Irwin Schiff Income-tax opponent stands accused of conspiring to defraud the federal government
The fate of income-tax opponent Irwin Schiff and two of his followers now rests in the hands of a federal jury, whose members must determine if the defendants' actions spring from sincere belief or sophistry.
Closing arguments in the case were made Monday, with jury deliberations beginning late in the afternoon. Federal prosecutors are seeking multiple criminal convictions that spring from Schiff's marketing, selling and practice of the idea that the law does not require Americans to pay income tax. Schiff, 77, the owner of Freedom Books in Las Vegas, and two employees, Cynthia Neun and Lawrence Cohen, stand accused of conspiring to defraud the federal government.
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"The idea that taxes are optional is too good to be true because it's not true," said David Ignall, prosecuting attorney for the tax division of the U.S. Department of Justice.
Ignall's assertion was attacked by Schiff, who chose to represent himself during the trial, which began Sept. 13.
"I believe my beliefs are correct," Schiff said to jurors. "If you believe that I'm a liar and a swindler and a thief, contrary to the character evidence (presented), find me guilty."
Schiff, author of "The Federal Mafia: How the Government Illegally Imposes and Unlawfully Collects Income Taxes," conducts seminars and sells videotapes which show people how to file what he calls a "zero return." Schiff advocates listing zero income on tax return forms, regardless of an individual's annual earnings, prosecutors said. A court order has prevented Schiff from selling copies of "The Federal Mafia," since 2003. Schiff's message was apparently embraced by thousands of people who filed tax returns with what prosecutors called "the Schiff attachment."
Schiff, Neun and Cohen all had a common goal, prosecutors said, which was to impair and impede the Internal Revenue Service.
"He flat out has a disagreement with the law," Ingall said, dismissing Schiff's position as one of true belief.
Schiff took issue with the government's claim that a conspiracy took place or was planned. There was no secrecy or covert action, Schiff said. His views were publicized through his products and on his radio show, which he used as a platform to issue a challenge for anyone to produce a citation in the law that requires people to pay an income tax. Even when he offered $5,000 as a reward to anyone who could do so, Schiff said there were no takers.
Ignall said that proved nothing.
"You can't be secretive and furtive and sell product," the prosecutor said.
Defense attorneys for Neun and Cohen both asked the jury to consider carefully whether the government had met its burden of proof. Neun faces charges of fraud for collecting social security disability benefits while working for Freedom Books. Her attorney, Michael Cristalli, said the only direct evidence prosecutors presented on that point was from a former Freedom Books employee who left the company prior to the dates cited in the indictment. Neun, identified as Schiff's girlfriend, may have accepted gifts, but Cristalli said there was no evidence she was a salaried employee.
"You must stay true to the evidence," Cristalli said to jurors. "If you do, you must acquit."
All three defendants have eschewed filing income tax returns in the past. In 2002, Schiff said during a Review-Journal interview that he had paid no income tax since 1973. Schiff was indicted in 2004. He is accused of evading the payment of $1.3 million in taxes, penalties and interest between 1979 and 1985.
Schiff's closing statements were peppered with objections from the prosecution for misrepresenting the law and attempting to testify on materials not introduced in evidence. U.S. District Court Judge Kent Dawson sustained a majority of the objections and sanctioned Schiff twice for failing to heed directions from the bench.
"I'm not a lawyer," Schiff said to Dawson after being warned by the judge not to argue with him.
"Mr. Schiff, you can follow instructions, I hope, regardless of that," Dawson said.
