Tax Protestor Could Spend Rest of Life in Prison

Published January 1, 2006

The most notorious tax protestor of the past 25 years awaits word on his future, which is in the hands of a federal judge in Las Vegas, Nevada.

For more than two decades Irwin A. Schiff wrote books, conducted seminars, and appeared on talk radio across the country, telling people that filing federal income tax returns was voluntary and that no law requires people to pay taxes. Schiff is well read on the subject and appears to know the tax code inside and out. He challenged tax authorities to debate him on the topic and offered a $50,000 reward to anyone who could prove him wrong.

It seems the United States government is going to collect the reward–if not in cash, then in time.

43-Year Sentence Possible

Schiff and two associates were charged in federal court in Las Vegas with conspiracy to defraud the Internal Revenue Service (IRS), tax evasion, and aiding others in filing false tax returns. On October 24 they were convicted. Schiff is now in jail awaiting sentencing, which is set for January 20. He faces 43 years in prison and $3.25 million in possible fines.

The conviction is Schiff’s third. He was convicted of failure to file tax returns in the mid-1980s and was later convicted of tax evasion. Because of the severity of the charges and Schiff’s age–he is 77 years old–he may spend the rest of his life in prison.

Schiff was adamant to the end in defense of his position. In his closing argument to the jury, which he presented himself, he continued to insist that filing tax returns and paying taxes were voluntary. He called the tax system “the greatest program of organized extortion ever conceived by man.” Schiff told the jury it was up them to send a message to the government.

“You can do a big favor to the rest of the workers in this country who are holding down two and three jobs,” Schiff told the jury. “We’re not slaves of the United States government. Our wages don’t belong to the United States government.”

Made Millions

Schiff had been quite adept at presenting his ideas to the untrained public, and many people fell for his seemingly well thought-out arguments. According to evidence introduced by the government at trial, between 1997 and 2002 Schiff sold about $4.2 million worth of books, tapes, and other materials espousing his theories and instructing people on how to “untax” themselves.

In March 2003 the Justice Department filed a civil lawsuit against Schiff, seeking an injunction preventing him from selling his tax schemes and assisting others in carrying them out. The same federal court in Las Vegas granted the injunction, which was later upheld by the Ninth Circuit Court of Appeals.

In October 2005, the U.S. Supreme Court refused to hear Schiff’s challenge to the Ninth Circuit’s decision.

Dan Pilla ([email protected]) is a nationally known tax litigation consultant and author of 11 books on IRS abuse prevention and cure, and problems resolution issues. His latest book is The IRS Problem Solver (HarperCollins). His Web site is