The Internal Revenue Service (IRS) is structurally collapsing from within, similar to the fall of the Soviet Union. The agency is in such a bad state—with a 27% workforce reduction and declining audits—that it cannot pursue the estimated 80 million Americans who do not file income tax returns. (Read below the video – IMPORTANT as not everything seems true on the vid)
As you folks know, we at Whatfinger News look into everything. From our side, from the enemy, and from those who we wish were correct, like this guy. Alex and Luke dug into this one. Read below before following his advice.
Who he is and how the “not paying” claim works
Mottahedeh has run Freedom Law School since 1996. It is not an accredited law school. It sells conferences, packages, “legal insurance,” and a theory that federal income tax applies only inside a narrow federal jurisdiction (D.C., territories, federal workers), not to ordinary residents of the 50 states. He also promotes the idea that Form 1040 is a voluntary “confession” that creates liability, and that if you never sign one the IRS has no case.
Public court record does not show a quiet, unchallenged 33-year exemption:
- Tax Court held him and his wife liable for tax and penalties on Freedom Law School income (2014). The Ninth Circuit later affirmed they owed about $93,000 for unreported years.
- He refused IRS summonses for records and client lists. A federal judge held him in civil contempt and imposed a $2,000-per-day penalty.
- A Freedom Law School member, Richard Grant, was convicted of tax evasion, sentenced to 33 months in prison, and ordered to pay more than $400,000 in restitution. The school’s public line is that Grant ignored their recommended lawyer.
So he has not been “left completely alone.” He has been audited, summonsed, held in contempt, and lost civil tax cases. He has not (publicly) been convicted of criminal tax evasion himself. That is not the same as the law agreeing with him. Promoters of these theories sometimes last a long time because the IRS prioritizes large, document-rich cases, civil collection is slower than people assume, and high-profile prosecutions of talkers are politically and legally messy. Students who actually stop filing after receiving W-2s and 1099s often do not fare as well.
What he says that has a factual basis
Several operational claims about the IRS in 2025–2026 are directionally true and backed by TIGTA, GAO, and reporting:
- Large staffing cut. TIGTA reported about 31,273 employees left between January 2025 and January 2026 — roughly 28–30% of the workforce after limited backfills. Examination and collection staffing fell about 27%.
- Enforcement dropped. Individual exam starts fell about 30% in FY2025; exam revenue fell about 35%. High-income exams also declined.
- Service is worse. Phone answer rates fell and hold times jumped. Taxpayer Advocate and outside testing documented this. Leadership turnover has been extreme (multiple acting commissioners in a short period).
- Legacy computers. The IRS still runs core systems on very old mainframe/COBOL technology. That is a long-standing, well-documented problem, not a new discovery.
- Many people never file a 1040. That is real. The IRS also has a large “tax gap,” part of which is non-filing.
Those points do not add up to “the income tax is optional for people in Texas, California, etc.”
What is not true (or is a recycled argument courts have rejected)
The core legal pitch is a set of frivolous tax arguments the IRS has catalogued for years in The Truth About Frivolous Tax Arguments. Courts treat them as settled losers. Typical versions:
- “United States” in the tax code means only D.C. / federal enclaves, so residents of the 50 states are outside the tax. Courts have rejected this repeatedly. The income tax applies to U.S. citizens and residents living in the states.
- Filing is “voluntary” because some IRS language and an old Supreme Court line (Flora) use the word “voluntary.” In tax law that means self-assessment (you compute your own tax first), not “optional.” IRC §§ 6011, 6012 and the regs require a return if you meet the income thresholds.
- Signing a 1040 is what creates the tax. Liability comes from the statute (income under §61, rates under §1, filing under §6012). The return reports it. Not filing does not erase the tax; it often leads to a substitute-for-return assessment, penalties, and collection.
- W-4 is a magic opt-in. Employers are required by law to withhold from wages.
The “80 million Americans don’t file so the IRS can’t touch you” line is the most misleading statistic in the video. About 160 million individual returns are processed in a typical year. Tens of millions of adults are not required to file because their income is below the filing threshold (Social Security-only retirees, low earners covered by the standard deduction and credits, etc.). That is not 80 million people with taxable wages sitting in open defiance. The IRS non-filing tax gap is real but far smaller than the slogan implies, and the agency uses W-2/1099 matching to find people with unreported wage and investment income. In 2024 it publicly targeted 125,000 high-income non-filer cases with third-party income data.
Willful failure to file can be a misdemeanor; tax evasion can be a felony. Most cases stay civil (letters, assessments, liens, levies). Criminal cases are reserved for willful, often large or flagrant situations. “They haven’t jailed 80 million people” is not legal advice.
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