRS is no longer investigating him and that means, in his inimitable way of interpreting others and the law, that he must not have to pay.

But the bottom line here is that Peymon lost his appeal by failing to show and make the arguments that he has sold to others. Any person considering giving Peymon money for garbage that Peymon himself will not use should put their checkbooks away.

[juan galt]

It's not quite over yet. Peymon's appeal has been reinstated as of Nov 30 and his opening brief filed on Nov 17, 2021.
11/17/2021 32 Filed Appellant Peymon Mottahedeh unopposed motion to reinstate appeal. Deficiencies: None. Served on 11/17/2021. [12291070] (LA) [Entered: 11/17/2021 05:59 PM]
11/17/2021 33 Received original and 0 copies of Appellant Peymon Mottahedeh opening brief of 33 pages (Informal: No). Served on 11/17/2021. Major deficiency: case is closed, motion pending. [12291072] (LA) [Entered: 11/17/2021 06:02 PM]
11/30/2021 34 Filed clerk order (Deputy Clerk: SSR): Appellant’s motion to reinstate this appeal (Docket Entry No. [32]) is granted. The order of dismissal for failure to prosecute (Docket Entry No. [31]) is vacated and the appeal is reinstated. The Clerk will file the opening brief received at Docket Entry No. [33]. The answering brief is now due December 30, 2021. The optional reply brief is due within 21 days after service of the answering brief. [12301691] (WL) [Entered: 11/30/2021 03:25 PM]
11/30/2021 35 Filed original and 0 copies of Appellant Peymon Mottahedeh opening brief of 33 pages (Informal: No). Served on 11/17/2021. [12302438] (LA) [Entered: 12/01/2021 11:49 AM]
12/22/2021 36 Filed (ECF) Streamlined request for extension of time to file Answering Brief by Appellee CIR. New requested due date is 01/31/2022. [12322579] [19-71432] (Pett, Curtis) [Entered: 12/22/2021 08:38 AM]
12/22/2021 37 Streamlined request [36] by Appellee CIR to extend time to file the brief is approved. Amended briefing schedule: Appellee Commissioner of Internal Revenue answering brief due 01/31/2022. The optional reply brief is due 21 days from the date of service of the answering brief. [12322600] (BG) [Entered: 12/22/2021 08:54 AM]

[wserra]

Wow, that's hard to believe. I know that courts don't like to default lay pro se litigants. But the Mottahedehs were thumbing their noses at the Ninth Circuit, which basically responded "Thank you, sirs, may we have another?" 'Course, the Circuit will get the last word . . .

In any event, it was completely predictable that their briefs (if they filed any) were not going to contain the happy horseshit that Payme sells to the marks, and neither Payme's nor April's does. Instead, they mainly whine about how unfairly the govt treated them in SFRs after they failed to file returns at all. As I think I wrote above, definitely something I'll add to my personal definition of "chutzpah".

Hey, juan, howya doing? Long time no see. Any contact with your old friend Marc Stevens?

[The Observer]

Instead, they mainly whine about how unfairly the govt treated them in SFRs after they failed to file returns at all.

And its a whine that matters little:

(1)

Issue 3: IRS used APRIL' s children to assume a larger family size BL S data
to come up with income and taxes on APRIL AND PEYMON, but at the same
time, failed to give a dependent deduction and child tax credit to APRIL, or APRIL
AND PEYMON for having the children as child dependents.

What April (and Peymon) fail to acknowledge is that the correct way to let the IRS know how many dependents you have is to file a tax return that lists those dependents. Same thing applies for the child tax credit. If you don't do this, the IRS has no idea of how many dependents/children you have. But apparently Peymon is hoping that the 9th Circuit is going to agree with him that the IRS should be able to pull that sort of information out of thin air.

The standard practice of doing a substitute-for-return (SFR) is not to allow a taxpayer anything other than the filer's standard deduction and exemption. The government is not going to guess or err on the side of the taxpayer in creating unsupported deductions, credits, or exemptions. That burden has always been on the taxpayer.

