Anti-tax activist barred from holding seminars

Jace Radke

Thursday, March 20, 2003 | 8:42 a.m.

A federal judge has issued a temporary restraining order against a local anti-tax activist who authorities say is running a tax scam that has cost the country $56 million in revenue.

U.S. District Judge Lloyd George ruled Wednesday that Irwin Schiff was to be restrained from selling or publicizing material that specifically advises people to break the law. The order makes it illegal for Schiff and his associates to prepare tax returns or to hold a seminar scheduled for March 29 to 30 at the San Remo.

Schiff, 75, is the subject of an IRS investigation into allegations that he and his associates, Cynthia Neun and Lawrence N. Cohen, conduct seminars and sell books, audiotapes and other products designed to help customers evade federal taxes. The information primarily instructs customers to fill out income-tax returns falsely, listing no income and no tax due, Assistant U.S. Attorney Evan Davis said.

"Irwin Schiff is running one of the largest tax scams in the United States," Davis said during the restraining order hearing. "The IRS has identified 3,100 clients that have attempted to evade $56 million in taxes."

George scheduled a preliminary injunction hearing for April 7, and ordered that the two sides share information. Schiff's attorney, Noel Spaid of San Diego, told George that she needed access to papers seized from Schiff's office during an IRS raid in February.

No criminal charges have been filed in connection with the search warrant served at Schiff's East Sahara Avenue business, Freedom Books. Schiff has since filed a motion for the return of files and other seized items, and the IRS has begun to return items or provide copies of them.

Spaid argued against the restraining order Wednesday, citing Schiff's First Amendment right to freedom of speech as well as his right to express himself.

"All Irwin Schiff does is express his beliefs," Spaid said. "Maybe at the furthest extent of what he does he's teaching fraud against the government, but isn't the government big enough to stand up to that?"

George also ordered Schiff to stop selling a book titled "Federal Mafia: How It Illegally Imposes and Unlawfully Collects Income Taxes," for the duration of the restraining order. The book provides step-by-step instructions for filling out a "zero income tax return," said Davis, who is assigned to the U.S. attorney's tax division in Washington.