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Judge Bans Schiff Book on Income Tax, 1st Amendment Thrashed to Buy the Tax More Time; New York Times: More Deception, We The People.com, June 30, 2003
By NYT and We the People
Aug 4, 2003, 14:55

On Monday, June 16, Federal District Court Judge Lloyd D. George issued a preliminary injunction banning the sale and distribution of Irwin Schiff's book about the income tax titled, "The Federal Mafia: How The Government Illegally Imposes And Unlawfully Collects Income Taxes And How Americans Can Fight Back."

Schiff's book, which is a personal and legal examination of the income tax fraud, and includes extensive, and specific quotations and analyses of US tax law and Supreme Court rulings on the tax, was banned even though the Department of Justice (which bears the burden of proof) presented no evidence and no witnesses at the April 11th preliminary injunction hearing. Click Here to read the first chapter of the censored book.

In short, Judge George banned Schiff's book as "false commercial speech" without any specific analysis or any in-court evidentiary examination establishing the "falsity" of Schiff's actual speech and by blithely ignoring the substantial body of established Supreme Court constitutional law protecting free expression and publication.

With only an unsubstantiated claim of criminal speech asserted by a government witness (via a written declaration), Judge George summarily dismissed the content of Schiff's book as "largely autobiographical, containing in large part Schiff's anti-tax and anti-government diatribes and theories." Of course, it appears to be lost on the court that this is the exact type of speech protected by the First Amendment and -- even when intertwined with "commercial" speech -- requires the highest level of examination and legal justification to censor.

Allen Lichtenstein, general counsel of the American Civil Liberties Union in Nevada, said he looked forward to arguing the case before the Ninth Circuit Court of Appeals. Schiff said he had done nothing wrong and would appeal. "We argued that the book is not commercial speech, cannot be banned as false commercial speech and does not meet any other criteria for censorship," Lichtenstein said.

On Tuesday June 17, The New York Times ran an article authored by David Cay Johnston about the Schiff injunction. According to Schiff, Johnston makes two knowingly false statements distorting the perceived nature of the proceedings. Schiff has demanded a formal retraction from the New York Times.

Johnston wrote," At the court hearing, Mr. Schiff fired his lawyer after she said that she could not argue his tax claims because they lacked merit." In his demand letter to the Times, Schiff points out that the transcript from the hearing makes it explicitly clear that Schiff's attorney was not characterizing Schiff's legal assertions as false or lacking in any way, but instead that she was effectively prohibited by the court from even raising the issues in defense of Schiff under fear and threat of court sanction.

Analysis of the Order

To reach his contorted legal conclusions and to issue the preliminary injunction in favor of the IRS, Judge George ruled, without any evidentiary examination or cross-examination, to conclude that Schiff's speech is false.

With this in mind, please note on page 4 of the Order there are five distinct, separate legal elements listed for the government to successfully assert a claim for an injunction related to an "abusive tax shelter."

In his order however, the judge conveniently "combines" his analysis of the critical second and third statutory elements, (i.e., relating to making actual "false and fraudulent statements" and the defendant's "reason to know" about their falsity) together within section "B" of the Order, thereby clouding the court's grossly inadequate treatment in establishing the truth or falsity of Schiff's actual speech.

While Section "B" contains much ado concerning Irwin's past criminal tax convictions, his failed federal appeals and Schiff's extensive knowledge and expertise in tax law, precious few words are wasted establishing the actual falsity of Schiff's speech,. In fact, most of the relevant language concerning the court's finding of falsity merely lists District Court decisions of other victims of the IRS's nationwide attack on speech. The Court is in effect stating, "All these other people had false speech concerning abusive tax shelters so Schiff's speech is too."

In short, to enable the government's full and unfettered dismissal of the very significant First Amendment issues raised subsequently by the ACLU, Judge George quickly reaches the judicial conclusion of the "falsity" of Schiff's speech (relative to abusive tax shelters) by grossly mischaracterizing Schiff's legal assertions within the context of several Supreme Court cases cited that are only tangentially related to the core legal issues raised in Schiff's actual speech.

