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Because commercial speech enjoys less protection, the First Amendment does not protect a “professional tax protester” from a court injunction that prohibited him from selling bogus tax advice on the Internet and forced him to post a copy of the court’s order on his Web site, the 3rd U.S. Circuit Court of Appeals has ruled. In its 29-page opinion in United States v. Bell, a unanimous three-judge panel upheld an injunction in a civil suit brought by the Justice Department and rejected defendant Thurston Paul Bell’s argument that it was overbroad because it prohibited him from advocating resistance to the tax laws — speech that he claimed is protected because it does not incite imminent lawless action. But the 3rd Circuit took a different approach from that taken by the lower court and other courts in similar cases which have held that such bogus tax advice can be prohibited under the U.S. Supreme Court’s 1969 decision in Brandenburg v. Ohio. “Under Brandenburg, only speech inciting imminent lawless action may be restricted,” Chief 3rd Circuit Judge Anthony J. Scirica wrote. “We believe Brandenburg is the wrong tool for tailoring the injunction in this case. � [T]he offending portions of Bell’s speech may be restricted adequately on other grounds, including false commercial speech and aiding-and-abetting violations of the tax laws, without raising constitutional questions or distorting Brandenburg,” Scirica wrote in an opinion joined by 3rd Circuit Judges Marjorie O. Rendell and D. Michael Fisher. In the lower court, U.S. District Judge Christopher C. Conner of the Middle District of Pennsylvania found that Bell’s Web site invited visitors to violate the tax code, and sold them materials instructing them how to do so. Court records show that Bell’s Web site, www.nite.org, had more than 400 clients, and that he earned about $60,000 between May 2000 and February 2002. Bell’s argument for avoiding the federal income tax is known as the “U.S. Sources argument” or the “Section 861 argument,” a theory that has been consistently rejected by the courts. According to the U.S. Sources argument, domestically earned wages of U.S. citizens are not taxable because such wages are not specifically mentioned in � 861′s list of items of gross income that “shall be treated as income from sources within the United States.” Following Bell’s instructions, his clients would file zero-income tax returns with an “asseveration of claimed income” attached, disputing the gross income indicated on their W-2 forms. Court records show that several of Bell’s clients succeeded in obtaining unwarranted tax refunds by filing returns according to his methods. Bell’s site invited visitors to pay a $195 annual fee for membership, which would give them access to tapes and documents to instruct them how to use the U.S. Sources rationale to file zero federal income tax returns. Justice Department lawyers said Bell also recruited apprentices, known as “Senior Fellows,” who, for a $3,500 fee, could receive training on how to market the U.S. Sources strategy to their own clients. In granting the government’s requested injunction, Conner found that “bogus tax advice enjoys no First Amendment protection and may be restrained because it is false commercial speech.” Conner found that Bell’s U.S. Sources theory was “nonsensical” and rested “purely on semantics.” Bell’s Web site, Conner said, was “the Internet version of a television infomercial made to entice visitors to join Bell’s organization and pay him for tax advice.” Conner ordered Bell to remove all of the “false, deceptive or misleading” information on his Internet site, and to stop “promoting, marketing or selling” any “abusive tax shelter, plan or arrangement that incites taxpayers to attempt to violate the internal revenue laws.” The injunction also required Bell to post the court’s injunction on his site and to send a letter to his clients to inform them of the injunction, the fraudulent nature of the U.S. Sources argument, their potential liability for filing frivolous tax returns, and the possibility that the government may seek to recover erroneous refunds and impose other penalties. On appeal, Bell challenged Conner’s finding that his site contained false commercial speech that is not protected by the First Amendment. He also argued that the requirements to post the injunctive order on his site and to turn over his list of clients to the government were unconstitutional because they amounted to “forced speech.” Now the 3rd Circuit has upheld every aspect of Conner’s injunction, finding that he “properly concluded the false commercial speech on Bell’s Web site was not protected by the First Amendment.” Scirica found that Conner was correct in finding that Bell’s speech was primarily commercial in nature because it “was imbued with the unmistakable rhetoric of advertising.” Bell’s lawyers, Anthony N. Thomas and Jeffrey J. Wood of Thomas & Associates in Harrisburg, Pa., argued that the site also contained “important information concerning history, economic systems, monetary systems, judicial systems, politics and opinions.” But Scirica said “this fact does not undermine the well-supported finding that the Web site’s primary function was to sell fraudulent and illegal tax advice and services.” The defense lawyers argued that since Bell’s site included additional information, it was not “pure” commercial speech. Instead, they said, Bell’s commercial speech was “inextricably intertwined” with protected political expression. Scirica disagreed, saying “packaging a commercial message with token political commentary does not insulate commercial speech from appropriate restrictions.”

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