The reality of this issue is that Peymon and April could have filed signed tax returns at any stage of the audit process and brought the process to a screeching halt. They could have submitted signed returns to the courts with their filings and got this resolved. But they haven't. And they won't. Peymon knows that filing a return that is not accurate will only land him in further hot water. And filing an accurate return is not what he wants to do.

(2)

ISSUE 1: IRS has clearly failed to carry IRS' burden of proof, as required
in 26 USC §749l(b) as to why IRS used BLS data to propose taxes on APRIL AND
PEYMON. Failure of the Tax Court to rule that IRS had failed to meet IRS's
burden of proof is error and should be corrected by this Court by ruling that IRS
failed to meet the burden of proof in using BLS data to propose taxes on APRIL
AND PEYMON, and the taxes imposed for years 2001 through 2006 should be
abated in full.

Again, once Tax Court approved the use of Bureau of Labor Statistics (BLS) by the IRS to come up with a tax assessment figure, Peymon and April could have stopped this by filing a signed return. If they believe they have no taxable income, as Peymon keeps telling his marks, then why not file a return showing no taxable income? Because Peymon knows that this will only get worse if he does that - especially since the records show that the IRS captured deposits going into April's bank when Peymon lost in court trying to quash the summons (which is admitted in the filing).

(3) Peymon starts trying to paint the IRS auditor as incompetent simply because she was not adding up the deposit amounts correctly. His explanation of the "correct amounts" goes to the point of actually showing that the account figures were higher by his calculation as opposed to the lower amounts that the auditor came up with. I don't know if Peymon is telling the truth here - likely not, since he and Truth seem to be complete strangers to each other - but even if he is not lying, he is actually submitting a brief that ostensibly shows that there years that would have required a tax return filing. This is not something you want to establish in court as a fact if you are worried about a criminal tax case based on failure to file.

It will be interesting to see if the appellate court will rule against the BLS standards being allowed by Tax Court. Such a method has had a high bar set by the courts to justify tax assessments in the absence of concrete records. Given Peymon's reputation for being a promoter of tax-denial hogwash, the justices may be willing to give the government leeway on this issue.

(4) Peymon and April moan and whine that the IRS would not meet with them. My guess is that the IRS refused to meet because Peymon was simply going to show up and attempt to turn the audit into arguing about tax laws instead of providing the information that the IRS requested for the audit. I have no doubt that he already had mailed them his "tax arguments" package upon the IRS making contact about the audit so the IR was under no false impression about Peymon's intention. And Peymon and April could have simply sent in the request information by mail or fax to the auditor as an attempt to resolve the audit. But they didn't and now our crooked couple is pretending that they had the information all along and wanted to submit, but the IRS wouldn't let them.

(5)

CORRECT FACTS #3): APRIL only helped with 3 Annual Freedom Rallies of
Freedom Law School during the years 2001 through 2006 which are at issue here;
one in November 2002, another on March 2004, and the last one in March 2006.
There is NOTHING in the record that APRIL had any connection whatsoever with
the Freedom Rallies in 2001, 2003 or 2006.

I don't know if the 9th is going to allow Peymon to split hairs over what years April was either involved or not involved. It seems flimsy that he is claiming her involvement was only periodic and infrequent. Given that she had involvement over the six years including the last year in question, I don't think it is unreasonable to presume that April was acting in concert with Peymon for the entire period. And the fact that April has no explanation as to why deposits were going into her account if she was not employed as a wage earner is going to tend to support the allegation that she was working hand in hand with Peymon.

[Burnaby49]

The standard practice of doing a substitute-for-return (SFR) is not to allow a taxpayer anything other than the filer's standard deduction and exemption. The government is not going to guess or err on the side of the taxpayer in creating unsupported deductions, credits, or exemptions. That burden has always been on the taxpayer.

Exactly the same in Canada. If the non-filer has legitimate deductions they have to prove it. This is what the government did for all of the Paradigm non-filers, taxed them on gross income with no business expenses included.

