Irvin Schiff's And His Battle Against Federal Income Tax

Irwin A. Schiff (b. 1928) is a prominent member of the United States group which refers to itself as the "tax honesty movement", and which has been referred to by the Internal Revenue Service and other government agencies as the tax protester movement. Schiff is known for writing and promoting literature that claims the United States income tax is applied incorrectly. Schiff also has a web site named "PayNoIncomeTax.com", which offered his various books for sale. He has lost several civil cases against the federal government and has a record of multiple convictions for various federal tax crimes, including a conviction in 2005 for which he was sentenced in early 2006. Schiff is currently serving a 13-plus year prison term at the Federal Correctional Institution at Fort Dix, New Jersey.

In 1978 Schiff was convicted of willful failure to timely file Federal income tax returns. Because the admission of a videotape of his appearance on a television talk show in that case was ruled unduly prejudicial, that conviction was overturned, and the case remanded for a new trial. He was convicted a second time for failure to file, and that conviction was affirmed (see United States v. Schiff).

In 1985 he was convicted of tax evasion and willful failure to file a corporate tax return, and that conviction was also affirmed (see United States v. Schiff and United States v. Schiff). Despite having spent four years in prison, Schiff continued his tax protest related activities.

In June of 2004, a Federal court ruled that Schiff was liable for over $2 million in taxes, penalties and interest for the years 1979 through 1985. In that case, Schiff's attorney had filed a brief claiming a diminished capacity defense, contending that Schiff had been diagnosed with a chronic, severe delusional disorder relating to his beliefs about the federal income tax system. This was characterized by some opponents of Schiff's beliefs as a claim that those beliefs were the product of a delusion, or even insanity, and that Schiff had willingly allowed his defense counsel to raise such an argument.

Schiff himself has responded to these claims, stating that this was an attempt to prevent the Judge from giving a summary judgement and instead allow a jury trial. Schiff also asserted that this was different from an insanity defense. (.pdf) Schiff, in his statement on the matter, asserts that the judge erred in not putting this question to the jury, and insists that " (1) no one is required to pay income taxes; (2) the entire federal judiciary is involved in a monumental, criminal conspiracy to collect income taxes in violation of law."

On October 24, 2005, Schiff was convicted on multiple counts of filing false tax returns, aiding and assisting in the preparation of false tax returns filed by other taxpayers, conspiring to defraud the United States and income tax evasion, and he is again serving jail time (see below). Although Schiff responded with numerous complaints about the trial process, including a claim that Judge Kent Dawson did not allow Schiff to present evidence at his trial, his appeal was dismissed by the United States Court of Appeals for the Ninth Circuit on December 9, 2005.

One of Schiff's co-defendants, Lawrence Cohen, was sentenced on February 3, 2006 to 2 years and 9 months in prison and was ordered to pay $480,000 in restitution to the Internal Revenue Service. On February 23, 2006, Cynthia Neun (another co-defendant) was sentenced to 5 years and 8 months in prison and ordered to pay over $1.1 million in restitution to the Internal Revenue Service. According to the prosecutor's office, Neun sold materials encouraging people not to pay taxes, prepared false tax returns, and represented hundreds of taxpayers in dealings with the IRS where she promoted Schiff's arguments. She will be required to submit to three years of supervision following her release from prison, expected in September of 2010.

In this last case Schiff's attorneys again asked that the court consider the claim that Schiff has a mental disorder relating to his beliefs about taxes (see .pdf link above). Despite Schiff's age (approximately 78 years old), he was sentenced on February 24, 2006 to over 13 years in prison, consisting of 12 years and 7 months in prison on the 2005 tax convictions and an additional year for contempt of court. He was also ordered to pay more than $4.2 million in restitution, and to serve three years of supervised release. According to the prosecutor's office the evidence at trial showed that Schiff had attempted to evade the payment of over $2 million in taxes from 1979 through 1985, and that he had used offshore bank accounts using multiple tax identification numbers and had attempted to hide assets in connection with his tax protester related activity.

One of the more telling results of his conviction is the state of his former bookstore, "Freedom Books", which stood at 444 E. Sahara Avenue in Las Vegas, Nevada. The store had a large sign which boldly read "WHY PAY INCOME TAXES WHEN NO LAW SAYS YOU HAVE TO?" The building (as of May 2006) was vacant and for sale. The sign's bold message had been covered by brown paint.

Schiff is scheduled for release from prison in October of the year 2016.

Wikipedia.Org

More on the subject of taxation:

Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich - and Cheat Everybody Else