Background
Born in Iran in 1962, Peymon Mottahedeh is a naturalized American citizen with a bachelor's degree in business administration for California State University at Long Beach.
Theories Advocated/Promoted
Mottahedeh's web site includes the following claims:
His website also includes an offer of a $300,000 "reward" for anyone who can: (a) show the statute requiring Americans to file an income tax return and pay an income tax, (b) show how Americans can file an income tax return without giving up their 5th amendment right, or (c) prove that the 16th amendment was lawfully added to the United States Constitution.
Books, Web Sites, Videos, and Organizations
Although he is not a lawyer, Mottahedeh styles himself as the founder and president of "Freedom Law School."
Court Actions
Mottahedeh did not file income tax returns for the years 1992-1994, and filed a petition with the Tax Court when the IRS sent him notices of deficiencies for those years. The notices of deficiencies were upheld by the Tax Court and by the 9th Circuit on appeal. Mottahedeh v. Commissioner, 82 AFTR2d Par. 98-5597, 98 TNT 242-6, No. 98-70457 (9th Cir. 11/19/1998), affirming No. 10592-96 (U.S.T.C. 1/5/1998). On September 15, 2008, those same tax liabilities were reduced to a judgment in favor of the United States, and against Mottahedeh, in the amount of $90,049.57, representing the income tax for the years 1992, 1993, and 1994, plus penalties and interest through 5/31/2008. United States v. Peymon Mottahedeh, No. CV 08–2740 PA (CWx) (U.S.D.C. C.D.Cal. 9/15/2008), appeal dismissed as untimely, No. 08-56980 (9th Cir. 11/1/2010).
Mottahedeh and his wife also brought suit against the IRS, but the district court dismissed the action for failing to serve the defendant properly and for failing to state a claim under the Freedom of Information Act. Mottahedeh v. Tamborini et al., D.C. No. CV-06-02356-SJO (U.S.D.C. C.D. Cal.), aff'd No. 07-55530 (9th Cir. 11/6/2008).
On December 29, 2014, the United States Tax Court upheld deficiency determinations by the Internal Revenue Service against Mottahedeh and his wife for income tax, self-employment tax, penalties for failure to file, penalties for failure to pay, and penalties for failing to make estimated tax payments for the years 2001 through 2006, for which the couple had failed to file tax returns or pay any taxes. Although the Court indicated that the IRS had asserted over $92,000 in related taxes, the Court's decision does not expressly state that the couple actually contested the tax amounts. Rather, the couple contested the method by which the IRS computed their income — a method upheld by the Court. The Court concluded that the couple had earned amounts in each year ranging from $44,757 up to $83,629, the amounts used by the IRS to compute the $92,000 in taxes. The Court specifically stated that Mottahedeh's Freedom Law School "promoted various techniques for evading the payment of federal income taxes," and that Mottahedeh and his wife were heavily involved in operating the School. Mottahedeh v. Commissioner, T.C. Memo 2014-258, No. 022039-11 (12/29/2014). On January 28, 2015, the Tax Court ruled that Peymon Mottahedeh had valid Federal income tax and penalty deficiencies for years 2001 through 2006 of $105,756, and that his wife had Federal income tax and penalty deficiencies of $33,949. As of early June 2020, the couple's appeal is pending at the Court of Appeals for the Ninth Circuit (case no. 19-71432 for Peymon and 19-71410 for his wife).
Students/Disciples/Associates
Mottahedeh claims Joseph Banister as one of his students.
But what is interesting about Mottahedeh is not who he has associated with, but the number of other tax denier gurus who have been publicly critical of him or have refused to be associated with him.
In November 2016, 63 year old Richard Thomas Grant of Point Richmond, California was sentenced to 33 months in prison for tax evasion. The government found that Grant was a member of Mottahedeh's Freedom Law School. In 2001, Grant stopped filing Federal returns and paying income taxes. In announcing the conviction, the government noted that Peymon Mottahedeh had attempted to assist Grant in efforts to frustrate the IRS by helping Grant file several unsuccessful law suits. For the charged years 2005 through 2009, Grant’s partnership income was $509,339, $566,741, $486,062, $598,977 and $604,706, respectively. Grant's income over a five year period was over $2.7 million.
The government stated that to conceal his assets and income, Grant reduced the use of checking accounts and began depositing his partnership funds at a so-called warehouse bank known as MyICIS in Berryville, Arkansas. The government shut down MyICIS, and Grant used another bank to convert partnership distributions to cashier’s checks and cash to avoid having to use a bank account.
Grant was also ordered to pay restitution to the IRS of over $402,000.