[juan galt]

Hey, wserra. Stevens was quiet for about a year and has recently posted some new YT vids. I post a reaction vid every time he does. I made 3 YT vids on Peymon and even had a livestream "debate" with him this past summer. Part of it is in my YT vids. So, that's been my "focus" - posting reaction vids to sov cit pseudo-lawyers and litigants. Been catching up reading posts here. Have a great New Year.

[jcolvin2]

With respect to his argument that the use of BLS statistics was a due process violation, Peymon does not appear to have addressed section 7602(e) of the Internal Revenue Code, which provides:

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.

In light of this statute, enacted in 1998 to prevent perceived abuses (including proposed deficiencies based solely on BLS statistics), I cannot imagine that the Ninth Circuit would find that there was somehow a due process violation. Moreover, Peymon does not appear to have seriously contested the "reasonable indication that there is a likelihood of such unreported income" test, either in his appellate brief or before the Tax Court.

[The Observer]

In light of this statute, enacted in 1998 to prevent perceived abuses (including proposed deficiencies based solely on BLS statistics), I cannot imagine that the Ninth Circuit would find that there was somehow a due process violation. Moreover, Peymon does not appear to have seriously contested the "reasonable indication that there is a likelihood of such unreported income" test, either in his appellate brief or before the Tax Court.

I think that is because Peymon is fearful of opening the door to allowing the government to ask him some embarrassing questions, as well as demanding proof, about how he was able to afford things like a house, car, travel, etc.

The fact is that Peymon should have just filed all the returns and paid the taxes as he went along. He would have been able to lie to his victims that he wasn't paying or filing and they would never be able to prove it. Instead he jumped into this rabbit hole of his own making.

[noblepa]

The fact is that Peymon should have just filed all the returns and paid the taxes as he went along. He would have been able to lie to his victims that he wasn't paying or filing and they would never be able to prove it. Instead he jumped into this rabbit hole of his own making.

Also, in that scenario, the fact that the IRS wasn't hassling him could be used as "proof" that his techniques worked to keep the IRS off of his back.

"I used these techniques and never filed a return" (a lie).

"The IRS has not audited me or come after me for unpaid taxes" (the truth)

"Therefore, my techniques work" (another lie, but seemingly consistent with the first two statements)

[wserra]

Last week, both Peymon and April filed amended briefs with the Ninth Circuit. Aha, I thought, Peymon just realized that he had left out his sure-fire arguments that beat the IRS every time. After all, as he claims on his site, "Freedom Law School exposes the fact that the Income Tax is a huge fraud on the American People, seeing as no law requires the average American to file and pay income taxes. . . . Peymon and Freedom Law School [Payme's non-freedom non-law non-school scam - WS] has helped its students beat the IRS and zero out illegal IRS tax claims". So here we go - IRS, nothing for you! Zero! Right?

Well, no. No "there is no law", no "the requirement to file a return violates the Fifth Amendment", no "the 16th Amendment is not a part of the Constitution". None of the stuff for which he charges the marks a lot. Just more whining about how the IRS is a big meanie for hitting them with stuff it shouldn't have - when they didn't file at all.

So, Peymon - we know you're reading this. After all, you started the thread. So perhaps you'll explain why that nonsense is worth what "Freedom Law School" charges people too dumb or desperate to know better, but not good enough for Peymon Mottahedeh.

[NYGman]

What do you you mean it doesn't work. The IRS going after him with all their might is 1000% proof it works, as their only goal is to shut him down with trumped up charges. Exactly because there is no law, is why they are going at him hard. Don't you worry, he has a full proof plan to defeat them in court and prove once and for all he is right. He is just biding his time to make it a Perry Mason moment in court, where on cross he plans to spring his theories on the IRS and dazzle them with his brilliance, so that they will admit under oath that he is right. If he spills the beans now, it will allow them to prepare and attempt to subvert his show of intellect.

[The Observer]

It appears the biggest gun in Peymon's brief is that the Tax Court judge ruled erroneously in allowing the IRS to use Bureau of Labor statistics in developing an assessment against April and him. It's an argument that doesn't really have any evidence provided by Peymon as to why the IRS should not have been allowed to use BLS statistics other than they didn't add the summonsed bank deposits correctly. It isn't clear to me whether the auditor or the revenue officer ("John Black") had the actual correct figures.

