October 22, 2003
Extremism in the name of preventing fraud can be a vice

Jonathan Ichikawa points out the case of tax loony Irwin Schiff, who was recently hit with a restraining order that forbids him from distributing his latest tome, Federal Mafia: How the Government Illegally Imposes and Unlawfully Collects Income Taxes, from speaking about income taxes, and from preparing someone else's tax return. It also required him to turn over his customer list to the government, an order which was stayed by the 9th Circuit Court of Appeals.

I've written about guys like Schiff and the scams they peddle (most recently here), and it's vitally important to understand that what he is doing, no matter how fervently he may believe in it, is fraud. People go to jail and pay hefty penalties to the IRS for following his advice. Check out the invaluable Tax Protesters FAQ and see how often Schiff is mentioned by name or by court decision and you'll see the extent of the problem. As such, I totally understand the government's desire to keep him from getting even more otherwise law-abiding citizens into trouble.

That said, this order overreaches by at least half. Preventing Schiff from preparing tax returns strikes me as within the bounds of constitutionality, and preventing the sale of his book could be justified as an anti-fraud measure (had he been giving it away, he'd have a clearer free speech argument in my mind). Preventing him from speaking about the income tax, however, is wrong. He still has the right to his stupid opinions. The practical effect of doing this is to make him seem like a rebel or a martyr instead of just a grifter. In a perfect unlimited-resources world, the ideal answer would be to have someone follow him around at all times to counter what he says. We can't do that, so some folks will have to learn the hard way.

As for his customer list, no way in hell, and I'd say that even if the Attorney General wasn't John Ashcroft. I'd like to believe that the government is motivated at least in part by a desire to give those customers some education and the opportunity to voluntarily amend their returns, but that won't be what happens. I'm sure all Schiff-inspired tax returns have a fair amount of commonality among themselves, so fire up the computers and let the pattern-matchers do their thing. Nice try, but no dice.

Posted by Charles Kuffner on October 22, 2003 to Legal matters | TrackBack

Running around in the political circles I do, I sometimes meet folks who maintain the "income tax is illegal" position. I have a standing offer for them.

Let me attend their audit/trial. If the IRS agent/judge says "Wow! OK, you figured it out. You got us, you don't have to pay," I'll plop down a couple of hundred for their book.

I doubt that will happen. I'm all for abolishing the income tax, but wishful thinking won't make it go away.

Posted by: Rob Booth (Slightly Rough) on October 25, 2003 12:46 PM