"It's So Simple, It's Ridiculous"

Taxing times for 16th Amendment rebels.

Brian Doherty from the May 2004 issue

(Page 8 of 11)

 

Far from that sort of futile reliance on concepts of personal sovereignty that U.S. law just does not recognize, I encounter a remarkably frank and refreshing approach from Peymon Mottahedeh and his Freedom Law School. (Technically, he tells me, the school is a function of a church he runs.) Peymon has a table set up at the We The People conference seeking customers ("students," he prefers to call them) for the "tax defense funds" he sells (both "simple" and "royal" packages).

 

Peymon and his crew do believe the basic catechism of the movement: that one technically does not have a legal obligation to pay the individual income tax. They also know these arguments never succeed in court. When we meet later at his U.S. Code-lined office, attached to his home on the rural outskirts east of Los Angeles, he tells me he’s never seen much value in waving your hands in the air tauntingly and bellowing, "Here I am, IRS, and I don’t believe in you!"

 

Thus Peymon advocates simply not filing and relying on the luck of the draw. Peymon claims more than 60 million Americans a year don’t file. (There is no official number for this, though some more recent estimates from the government have it that only around 10 million people a year who are supposed to be filing aren’t. The IRS admits that in the last three years fewer than 230 nonfilers a year have been convicted.)

 

The next step is to ignore the threatening letters and audit re--quests you receive until you get an official Notice of Deficiency from the IRS. Then you go to Tax Court and stonewall like crazy, making the IRS prove you owe them something without the aid of the "tax confession form," as Peymon calls the 1040. (This all works better for you if you are self-employed and the IRS hasn’t already gotten its hands on your money through withholding.)

 

Peymon is a natural-born salesman, a handsome Iranian man with thick black hair swept back. He says he doesn’t really fear retaliation from the IRS since, after escaping from the Shah’s Iran, he feels he’s living a second life now anyway. "If we lose our freedom here, where else are we going to go’" he asks. Since he’s been selling this advice for only a couple of years, and tax court proceedings often stretch out that long, he says he doesn’t have solid stats on how well this approach is doing, and he shies from announcing his number of customers -- wouldn’t the IRS love to know’ But he thinks his approach is the smartest one the movement has come up with. The IRS is a big bully; the smartest thing to do is stay out of the bully’s way and not call attention to yourself.

 

It’s too late for that for the movement’s biggest star, Irwin Schiff. At the We The People conference I witness a young fellow enthusiastically shake the hand of this compact 75-year-old man with a broad and squeaky voice and call him his hero; Schiff takes it in stride. He is the man, the granddaddy, in many ways the Founding Father of the modern tax honesty movement. Some of his signature ideas were floated by earlier figures, including Pete Soehnlen and Robert Golden, but he became the first mass phenomenon of tax honesty with his 1982 book How Anyone Can Stop Paying Income Taxes, originally self-published and later distributed by Simon & Schuster. He says he’s sold nearly half a million copies of his various books. Schiff used to sell tax shelters, and he first came to prominence in anti-statist circles with a 1976 Arlington House hit called The Biggest Con -- which, despite the title, is a standard right-wing peroration against taxing, spending, and Social Security and does not take a radical anti-income tax stance.

 

Even though he tells us anyone can stop paying income taxes, Schiff has spent a few years in prison as a result of criminal prosecutions on various charges stemming from his own failure to pay taxes. He has been out of jail since the early ‘90s and has avoided "failure to file" convictions since then by filing an innovation he popularized, the "zero return." That means you file a 1040 but claim to have had no taxable income -- which by Schiff’s reading of the tax code and various Supreme Court cases, he does not (and neither do you).

 

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