Irwin Schiff had it right. But here's the results of one citizen trying to fight a fascist system:
FOR IMMEDIATE RELEASE
FRIDAY, FEBRUARY 24, 2006
United States Department of JusticeTAX
(202) 514-2007
TDD (202) 514-1888
Professional Tax Resister Sentenced to More
Than 12 Years in Prison for Tax Fraud
WASHINGTON, D.C. - Longtime tax protestor Irwin Schiff was sentenced in federal district court in Las Vegas to total of 163 months in prison—151 months for tax fraud and an additional 12 months for contempt of court—the Department of Justice and the Internal Revenue Service (IRS) announced today. In addition, Schiff was ordered to pay more than $4.2 million in restitution and to serve three years of supervised release..
In October 2005, Schiff was convicted of conspiring to defraud the United States, aiding and assisting in the preparation of false income tax returns, filing his own false tax returns, and evading the payment of millions of dollars in back taxes owed. This marks the third time Schiff has been convicted for committing federal tax offenses. Schiff previously has spent more than four years in jail for his tax crimes. Two associates of Schiff, Cynthia Neun and Lawrence Cohen, were also convicted of aiding and assisting other taxpayers in the filing of false tax returns. On February 3, 2006, Cohen was sentenced to 33 months in prison. Neun was sentenced yesterday to 68 months in prison and ordered to pay $1.1 million in restitution.
“Last October, a jury of his peers found Mr. Schiff guilty of serious tax crimes related not only to his own tax evasion, but also to his encouraging and enabling others to file false returns. The prison sentence handed down today reflects the seriousness of those crimes,” said Eileen J. O’Connor, Assistant Attorney General for the Justice Department’s Tax Division. “The Department of Justice is working vigorously to vindicate the interests of law- abiding Americans who file returns and pay the taxes the law requires.”
“Mr. Schiff earned this sentence,” said IRS Commissioner Mark Everson. “For years he has preyed on others by holding out false hope that they need not pay their taxes.”.
According to the indictment and the evidence introduced at trial, beginning in 1995, Schiff aided thousands of taxpayers in the filing of false federal income tax returns with the IRS that reported zero taxable income in spite of the taxpayers earning reportable income. Schiff owned and operated Freedom Books, a business that sold books, tapes, and informational packages encouraging customers not to pay income tax. According to a government witness who testified at trial, between 1997 and 2002, Freedom Books sold more than $4.2 million of these products..
The evidence presented at trial also proved that Schiff evaded the payment of more than $2 million in taxes he owed the IRS from 1979 through 1985. Schiff concealed income he earned from Freedom Books, in part, by using offshore bank accounts and conducting financial transactions through secret “warehouse” banking services. The evidence also showed that Schiff used debit cards issued by offshore banks to obtain funds he transferred offshore, that he opened bank accounts using multiple tax identification numbers and that he concealed his wealth by hiding his assets through the use of nominees..
Assistant Attorney General O’Connor thanked Tax Division Trial Attorneys Jeffrey A. Neiman, David J. Ignall, and Melissa Schraibman, who prosecuted the case. She also thanked Criminal Investigation Special Agents David Holland, Adam Steiner, and Autumn Woodard of the IRS, and the U.S. Attorney’s Office for the District of Nevada, whose assistance was essential to the successful investigation and prosecution of the case..
Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at Tax Division Home Page.
###
06-098
FOR IMMEDIATE RELEASE
MONDAY, OCTOBER 24, 2005
United States Department of JusticeTAX
(202) 514-2007
TDD (202) 514-1888
PROFESSIONAL TAX RESISTER IRWIN SCHIFF AND TWO ASSOCIATES CONVICTED IN LAS VEGAS TAX SCAM
WASHINGTON, D.C. - A federal jury in Las Vegas, Nevada convicted Irwin Schiff and two associates, Cynthia Neun and Lawrence Cohen, of aiding and assisting in the preparation of false income tax returns filed by other taxpayers in connection with a tax scam, and convicted Schiff and Neun of conspiring to defraud the United States, the Department of Justice and the Internal Revenue Service (IRS) announced today. Schiff was convicted on all counts, including income tax evasion and of filing false income tax returns for the years 1997 through 2002, and Neun was convicted of willfully failing to file federal income tax returns, Social Security disability fraud, and theft of government property in connection with Neun's improper receipt of Social Security disability benefits.
According to the indictment and the evidence introduced at trial, beginning in 1995, the defendants directed thousands of taxpayers to file false federal income tax returns with the IRS that reported zero taxable income in spite of the taxpayers earning large amounts of reportable income. The defendants operated the scam through Freedom Books-a business owned by Schiff-that sold books, tapes, and packets encouraging customers not to pay income tax. According to a government witness who testified at trial, between 1997 and 2002 Freedom Books sold more than $4.2 million in products that promoted Schiff's "anti-tax" scheme.
"People who evade their tax obligations, or encourage or enable others to do so, are cheating all law-abiding taxpayers," said Eileen J. O'Connor, Assistant Attorney General for the Justice Department's Tax Division. "The Department of Justice will prosecute these crimes, and juries will convict the offenders."
The Justice Department filed a civil suit in the same court against Schiff, Neun, and Cohen in March 2003, and the court granted a temporary restraining order barring them from advertising or selling Schiff's "zero-income tax return" plan; preparing tax returns for others; and assisting others to violate the tax law, including by "selling services, books or other materials that provide direction about how to fill out fraudulent or false tax forms. . . ." The preliminary injunction was affirmed after the defendants' appeal to the U.S. Court of Appeals for the Ninth Circuit. The U.S. Supreme Court this month declined to hear Schiff's challenge to the Ninth Circuit decision. The Justice Department will ask the district court to convert the preliminary injunction into a permanent one. More information about the injunction may be found on the Tax Division website at http://www.usdoj.gov/tax/txdv03357.htmhttp://www.usdoj.gov/ta/txdv03357.htm and http://www.usdoj.gov/tax/txdv03167.htm.
