Posted on 02/07/2004 4:21:27 PM PST by Central Scrutiniser
Tax Protester Tells Federal Court That He Is Delusional
By DAVID CAY JOHNSTON
LOS ANGELES, Feb. 6 - 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 Federal District Court in Las Vegas.
The filing, made on 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 Mr. Schiff owes $2.5 million in income taxes, fraud penalties and interest.
The mental health claim is also a ruse, according to an e-mail message sent on Tuesday to Mr. Schiff's thousands of supporters by his girlfriend, Cindy Nuen.
"We are sick about having to use this defense," Ms. Nuen wrote in her e-mail message. "It is ridiculous."
She wrote that this defense is the only way for Mr. Schiff to escape fraud penalties because, she wrote, his lawyers are "scared" to tell judges that "the income tax law is meritless and frivolous."
Mr. Schiff's personal psychiatrist, Dr. Luis Carlos Ortega of Las Vegas, wrote last year, in notes placed in the court file, that Mr. Schiff has suffered from paranoid delusions about the tax system for decades.
Dr. Ortega attributes the mental illness, after a normal upbringing, to Mr. 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 shelter turned out to be a Ponzi scheme.
"Mr. Schiff's distorted beliefs" that the tax system is a hoax "appear to have grown out of his business failures," Dr. Ortega wrote.
Mr. Schiff's assertion that he is delusional comes as the United States Court of Appeals for the Ninth Circuit in San Francisco is scheduled to hear oral arguments on Tuesday on whether Mr. 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 Nevada chapter of the American Civil Liberties Union, the American Booksellers Association, the American Publishers Association, the American Library Association and the writers' group PEN.
Mr. Schiff contends that Judge Lloyd D. George of Federal District Court in Las Vegas banned his book, although the order allows anyone to sell the book except Mr. Schiff, Ms. Nuen and an associate.
The order also requires Mr. Schiff to turn over the names of all those who bought the book from him so the Internal Revenue Service can audit them. The I.R.S. 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.
Last week 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 I.R.S. a list of his clients, striking a serious blow at the so-called tax honesty movement.
Mr. 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 rancorous disputes with proponents of competing theories, like the one Mr. Bell marketed, that Americans are tricked into paying income taxes. None of these theories have had any success in court.
I imagine some folks are running the shredder tonite.
We're sick of having to listen to it too, lady.
Pay the Man, Irwin.
Not every case challenging certain aspects of the income tax has been lost. There have been some recent and notable victories
Perhaps you will name one, that has resulted in the nullifying or repeal of some section of the tax law. As opposed to a jury merely finding a person not guilty for lack of "willfully and knowingly" evading etc.
There is a substantial difference between not being found guilty in a criminal sense, and being in violation of the civil aspects of the income tax law. You can get of the hook for a jail term if the jury does not find the willful element of the criminal code present. That, however, still leaves you very much on the hook to pay the taxes plus late fines, fees, civil penalties, legal costs ...
If you turn him in and give the IRS enough info to nail him for fraud, they will give you a bounty. (10% of the amount recovered).
Hint- make sure your returns are in order before blowing the whistle
He said nothing about fraud. He said he hadn't filed.
And by the way, you would make a good little serf.
You are correct, and that is why I qualified my answer. You have to give them hard, specific evidence of tax fraud to collect, usually not very easy to do.
And by the way, you would make a good little serf.
You sound like you are opposed to a person making a little money under the free enterprise system.
Take note sometime, about how citizens of states who have income taxes are made subject to the tax. It usually goes something like "If you are subject to federal income taxes, then you are liable for the state income tax".
Doesn't that just tickle your toes? It's like waving a wand. Abracadabra comes to mind.
Most tax cases in this country are decided "su juris", meaning the law does not have to be examined, because it is considered "settled law", and so the decision is based on a previous decision. There have been some recent cases where judges have begun to take a second look at previous decisions, and re-examine the actual law.
I myself only file returns three years after the actual tax year ended, and I get interest on any refund that was due. I have never suffered any reprecussions from the IRS. I'm not quite willing yet to go as far as my brother has, because there is more at stake in my case.
You are right. No cases have overturned any law. Then again, there would have to be a law to nullify or overtun first.
As the law is totally consitutional, and has been challenged repeatedly. This is somewhat of a null statement. Of course there is no "law" to nullify or overturn. A valid, constitutional law will not be overturned in any case.
There have been some recent cases where judges have begun to take a second look at previous decisions, and re-examine the actual law.
True, and as one circuit level appellate ruling has put it:
United States v. Melton, No. 94-5535 (4th Cir. 1996)
ARGUED: Lowell Harrison Becraft, Jr.[one of Schulz & Co. legal beagles], Huntsville, Alabama, for Appellants.The jury heard not only the United States's evidence against the Meltons, but also the brothers' defense that they believed they were not "persons liable" for federal income tax. The jury rejected the excuse, however, and convicted them on nearly all counts.