Example: The Court cites the 1916 Brushaber case which addressed the "right of Congress to impose income tax" [sic]. In fact, Brushaber was acting as a withholding agent for a foreign corporate entity operating inside the US and was in fact, under US law, liable in that capacity. This issue is not the issue raised by Schiff in the Federal Mafia.

According to Schiff's Federal Mafia material  if Brushaber was a natural citizen of living and working in the 50 sates, his personal wages would in fact be non-taxable because they don't meet the constitutional definition of "income" as defined by the Supreme Court (i.e., a corporate profit or gain). It is Supreme Court decisions such as these cited in Schiff's Mafia (and therefore, his alleged tax "scheme") that the Court has blindly ignored in its legal analysis.

The bottom line: Nowhere is there a direct rebuttal or examination of the specific legal assertions advanced by Schiff in either his speech or his book. Every subsequent aspect contained in the Court's injunction is rationalized, and squarely erected, upon this defective judicial premise.

In reality, Schiff's "abusive tax scam" is merely a detailed discussion and analysis of US tax laws and US Supreme Court decisions, coupled with detailed instructions on how average Americans can implement the logical conclusions and reasonable inferences of those legal facts to protect their property and their rights.

The IRS, DOJ and now the US District Court, have failed to provide ANY specific, substantive rebuttal to ANY of the the specific elements of Schiff's speech  even though these elements contain the nexus of the falsity or truth of his speech, and thereby are at the heart of determining the legality or criminality of the alleged "abusive tax scheme". To fail to directly address the content and alleged falsity of the speech is a clear violation of due process.

Armed with this defective and patently self-serving judicial conclusion, the Court then begins to rebut the 1st Amendment free speech issues raised in the ACLU's amicus briefs.

(Note: The 1st Amendment discussion begins on page 13 of the order)

Commercial Speech

Judge George summarily concludes not only that The Federal Mafia is non-protected "false" commercial speech because the book is sold for money and it contains false information that might be of "selfish" economic benefit to the audience (or Schiff) -- but that it should be banned because it advertises other Schiff products that naturally lead to the same alleged tax "scam." I.e., as false commercial advertising, the book should be banned.

The judge, citing the 9th Circuit Estate Preservation case, makes the implicit point that Schiff, outside this injunction, is free to continue to give tax planning advice as long as it is "legitimate" as (quote) "every honest and qualified tax consultant knows."

Judge George, having concluded that the book constitutes "core commercial speech," (i.e. "advertising, plain and simple") dismisses the tightly interwoven political content and far reaching political implications of Schiff's work and instead focuses on establishing that Schiff's book is simply a contrived "soup" of false advertising and an embedded "abusive tax scheme," which, of course, enjoy no protection.

Incitement of Imminent Lawless Acts

At the beginning of the section dealing with the "Incitement of Imminent Lawless Acts" (page 26) Judge George cites the Brandenburg v. Ohio Supreme Court case where the court upheld that even speech advocating the violation of law was protected, as long as the speech did not "incite imminent unlawful acts".

The Brandenburg case is the modern day constitutional litmus test for the legal banning of speech. Below is the definition of the word "imminent".

Imminent \Im"mi*nent\, Imminent: it is the strongest -- it denotes that something is ready to fall or happen on the instant; as, in imminent danger of one's life.

1. Threatening to occur immediately; near at hand; impending; -- said especially of misfortune or peril. ``In danger imminent.'' (Source: Webster's Revised Unabridged Dictionary, © 1996, 1998 MICRA, Inc.)

Having already sidestepped the issue of whether filing a "zero return" constitutes an unlawful act, Judge George haphazardly, and improperly, dismisses the crucial Brandenburg "test" as inappropriate in Schiff's case because the speech in Schiff's book "incorporates the (tax) scheme" thereby implying that Schiff's speech is the actual crime and therefore that this test need not be applied.

The entire nature of the Supreme Court's Brandenburg litmus test revolves around the direct incitement of "imminent" lawless behavior  i.e., in the case of Brandenburg (and its supporting case citations) imminent VIOLENT behavior. (Brandenburg was a Klansman engaged in inflammatory, racist speech. His speech was upheld as constitutional because he merely advocated the breaking of the law.)