But even if we go with the higher figures that Peymon claims with which the RO came up, it really only demonstrates potentially viable income for the Mottahedehs for four out of the six years in question. Given that we know that Peymon had a house, children and a wife living with him, it is a little absurd to think that they were able to get by on an amount of $11,000 to $21,000 for the other two years. And, as Wes pointed out above in regards to Peymon not using the "proven" methods of his Freedom Law school malarkey, Peymon fails to explain why he shouldn't have to file a return. Why is this important? Because Peymon, in arguing that Black's figures should have been used, is actually agreeing that there were deposits that would show that he and April had income. In a normal world, any non-filer could have shut down the audit by simply filing the returns, claim the standard deductions/exemptions, and leave the auditor helpless. But we know why Peymon didn't do this, because he thinks he can avoid future audits and the burden of proof shifting to him by not filing.

I am guessing the response or pleading from the IRS addressed Peymon's illegal theories and how he makes money by selling them to his victims, thus the reason for the judge ruling in favor of the IRS. After all, why allow a con artist to play on both sides of the street?

[wserra]

I am guessing the response or pleading from the IRS addressed Peymon's illegal theories and how he makes money by selling them to his victims, thus the reason for the judge ruling in favor of the IRS. After all, why allow a con artist to play on both sides of the street?

The govt just filed its answering brief in the Ninth Circuit, and it did what Obs predicted. In the process, the govt points out the one way in which Mottahedeh followed his own advice: Don't cooperate with the IRS. Some interesting excerpts:

Peymon Mottahedeh, with the assistance of his wife, April Mottahedeh, runs Freedom Law School. According to the school, “[t]here is no statute that makes any American Citizen, who works for a living in the United States of America, liable or responsible to pay the income tax.” Through the school, taxpayers promote a tax-avoidance scheme. They urge their students to (1) refuse to file tax returns or provide any information to the IRS and (2) argue that the IRS bears the burden of proving the amount of their unreported income . . . The school teaches that taxpayers need not comply with the recordkeeping requirements imposed by the Internal Revenue Code and Treasury Regulations . . . The school further teaches that tax-return filing is voluntary . . . The school preaches that compliance with the tax laws is disadvantageous . . . The school asserts that a taxpayer gains a strategic advantage by not complying with the tax laws because, according to the school, the taxpayer thereby shifts the burden of proof to the IRS

Record references redacted. Of course, Mottahedeh did not argue his own BS that no law makes you liable for income tax; we've commented on that before. As a result of the Mottahedehs drinking part of their own Koolaid,

Since taxpayers deliberately concealed their business records and avoided financial institutions to avoid leaving an audit trail, the IRS resorted to an indirect method of estimating their unreported income

And something I did not know: when the matter went to trial in the Tax Court,

taxpayers did not offer any evidence relevant to the determination of their correct taxable income, but rather invoked the Fifth Amendment privilege against self-incrimination in response to questions about their finances

As I've written before, my new reference standard for "chutzpah". Chutzpah usually does not go over well in court, and it won't here.

The heart of the govt argument:

Where a taxpayer fails or refuses to comply with these requirements, the IRS must resort to indirect methods to reconstruct his income. In that situation, the taxpayer’s tax liability may be computed by any reasonable means, and the IRS has wide discretion in choosing the appropriate method for doing so . . . The Commissioner’s determination of a deficiency based on unreported income is entitled to a presumption of correctness if evidence links the taxpayer to an income-generating activity and the method used to reconstruct the taxpayer’s income is rational . . . Where those requirements are met, the taxpayer bears the burden of proving, by a preponderance of the evidence, that the deficiency is excessive

This is all unimpeachably correct. Black-letter, in fact.

Prediction: God only knows how long it will take the Ninth to rule on this. It isn't even fully submitted until Mottahedeh has the opportunity to reply. When the Ninth gets around to it, however, the decision will be short and sweet: Mottahedeh loses. Again.

