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Anti-tax author must stop selling book promoting tax evasion

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Anti-tax author must stop selling book promoting tax evasion

  • The U.S. Court of Appeals in San Francisco (9th Cir.) upheld an order preventing anti-tax author Irwin Schiff from selling a book offering advice on avoiding paying income taxes.

Aug. 12, 2004 — Author Irwin Schiff can no longer sell his 1992 book, The Federal Mafia: How Government Illegally Imposes and Unlawfully Collects Income Taxes , because it offers fraudulent advice and services to help people avoid paying income taxes, a three-judge panel of the U.S. Court of Appeals in San Francisco (9th Cir.) ruled Monday.

Judge Procter Hug Jr. held that the book qualified as commercial speech, which is afforded fewer constitutional protections than expressive speech, because Schiff makes claims that are “designed to convince readers that they can lawfully avoid paying their income taxes so that the reader will buy other products in Schiff’s line.” The government may ban or regulate commercial speech if the speech is misleading or related to unlawful activity.

“The defendants have been selling products that help their customers engage in illegal activity,” and Mr. Schiff, through his book, “is making fraudulent claims,” Hug said.

The appellate court’s ruling upheld a June 2003 preliminary injunction issued by U.S. District Court Judge Lloyd D. George that prevented further sales of the book. Schiff, 76, was also ordered by George to turn over a list naming everyone who has purchased The Federal Mafia through Schiff’s Web sites or Las Vegas bookstore since 1999. The appeals court did not address the constitutionality of that order, and instead sent it back to the district court for additional consideration.

The appeals court did say that Schiff may be able to legally sell the book if he took out all content that promotes his tax-evasion schemes and services. Opinion, the court held, is protected speech.

Regarded as the nation’s most famous tax protestor, Schiff has been imprisoned twice for tax evasion. He was indicted in March for running an illegal tax scheme by encouraging more than 3,100 clients to evade $56 million in taxes. Schiff has repeatedly claimed that people can legally escape paying income taxes by putting “zero” in each box for reporting income on their tax returns.

“This is the first time a book like this has been banned in the U.S.,” said Schiff, who was reached at his bookstore, Freedom Books. “[F]reedom of speech that is critical about the government is the highest form of protected speech. The government is seeking to ban my book because I am exposing their criminality.”

The ACLU of Nevada, American Booksellers Foundation for Free Expression, the Association of American Publishers, the American Library Association, and the writers’ group PEN filed a friend-of-the-court brief in support of Schiff’s First Amendment argument.

“It is important to understand that the order made it clear that Schiff is free to expound on his theories of the IRS and income taxes in his books, but he is prohibited from connecting that exposition to advertisements for his commercial products,” said Gary Peck, executive director of the ACLU in Nevada.

Schiff said he is working on another book that will discuss repealing the income tax and how the judiciary is equally culpable with the government for enforcing the tax laws.

(United States v. Schiff; Counsel: Michael D. Stein, Las Vegas) TS

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