Thursday, March 20, 2003
Copyright © Las Vegas Review-Journal

FIRST AMENDMENT FIGHT: Restraining order issued on activist

Federal judge orders Schiff to stop circulating information that paying taxes is voluntary

Irwin Schiff Anti-tax activist says judge's order violates his right to free speech

A federal judge issued a temporary restraining order Wednesday against Las Vegas anti-tax activist Irwin Schiff and two of his associates, saying the group is to stop disseminating information that paying taxes in the United States is voluntary.

Schiff criticized the order by U.S. District Senior Judge Lloyd George, saying it violates his First Amendment right to free speech.

"If they can ban me from speaking, and if you can only talk about things that the government wants you to say, what good is freedom of speech?" Schiff said.

But in his remarks to the judge during a Wednesday morning hearing, Department of Justice trial attorney Evan Davis said Schiff "is running one of the largest tax scams in U.S. history."

"We are trying to shut the scam down," Davis said, adding that the First Amendment does not protect speech that facilitates illegal conduct.

Last week, the government filed a civil complaint in Las Vegas against Schiff, Cynthia Neun and Larry Cohen. The complaint alleged that Schiff has falsely asserted that payment of federal income taxes is voluntary and that any governmental attempts to collect such taxes are illegal.

Specifically, Davis said Schiff has been giving advice on how to file false tax returns listing zero income and zero liability. Davis said Schiff has some "3,100 clients attempting to evade $56 million" in taxes, even though such filings can lead to jail time or civil fines.

"It is designed to clog the federal court system and inundate the Internal Revenue Service," Davis said.

Of the seemingly large number of people following Schiff's advice, Davis said: "You tell a big lie often enough, people begin to believe you. The arguments he is making are not only wrong, they can land you in jail."

But Schiff said he is simply selling books that offer information about the tax code, and he has every right to do so.

Schiff's attorney, Noel Spaid, told George that, if the government believes people are filing false tax returns, it already has the power and ability to pursue such discretions without seeking restraining orders.

"Isn't our government big enough to stand against that?" she said. "Isn't our government big enough to pull out zero tax returns and go after that?"

The request for a temporary restraining order asked that Schiff, Neun and Cohen be prevented from representing customers before the IRS and that they be prevented from holding tax-related seminars for compensation.

George granted the order and also prevented Schiff from distributing his book, "The Federal Mafia."

Schiff said his book is "the first book that's been banned since 'Lady Chatterley's Lover,' " a 1928 DH Lawrence novel that shocked the nation with its sexual content. He also claimed that the judge hadn't read the book before he issued his order.

George offered some sharp criticism of Schiff's actions before issuing the temporary order.

"I have some sympathy for the people drawn into this, but really, it's nonsense," he said.

A hearing was scheduled for April 7 to determine whether a preliminary injunction should be imposed against Schiff and his colleagues.