Judge George takes license in citing several sympathetic Court decisions, while choosing to ignore the direct guidance of the Supreme Court regarding this crucial legal test necessary to ban speech.

In short, the Court makes no attempt to establish how reading a book containing a legal analysis and instructions on how to file a tax return could result in anything resembling "imminent" activity of ANY type  whether lawful or not. The judge seems content  as the other District tax case judges seem to be  of tolerating a mere logical relationship between this "unlawful" speech and a subsequent "criminal act." With that linkage established, the "imminence" element to banning speech is cleanly dismissed out of hand.

By this court's logic, anyone who wrote a "how-to" book containing any information that was subsequently used in a crime  no matter how far removed from the alleged proximate cause -- and regardless of whether the speech was false or not  could be held liable for his/her speech or writings.

Illegal Acts

In the last section of the injunction order, the judge cements his previous conclusion of the false, (and thereby criminal), nature of Schiff's speech by citing a handful of free speech cases involving bomb makers, illegal drug manufacturers and "hit-men" that purport to, by example and association, show how speech that leads directly to and induces specific criminal conduct is not protected.

Of course unlike exploding a bomb or killing another human being -- which are reasonably understood to be plainly criminal acts  the filing of a tax return per instructions and legal advice of a court-acknowledged tax expert that specifically and plainly cites decisions of the Supreme Court and the Internal Revenue Code itself is much harder to comprehend as an overt criminal act.


The legal arguments and carefully selected lower level court cases cited by Judge George throughout the Order clearly appear strained in their effort to support a justifiable ban of Schiff's book and appear to set the stage for the Ninth Circuit to deny an appeal from Schiff. The clearly protected political content of the book is outright ignored. It is obvious that the government has found Schiff's speech (and many other tax "protestors") intolerable simply because the speech conveys details of the income tax fraud and that they have provided methods on how to effectively contravene its effects.

To be sure, the banning of speech through restraining orders and like vehicles are extraordinary remedies that can be implemented without a trial by jury, were designed to temporarily protect rights, property and the public tranquility at risk until other legal remedies could be effected. They were never intended for the purposes of suppressing, or otherwise circumventing, rightful, lawful public debates and discussions about the tax laws of this nation or the abuses of government power.

The extraordinary remedy of enjoining speech was never intended to replace the proper processes of due process and the enforcement of laws as executed via indictments, prosecution and the judicial appeal process. The delegated and strictly limited legal authority of our government to collect taxes DOES NOT, and CANNOT, ever trump the sovereign People's right to free speech.

That the judiciary would openly sanction the use of these extraordinary legal remedies and affirmatively deny Schiff his constitutionally protected right to speech while the government  for 13 years  has had the ability and resources to openly pursue Schiff with full, public criminal charges for his allegedly unlawful acts  AND HAS NOT -- should not be tolerated. That our media would ignore -- and even unquestioningly facilitate -- this carnage on our Constitution is deplorable.

In the pivotal case New York Times Co. v. Sullivan (1964), Justice Brandeis, is cited from his concurring opinion in Whitney v. California, 274 U.S. 357, 375-376 restating the rationale behind free speech:

"Those who won our independence believed . . . that public discussion is a political duty, and that this should be a fundamental principle of the American government. They recognized the risks to which all human institutions are subject. But they knew that order cannot be secured merely through fear of punishment for its infraction; that it is hazardous to discourage thought, hope and imagination; that fear breeds repression; that repression breeds hate; that hate menaces stable government; that the path of safety lies in the opportunity to discuss freely supposed grievances and proposed remedies, and that the fitting remedy for evil counsels is good ones. Believing in the power of reason as applied through public discussion, they eschewed silence coerced by law--the argument of force in its worst form. Recognizing the occasional tyrannies of governing majorities, they amended the Constitution so that free speech and assembly should be guaranteed." [emphasis added]

Will the People silently endure these abuses? We shall see.