On October 16, 2015, Irwin Schiff died, in prison, from lung cancer. He was 87 years old, and serving a fourteen-year sentence – his third prison term, and the final chapter in his 40-year crusade against the Internal Revenue Service (IRS). Schiff was one of the original and most notable proponents of constitutional challenges to income taxation – as he saw it, and relentlessly argued it, there was no basis in the United States Constitution for the assessment or collection of income taxes from anyone. In a series of widely-sold books, Schiff argued that no one was required to file income tax, and anyone filing their taxes should claim zero income. Government prosecutors called this tax fraud and tax evasion, and sent him and many of his followers to prison. Schiff and those followers called their actions “tax honesty” and continued to fight.
Many citizens who both respect the law and who believed in Schiff, and still believe in him, have been targeted and mistreated by overzealous IRS Revenue Agents, Special Agents, and government prosecutors. This focused targeting is likely to continue, as Schiff’s legacy is carried on by both tax protesters, and ordinary people who called Schiff a patriot.
One particular Schiff follower stands out in my mind. We’ll call this elderly lady “Mary” to protect her from any further embarrassment or suffering.
Mary and I met in a hotel lobby. Nothing fancy.
Mary wore reading glasses and had on a well-pressed blue jacket and floral dress. You could see on her worn black shoes rough spots that she had covered up with shoe polish. Her purse was scuffed and creased, but clean.
In her hands, Mary held a cardboard box with the words “Schiff materials” written on it.
She smiled when she opened the box. Clearly, her association with it was good, almost proud. In the box, Mary had a few binders containing notes that she had taken at conferences and seminars, as well as a number of Irwin Schiff’s books, including The Biggest Con: How the Government is Fleecing You, How Anyone Can Stop Paying Income Taxes, and The Federal Mafia: How the Government Illegally Imposes and Unlawfully Collects Income Taxes. The books were full of dog-eared pages and highlighting. There was a real reverence in the way she held them.
Mary explained that she followed Schiff because he loved America and its freedoms. He had served his country in the Korean War. He was a true patriot. And because he loved his country, Schiff hated what he saw as the federal government’s attempt to impose an illegal and unconstitutional taxation on the people. It went against those people, and the free market economy he believed in.
For years, Mary followed Schiff’s teachings, until one day, an IRS Revenue Agent contacted her. The Revenue Agent told Mary that she was a “tax protester” and had violated the law by not paying her taxes. Mary said the Revenue Agent showed her how much money she owed the government – with interest and penalties, it came to more than 175% of the past due taxes (1). The Revenue Agent also told her that if she didn’t pay, she could be criminally prosecuted and put in prison. Mary was terrified, and sold everything she had. She sold her home, she sold the jewelry that she’d inherited from her mother, and she used up all of her retirement savings. (Ironically, had she sought legal counsel as soon as the IRS began threatening her, she might have gotten the situation resolved quickly and fairly favorably, and there would have been no need for her to give up everything she owned.)
At the end of her story, I asked Mary this question: “With everything that you’ve lost, do you still believe in Schiff?”
Mary broke into tears. I didn’t have enough pocket tissues for this gentle lady. When she was finally able to speak, Mary said, “Yes, I’ll always believe in Schiff. But I gave in to the government bullies because they’re too powerful and I’m just an old woman. I’m too weak to fight. I’m too afraid. But I’ll always admire those who do have the courage to fight.”
At the time, Irwin Schiff was in prison. I asked Mary what she thought about that fact. She replied with: “Everything Mr. Schiff said was true! The Government lied. I just wish he had told us beforehand how much the Government would cheat and break its own laws.”
Mary was not a tax protester or a tax criminal. She never had any intention of taking money that didn’t belong to her. She wasn’t a cheat or a liar. She didn’t have any sort of criminal record. She was the kind of lady who stayed in the crosswalks when she crossed the street, because she believed it was important to obey and abide by the law. Unfortunately, with all the penalties and interest that she was forced to pay to the IRS, Mary was financially destroyed.
Regardless of how one feels about Schiff’s beliefs, it’s important to remember the lives of his followers, and what some of them have suffered for their beliefs at the hands of overzealous government agents. In a criminal tax case, a human being’s very freedom is at stake. No one would know or appreciate that more than Irwin Schiff.
(1) The maximum amount that Mary could have faced owing is over 225% of the base tax owed – 100% of base, 75% as the maximum civil fraud penalty, 25% each as the maximum failure-to-file and failure-to-pay penalties, and interest. Interest, incidentally, does not cap – it continues to accrue as long as the tax debt is outstanding.