Anti-tax activist gets court help

Mary Manning and Jace Radke

Thursday, Sept. 4, 2003 | 10:53 a.m.

Anti-tax activist Irwin Schiff and his lawyers will get another chance to argue in court that the First Amendment prohibits the government from banning his book or forcing him to turn over a list of his customers.

In a decision that is being hailed by proponents of free speech, the 9th U.S. Circuit Court of Appeals on Wednesday granted an emergency motion to stay a lower court ruling against Schiff. The ruling had banned Schiff's book and had called for Schiff to turn over a list of people that had purchased the anti-tax information and forms from his company.

U.S. District Judge Lloyd George imposed a temporary order on March 19 preventing Schiff from distributing his book, "The Federal Mafia: How the Government Illegally Imposes and Unlawfully Collects Income Taxes."

George issued a preliminary injunction in June that ordered Schiff and his associates to stop selling instructions for filling out income tax returns falsely, listing no income and no tax due. George had also ordered Schiff to turn over his customer list.

Schiff no longer has to do any of that -- for the time being at least, American Civil Liberties Union attorney Allen Lichtenstein said.

"The way I read the (9th Circuit's ruling) is that the injunction is stayed, and not in effect until the 9th Circuit looks at it, so there is nothing preventing Schiff from selling his book," Lichtenstein said.

Government attorneys argued that Schiff had advocated the "false and frivolous position that paying federal income taxes is voluntary," and that he was providing information for a fee to his clients that provided step-by-step instructions on how to break the law.

The government had asked George to hold Schiff in contempt of the injunction, alleging that he continued to sell "zero tax" forms and refused to turn over a customer list. The appellate court's decision will also stay the contempt issue, and caused George to cancel a contempt hearing scheduled for this afternoon.

"The government tried to pretend it was an abuse of a tax shelter and I think the 9th Circuit saw through that," Schiff said Wednesday. "Even if people have beliefs that are wrong, they're still beliefs and they have a right to express them."

Justice Department attorneys had no comment on the 9th Circuit's order.

George's order could have "crippled and chilled" speech, but the appeals court has agreed to review the case, Schiff's attorney, Michael Stein, said. In addition, the attorney argued that the government had no right to ask for the list of people who bought the book.

"The book says to readers that they should review its advice with a lawyer," Stein said of the book that was published 13 years ago.

Opening briefs for the 9th Circuit are due on Sept. 14, Stein said. The government has until Oct. 15 to file its briefs and then final briefs are due Oct. 25. After that, the court will set a hearing schedule, Stein said.

Several national organizations had joined the American Civil Liberties Union in asking George to lift the ban on Schiff's book.

Lichtenstein said the American Booksellers Foundation for Free Expression, the Freedom to Read Foundation of the American Library Association, the PEN American Center and the Association of American Publishers, all leading First Amendment organizations, are behind the appeal.

"We plan on doing the same thing on the appeal because this issue goes beyond Mr. Schiff and his customers. It applies to everybody," Lichtenstein said.