9th Circ. Rules That Doctor Subject to Tax Fraud Penalties

According to Law360, an infectious diseases doctor must pay penalties for tax fraud based on clear evidence that she and her husband lied about their income and expenses, among other things, the Ninth Circuit ruled Thursday, July 21, 2022 in Mojdeh Najle-Rahim v. Commissioner of Internal Revenue, case number 20-72031, in the U.S. Court of Appeals for the Ninth Circuit. 

Mojdeh Najle-Rahim and her husband understated their income, overstated their expenses, hid information from their tax preparer and failed to keep records and cooperate with the Internal Revenue Service, a three-judge panel ruled, upholding a 2019 U.S. Tax Court decision.

Najle-Rahim had argued that testimony from her tax preparer before the Tax Court had been misleading, but the panel found the tax preparer's testimony was credible. It was Najle-Rahim and her husband who lacked credibility when they tried to blame their tax preparer for the fraud, the panel said.

The couple were "educated and sophisticated professionals who had demonstrated their ability to pay careful attention to detail," the panel said.

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