The Tynecastle club will next month go before a tribunal to make their case.
The bill relates to the payment of players who were signed on loan from FBK Kaunas, the Lithuanian club that were owned by Hearts majority shareholder Vladimir Romanov. The charges relate to contracts going back seven years.
However, Fedotovas is confident no regulations were circumvented.
"This tax case brings us back to 2005 and 2006, and some years after that, when players have arrived on loan from Lithuania, and we are facing a case in relation to the earnings of these players in Lithuania," he said.
"We believe we can defend this case, we are bringing documents together and preparing our defence. Some time in the future this case will be heard and we are hopeful that all the evidence that we produce will be able to defend this case."
Supporters have been asked to buy shares in the club, an initiative which Hearts hope will net up to £1.8m. Fedotovas stated that his club had "exhausted all possibilities available" prior to turning to fans, and intimated that the financial health of Hearts could deteriorate further if supporters do not buy into the idea.
"The share issue is a signal and an alarm to the people who are truly concerned about the club," he said. "If this strategy fails the club will be faced with a tough financial reality.
"Mr Romanov totally understands the situation and is supportive of what we do. We all agree that this is probably the only way forward for the club."