Appeals court denies new hearing for anti-tax advocate

Jace Radke

Thursday, Jan. 13, 2005 | 11:09 a.m.

A federal appeals court has denied Las Vegas author and businessman Irwin Schiff's request for a new hearing of a ruling that bans the sale of one of his anti-tax books.

Schiff had petitioned for an en banc hearing by the 9th U.S. Circuit Court of Appeals after a three-judge panel in August upheld U.S. District Judge Lloyd George's ruling that Schiff's book, which suggests the income tax is voluntary and does not have to be paid in many cases, was commercial speech.

Schiff, who is charged in a federal indictment with 33 criminal counts including tax evasion and aiding in the filing of hundreds of false tax returns, argues that his book "The Federal Mafia" was protected by the constitutional guarantee of free speech. Commercial speech traditionally has been granted less free speech protection than political and expressive speech.

The denial of the en banc hearing upholds the appeals court's earlier support of George's preliminary injunction prohibiting sales of the book.

The appeals court said "The Federal Mafia" is acting as an advertisement for Schiff's full range of tax-avoidance products and services. It added, "An advertisement is fraudulent when it misleads customers about the benefit of the offered product."

Schiff's criminal trial is currently set for Feb. 28.

The Justice Department alleges that Schiff and his associates Cynthia Neun and Lawrence N. Cohen, through consulting, seminars, books, audiotapes and Web sites, help people file "zero-income" tax returns, even though these people have taxable income.

The government alleges that Schiff has been selling his materials online and at his store, providing step-by-step instructions for filling out income-tax returns falsely listing no income and no tax due.