[wserra]

Ol' Payme is doing his best to get his name out there lately. In fact, the crazier the host, the more he apparently likes it. Of course, it could be that no one will put him on the air except for the crazy hosts.

So most recently, he appears on the show of Lee Merritt, one of the docs who promotes COVID disinformation. I didn't listen to the whole mess by any means. I did listen to enough to get a laugh out of how Merritt wants to talk about Biden's bioweapons labs in Ukraine (Go Vlad!) while Payme is trying to talk about how the income tax only applies in DC.

Tell us again, Peymon, why you didn't try that one out in the Ninth Circuit? Why, there's no need to get all technical about the ability of the IRS to recreate your income if the tax doesn't apply to you in the first place. Right?

[The Observer]

Thanks for linking the brief, Wes.

Some other interesting things:

(1)

A former client of Peymon’s testified that he paid Peymon $22,000in cash to represent him in a case before the California Franchise TaxBoard.

That's quite a hefty fee to pay for representation, especially if the rep is just going to lose your case in the end. No wonder the "former client" decided to pony this information up to the government. It is rewarding to see that a paytriot turn on his mentor.

(2)

Next,...[the revenue agent auditing Peymon and April]...served third-party summonses on a bank with which
she had reason to believe they did business and hotels at which Freedom Law School held seminars, seeking information regarding taxpayers’ business activities.

Although the hotel records were not helpful in determining amounts of income, they confirmed that Freedom Law School was collecting cash entrance fees for its conferences...[T]he bank records, including canceled checks, revealed that April received payments made to Freedom Law School for entrance fees and instructional materials, which she deposited into her bank account.

This demonstrates a lesson that Peymon did not learn. Despite his efforts to not leave a paper trail, Peymon did leave one. Most businesses don't operate the way Freedom Law School does - especially banks and hotels. While hotels might accept cash in payment, they are going to document the receipt of such cash and are going to notate who that cash was received from in their accounting system. And at some point, Peymon was going to have to accept a check from a "client" who simply wasn't going to walk in $22,000 in cash to him. The revenue agent demonstrated intelligence and persistence in pursuing this lead, it demonstrated to the court that the IRS made a diligent effort to document the Mottahedehs' income and the lengths that they were going to hide it.

(3) The brief points out that the Tax Court did not rule on IRC 7491(b) regarding where the burden of proof lay and whether the Mottahedehs should have been excepted. So that completely undermines Peymon's argument. Instead

...the court explained that it need not decide that issue because it resolved the factual issues in the IRS’s favor “based on a preponderance of evidence.” (Id.) The court explained that its finding that the IRS determined the correct income amounts “are supported by three types of evidence”: (1) evidence of direct payments taxpayers received, such as the $22,000 a client paid and payments from Freedom Law School customers deposited into April’s credit-union account...

(4) April continued to attempt to dodge liability in the Tax Court trial by raising the fact that she and Peymon had executed a post-marital agreement waiving community property rights to income generated by Peymon. The judge ruled that the agreement did not cover any income that April helped generate for Freedom Law School since the clause in the agreement specified "his own labor and/or initiative...”. It will be interesting to see if the Ninth agrees with the Tax Court on this.

Of course, Mottahedeh did not argue his own BS that no law makes you liable for income tax; we've commented on that before...

Very true. But I think it is important to point out, at least for the benefit of any potential clients of Freedom Law School that Peymon and April did use many of the tactics and ploys that they sell to their marks: hiding income, dealing in cash, failing to keep proper records for a business, refusing to file returns, improperly invoking the Fifth Amendment in response to legitimate questions about income, expenses and assets, deliberately employing stalling techniques with the IRS and the courts - all of this and more went down to defeat in Tax Court. I suspect the Ninth will uphold the Tax Court decision in its entirety. And I hazard a guess that Peymon might ask the Supremes for a writ of cert, but only for dramatic license so he can tell the rubes that he is still carrying on the fight against the corrupt judiciary.

[Arthur Rubin]

Hiding income isn't usually a Tax Protester method, is it? More of a general con artist....