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A Las Vegas federal judge has called the anti-tax writings of a civil defendant “nonsense” and enjoined him from distributing a book that’s based on them. The case has sparked a legal battle that pits federal tax law against First Amendment rights. A suit brought by the Tax Division of the Justice Department has won a temporary restraining order that enjoins Irwin Schiff and two co-workers from 13 specific activities, such as holding seminars that promote any false or fictitious tax schemes. U.S. v. Schiff, No. CV-S-03-0281-LDG-RJJ (D. Nev.). While the government’s complaint is thick with details and weighted by exhibits, the allegations boil down to this: Schiff and his associates are tax cheats. The government also alleges that they sell books, tapes and CDs on three Web sites that urge others fraudulently to declare zero tax. They instruct people not to withhold taxes from their pay, no matter what their income or deductions have been or are projected to be. To government lawyers, this is a tax case and nothing more. But aspects of the case fly in the face of the First Amendment, according to Schiff’s lawyer, the American Civil Liberties Union of Nevada and some legal scholars. The ACLU’s involvement concerns three components of the injunction that it says violate First Amendment protections. The components are: • An order that the defendants not make statements regarding the excludability of income that they know or have reason to know is false or fraudulent as to any material matter. • A prohibition on the sale or distribution of the book, titled “The Federal Mafia: How The Government Illegally Imposes and Unlawfully Collects Income Taxes.” • A requirement that defendants post the restraining order in its entirety on their Web sites. The first two, the ACLU alleges in an amicus brief, enjoin fully protected noncommercial speech. The third is impermissible forced speech. “Their speech is political,” said Robert Nersesian of Nersesian & Sankiewicz in Las Vegas, who is assisting the ACLU. “The whole book is a political message with just a couple of passages that are not. We’re not arguing legality or illegality. There is restraint — prosecuting him if they think he committed a crime, which is lawful — and there is prior restraint, which is not.” A U.S. Department of Justice attorney declined to comment. Historically, the U.S. Supreme Court has narrowly crafted limitations to the First Amendment rights of freedom of expression when it is content-based, and only in a few areas, such as obscenity, defamation and fighting words. To date, though, the Court has placed no restriction on speech it deemed foolish or absurd. Judge Lloyd George banned the book on March 19, and extended the ban after a hearing on April 11. Written by Schiff and self-published by Freedom Books, it describes in detail how to file a zero-tax return. It also includes a legal-theory form to attach to the zero-tax return. This, of course, shouts “tax resister” to the IRS. The book warns readers that getting sued or arrested for filing such a return is possible and describes how to resist IRS attempts at collection if an audit finds the filer’s legal theories wanting. Schiff admits in his legal papers that he has been convicted twice for tax crimes, has been sanctioned by the Tax Court and has never found a judicial authority to side with him on any of his anti-tax theories. Those consequences were for earlier theories, he swore at the hearing that extended the injunction. He said he had never been prosecuted for his zero-tax theory. At this second hearing, Schiff was still represented by Del Mar, Calif., solo practitioner Noel Spaid, who argued the merits of Schiff’s defense until it got down to the specifics of his tax theories. Spaid said she could not speak to those because “his theories have … been sanctioned by the courts … [and] I do not want to incur the many thousands of dollars that the court could put on my head for even arguing his theories, because that’s what the courts are doing.” The judge agreed that she faced a Hobson’s choice — that espousing her client’s views would likely get her sanctioned. He agreed to “allow Irwin Schiff to represent himself with respect to his theories.” Justice Department attorney Evan Davis interjected: “Well, I object to having both an attorney represent someone and having them represent themselves.” Schiff: “I’m firing her at this time,” which the court allowed. Schiff spent about an hour espousing his theories to the court. The judge’s refrain: nonsense. Schiff called witnesses who testified that they had purchased books from him but didn’t take his word for everything. They’d been inspired to research the law themselves and had been filing zero-income tax returns for years, had not had tax withheld and had been unlawfully hounded by the IRS, according to a transcript of the proceedings. The government’s problem is that despite the fact that Schiff’s theories are allegedly “nonsense,” people buy them along with his books. The government estimates, as best it can, that Schiff’s identifiable customers have evaded or attempted to evade $56 million in taxes for 1999 through 2001. It alleges that these bogus returns have wasted seven employees’ time, in the Las Vegas IRS office alone, over the past two years. To call the case adversarial would be an understatement. Before the first hearing, Freedom Books’ office was raided by special agents, with “tax police” stenciled across the backs of their jackets, according to Schiff. He said that they took all of his records and copied three hard drives with the names and addresses of people who have bought items from Freedom Books, which also sells copies of the Constitution and the IRS Code. Schiff said that he’d been read his rights and was not allowed to enter the office as it was being searched. ‘REALLY IS NONSENSE’ After the first hearing, the defendants challenged the judge for cause because he had said, “I have some sympathy for the people who are drawn into what really is nonsense, counsel, and then they suffer the consequences.” Defendants were miffed that the judge made this statement before he had heard any witnesses. The government cited a 9th U.S. Circuit Court of Appeals case in defense of his using the word “nonsense.” It said judges “cannot be expected to remain blind to the events around them.” The judge in that case, however, had heard summary judgment arguments. After surviving the challenge, George faced a maze of complex prior restraint First Amendment issues that were argued in briefs. Case law and constitutional principles got shuffled in the parties’ papers, which reached diametrically opposed conclusions under the same house rules — the Supreme Court and the 9th Circuit. Was the subject matter of the litigation commercial speech, which is afforded less constitutional protection and can be banned simply because it is false? Or was it noncommercial and protected? Or were the messages inextricably intertwined, in which case regulation would face the same strict scrutiny as noncommercial speech? The government’s brief points to two pages of the book that are clearly commercial. But its main argument is that “a significant portion of The Federal Mafia is intended to be used … and had been used by thousands of people as a road map to commit tax evasion.” Therefore, the government argues, rather than being a content-based restriction on free speech, it merely restricts the willful aiding in and counseling of violation of the tax code. To this, the ACLU argues that there is no imminence of unlawful action, a prerequisite that must be met before courts will allow prior restraint. Brandenburg v. Ohio, 395 U.S. 444 (1969). The government’s reply: A crime is a crime. Erwin Chemerinsky, a professor of constitutional law at the University of Southern California, thinks the court overstepped its bounds. “People can encourage others to violate the law as long as it doesn’t rise to the level of incitement,” Chemerinsky said. “They can criminally prosecute it, but they can’t enjoin speech … because that’s a prior restraint, and unless it meets the test of incitement, they can’t stop the publishing of the book.” As to whether two pages of advertising turns the book into commercial speech, Chemerinsky said that “commercial speech is advertising designed to sell a product or service. … The fact that newspapers or magazines have ads do not make them commercial speech.” The judge asked for more briefs from all parties by today. The temporary restraining order remains in effect until it is either dissolved or becomes a permanent injunction sometime thereafter. Spaid said of Schiff: “He believes what he believes and stands behind it, and that’s what America’s about. Our real power is not our military; it’s in the strength of our free speech and press. Friendly speech needs no protection, it’s only dissident speech that needs protection, and that’s what the First Amendment is all about. … “This country was born on people refusing to pay a tax.” Davis, the tax division trial attorney, was unavailable for comment. He was having knee surgery.

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