- [Subtitle A] "Section 1 of the Internal Revenue Code imposes a federal tax on the taxable income of every individual.
26 U.S.C. s 1."
- [Subtitle A] "Section 63 defines "taxable income" as gross income minus allowable deductions."
26 U.S.C. s 63.
- [Subtitle A] Section 61 states that "gross income means all income from whatever source derived," including compensation for services.
26 U.S.C. s 61.
- [Subtitle F] Sections 6001 and 6011 provide that a person must keep records and file a tax return for any tax for which he is liable.
26 U.S.C. ss 6001
26 U.S.C. ss 6011.
- Finally, section 6012 provides that every individual having gross income that equals or exceeds the exemption amount in a taxable year shall file an income tax return.
26 U.S.C. s 6012.The duty to pay federal income taxes therefore is "manifest on the face of the statutes, without any resort to IRS rules, forms or regulations." United States v. Bowers, 920 F.2d 220, 222 (4th Cir.1990). The rarely recognized proposition that, "where the law is vague or highly debatable, a defendant--actually or imputedly--lacks the requisite intent to violate it," Mallas, 762 F.2d at 363 (quoting United States v. Critzer, 498 F.2d 1160, 1162 (4th Cir.1974)), simply does not apply here.
Each Melton brother had gross income in excess of the amount requiring the filing of a return in each of the years at issue. Therefore, each was a "person liable."
Citizens have been aquitted by a jury of tax evasion for not filing returns, and not paying taxes the government deemed due.
All are merely outs from the jail half and generally for lack of a finding of the "willful" element you left out of the charge. Such findings however do not release the defendant from the tax, fees and penalties due. Guess what, if they continue to refuse payment, a new charge of willful failure to pay just crops up again, for another try at jail.
It would be better to get rid of all the legal jeopardy and work to repeal the d'mned income/payroll tax system in the first place, and go to something closer to what the Founders saw as appropriate:
Patrick Henry, Virginia Ratifying Convention June 12, 1788:
- "the oppression arising from taxation, is not from the amount but, from the mode -- a thorough acquaintance with the condition of the people, is necessary to a just distribution of taxes. The whole wisdom of the science of Government, with respect to taxation, consists in selecting the mode of collection which will best accommodate to the convenience of the people."
- It is fairer to tax people on what they extract from the economy, as roughly measured by their consumption, than to tax them on what they produce for the economy, as roughly measured by their income
The Records of the Federal Convention of 1787
(Farrand's Records)
James Mchenry before the Maryland House of Delegates.
Maryland Novr. 29th 1787--
Appendix A, CXLVIa, page 149, S9."Convention have also provided against any direct or Capitation Tax but according to an equal proportion among the respective States: This was thought a necessary precaution though it was the idea of every one that government would seldom have recourse to direct Taxation, and that the objects of Commerce would be more than Sufficient to answer the common exigencies of State and should further supplies be necessary, the power of Congress would not be exercised while the respective States would raise those supplies in any other manner more suitable to their own inclinations --"
I am still in the evaluation mode though, and willing to listen to any clear argument either way
Virtually every argument pro and con as reguards tax protest and legal issues of the income tax has been discussed here on FR over many years of threads. One of the primary resource that has cropped up in these threads is:
Tax Protester FAQ
by Daniel B. Evens an Attorney specializing in taxes and estate law.
It is a very good place to start from to find out what the Court's and Deptment of Justice positions are with respect a vast range of specific tax arguments offered up daily in the courts. It also is an excellant reference point for tracking down the cases that lay the foundation of the income tax law.
The following threads, from February 2000, were a challenge for folks to bring on their best arguments and lay the positions all out.
There is alot of information & sources contained in these threads. Some of hyperlink references used in them are now dead however, but the threads still remain a good resource to start from.
Often, it is only necessary to google on specific text from a quote to relocate another source on the web containing the same material.
You might find the debate heated, and crazy in places, but it is informative.
ALL TAX PROTESTER ARGUMENTS TOTALLY DEBUNKED
TAX PROTESTER ARGUMENTS TOTALLY DEBUNKED [Thread 2]
TAX PROTESTER ARGUMENTS TOTALLY DEBUNKED [Thread 3]
TAX PROTESTER ARGUMENTS TOTALLY DEBUNKED [Thread 4]
For example, he is now being sued by one of his "customers", Steven Swan, who followed Schiff's instructions and ended up ruined financially. So Swan is suing Schiff for something that resembles malpractice or product liability. Schiff, in defending himself, has argued that - altho he brags on shortwave radio and his website about never paying taxes and so forth - Swan should have known better than to rely on his instructions because it is no secret that Schiff has been repeatedly sent to the slammer.
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.
At a minimum his description of the FedGov as Mafia seems accurate
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