The evidence presented at trial also proved that Schiff evaded the payment of more than $2 million in taxes he owed the IRS from 1979 through 1985. Schiff concealed income he earned from Freedom Books, in part by using offshore bank accounts and conducting financial transactions through secret "warehouse" banking services. The evidence also showed that Schiff used debit cards issued by offshore banks to obtain funds he transferred offshore, that he opened bank accounts using multiple tax identification numbers, and that he titled his ownership of a car in the name of a Pennsylvania corporation.
This marks the third time Schiff has been convicted of tax offenses. "Paying taxes is the price of citizenship. After three strikes, I would hope that even Mr. Schiff realizes that he has struck out," said IRS Commissioner Mark W. Everson.
Mr. Schiff-who faces a maximum sentence of 43 years in prison and $3.25 million in fines-was remanded to the custody of the U.S. Marshals Service and is scheduled to be sentenced on January 20, 2006 at 10:30 A.M. Ms. Neun-who faces up to 50 years in prison and up to $3.3 million in fines-was remanded pending a bail hearing tomorrow. Neun's sentencing is scheduled for January 27, 2006 at 9:00 A.M. Mr. Cohen-who was released on bond-is due to be sentenced on January 27, 2006 at 9:30 A.M. He faces three years incarceration and up to a $250,000 fine.
Assistant Attorney General O'Connor thanked Tax Division Trial Attorneys Jeffrey A. Neiman and David J. Ignall, who prosecuted the case, as well as the Special Agents of the IRS, other Tax Division Attorneys, and the U.S. Attorney's Office for the District of Nevada for their assistance during the investigation and trial of this matter.
###
05-548
Schiff clients who have been criminally prosecuted aren't hard to find...
- United States v. Middleton, 246 F.3d 825 (6th Cir. 2001)
United States v. Dentice, No. 99-50101 (9th Cir. Oct. 6, 1999)
United States v. Payne, 978 F.2d 1177 (10th Cir. 1992)
United States v. Burdett, 962 F.2d 228 (2d Cri. 1992)
United States v. Mosel, 738 F.2d 157 (6th Cir. 1984)
United States v. Crosson, No. 95-176 (E.D. Pa. Dec. 21, 1995)
United States v. Anderson, 637 F. Supp. 1106 (D. Conn. 1986)
A new one for you: United States v. David G. Pflum, 2005 TNT 196-13, No. 04-3508 (10th Cir. 10/7/2005), aff'ng No. 04-CR-40008-SAC (U.S.D.C. Kan.). The opinion is about instructions on "willfulness" and objections to certain testimony on tax rates, not too interesting. The opinion begins:
10th Cir. wrote:
Benjamin Franklin famously quipped that "in this world nothing can be said to be certain, except death and taxes." Letter from Benjamin Franklin to Jean-Baptiste Le Roy (Nov. 13, 1789), in 10 The Writings of Benjamin Franklin 69 (A. Smyth ed. 1907). While not contesting the inevitability of the former (as far as we know), David G. Pflum believed he had found a loophole to escape the latter. After an extensive study that included reading books such as "The Great Income Tax Hoax" and "How Anyone Can Stop Paying Income Taxes," he stopped paying taxes.1
[Footnote]1 We note that the author of these books, Irwin Schiff, has maintained for more than 30 years that income taxes are voluntary, but, not surprisingly, "he has never been successful with that theory in court." United States v. Schiff, 379 F.3d 621, 623 (9th Cir. 2004) (citing cases in which Schiff's arguments have been rejected); Newman v. Schiff, 778 F.2d 460, 467 (8th Cir. 1985) (referring to the "blatant nonsense" promoted by Schiff).
The 10th Circuit affirmed Pflum's conviction on eight counts of failure to pay quarterly employment taxes, in violation of 26 U.S.C. § 7202, and three counts of failure to file a federal income tax return, in violation of 26 U.S.C. § 7203, as well as his sentence of 30 months in prison.
FOR IMMEDIATE RELEASE
THURSDAY, JUNE 17, 2004
United States Department of JusticeTAX
(202) 514-2007
TDD (202) 514-1888
Court Rules Irwin Schiff Owes
U.S. Treasury Over Two Million Dollars
WASHINGTON, D.C. - The Department of Justice announced today that on June 14, 2004, a federal court in Las Vegas ruled that Irwin A. Schiff, a well-known promoter of frivolous tax evasion excuses, is liable for over $2 million in individual income tax liabilities and related interest and penalties, in civil litigation brought by the government to recover Schiff’s unpaid income taxes for the years 1979 through 1985.
Schiff maintained that he should be excused from the imposition of civil fraud penalties because he allegedly has recently been diagnosed as suffering from a “chronic and severe delusional disorder” that resulted in his irrational and incorrect beliefs pertaining to the federal income tax system. The court declined to accept Schiff’s diminished-capacity defense.
The June 14 Order is not related to the grand jury’s March 24, 2004, indictment of Schiff and others on charges of criminal conspiracy and multiple violations of the internal revenue laws.
This matter was handled by the Justice Department’s Tax Division. The Tax Division represents the IRS in civil litigation to collect taxes in high-profile, complex or precedent-setting cases. Eileen J. O’Connor, Assistant Attorney General for the Tax Division, thanked trial attorneys Henry C. Darmstadter and Guy P. Jennings for their work in this matter.
For more information on this case and on the Department of Justice’s other tax-scam enforcement actions, go online to http://www.usdoj.gov/tax/03_tax_167.htm.
###
04-417