Posted on 02/08/2004 1:24:06 PM PST by Mark
Los Angeles Daily News
Tax evasion guru claims insanity E-mail points to ruse in case of federal income levy foe
By David Cay Johnston The New York Times
Saturday, February 07, 2004 -
Irwin Schiff, the nation's best known promoter of claims that no law requires the payment of income taxes, suffers from delusions including a fantasy that he alone can properly interpret the tax laws, according to papers that he had his lawyers file in U.S. District Court in Las Vegas.
The filing, made Jan. 23, is highly unusual, especially in a civil lawsuit. The document asks a judge to deny a summary judgment in favor of the Justice Department that Schiff owes $2.5 million in income taxes, fraud penalties and interest.
The insanity claim is also a ruse, according to an e-mail message sent Tuesday to Schiff's thousands of supporters by his girlfriend, Cindy Nuen.
"We are sick about having to use this defense," Nuen wrote in her e-mail message. "It is ridiculous."
She wrote that this defense is the only way for Schiff to escape fraud penalties because, she wrote, his lawyers are "scared" to tell judges that "the income tax law is meritless and frivolous."
Schiff's personal psychiatrist, Dr. Luis Carlos Ortega of Las Vegas, wrote last year, in notes placed in the court file, that Schiff has suffered from paranoid delusions about the tax system for decades.
Ortega attributes the mental illness, after a normal upbringing, to Schiff's loss of his own money and that of clients of his Connecticut insurance brokerage firm in an oil industry tax shelter decades ago that turned out to be a Ponzi scheme. "Schiff's distorted beliefs" that the tax system is a hoax "appear to have grown out of his business failures," Ortega wrote.
Schiff's assertion that he is insane comes as the 9th U.S. Circuit Court of Appeals in San Francisco is scheduled to hear oral arguments Tuesday on whether Schiff can be barred from selling his book "The Federal Mafia: How the Federal Government Illegally Imposes and Unlawfully Collects Federal Income Taxes."
His appeal has drawn support from the American Civil Liberties Union's Nevada chapter, the American Booksellers Association, the American Publishers Association, the American Library Association and the writers group PEN.
Schiff contends that Judge Lloyd D. George of U.S. District Court in Las Vegas banned his book, although the order allows anyone to sell the book except Schiff, Nuen and an associate.
The order also requires Schiff to turn over the names of all those who bought the book from him so the Internal Revenue Service can audit them. The IRS says in recent years it has identified more than 5,000 returns reporting zero income, the technique taught in the book, forcing it to spend taxpayer money pursuing these individuals.
Late last month a promoter of a competing theory that Americans are tricked into taxes, Thurston P. Bell of Hanover, Pa., complied with a court order to give the IRS a list of his clients, striking a serious blow at the so-called tax honesty movement.
Schiff, a convicted tax evader, has a large core of dedicated followers, especially in Las Vegas, where he has lived since his second release from prison a decade ago. He has prospered in recent years from sales of his books and lecture fees, but he has also engaged in increasingly nasty disputes with proponents of competing theories, like the one Bell marketed, that Americans are tricked into paying income taxes. None of these theories has had any success in court.
Don't we all?
It would be hilarious if he sued the IRS for damages.
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