Obituary | Irwin Schiff

The man who said no

Irwin Schiff, America’s loudest tax protester, died on October 16th, aged 87

THE adage that one man’s hero is another man’s scoundrel was seldom truer than in the case of Irwin Schiff. From 1974 he stopped paying his federal income tax, on the chief ground that it was unconstitutional; and never paid it thereafter. Not only did he refuse to pay it himself, but he encouraged thousands of other Americans to write “zero” on their tax returns, selling books and advice and running a noisy national campaign out of his baby-blue office in Las Vegas. He spent many hours in court and 17 years in jail, and as a result became a martyr of the far libertarian right and the scourge of IRS agents everywhere.

What had suddenly moved him to defy the government with such abiding fury? Friends could not say. The family had been ardent New Dealers. At accountancy college he had ingested a lot of Hayek: too much, perhaps. Later he was a small-government conservative, quietly managing investments in Connecticut: nothing rebellious there. But all his money went south in 1968, when a con-man persuaded him to invest in a gold mine that was a giant Ponzi scheme, and possibly this was the fuse for the explosion that followed.

The Founding Fathers, he declared, had never devised an income tax. It first appeared in 1861 as a war levy, meeting such resistance that repeal came 11 years later. In 1894 it reared its ugly head again, and a man called Pollock challenged it in the Supreme Court—which struck it down. Congress still being desperate to have one, in 1913 it was enshrined in the 16th Amendment. Since then, no legal challenge to the federal income tax had ever been successful, but that did not deter Mr Schiff; for he had the bit between his teeth and, besides, the Pollock decision had never been overturned, remaining “good law to this day”.

That composed the main thread of his argument. It then got much more rabbinical and etymological. The constitutional sense of the word “income”, he argued, did not mean wages, commission, interest, alimony or capital gains; only corporate profit, and therefore nothing received by an individual could be taxed at all. The constitution also assumed that “income” was solid gold and silver coin, not those flimsy bits of paper whose detachment from the gold standard had, in his view, ruined the country.

Compliance, he argued, was in any case voluntary; if compulsory, he became no more than a serf of the government. Since the tax was unlawful, an income-tax “declaration” was, in fact, a “confession” of facts that the government had no right to know. Under the Fourth, Fifth, Sixth, Seventh, Eighth, Ninth, Tenth and 13th Amendments, especially the Fifth against self-incrimination, he had no duty to co-operate and tax agents had no power to make him.

He knew the law up and down, forwards, backwards and sideways, and defended himself volubly in court, though he was no lawyer. Cases, clauses and codicils tumbled from his lips. Nonetheless, because there was a monumental criminal conspiracy of the government, the judiciary and the IRS against him, his arguments were dismissed as frivolous and he always lost. On multiple occasions from 1978 onwards he was convicted for wilful failure to file returns, for tax evasion and for conspiracy to defraud the United States of an amount that rose steadily to $4.2m by 2005. In that year he was also convicted of helping to falsify the returns of 3,100 other folk who owed, in total, $56m to the government. But none of this was wilful, he said; since his arguments were always dismissed as Dead Wrong, he was probably delusional and could not help himself.

In jail and out he wrote, and self-published, a stack of books. “The Biggest Con: How the Government is Fleecing You” (1976) got a glowing review in the Wall Street Journal; “How Anyone Can Stop Paying Income Taxes” (1982) became a New York Times bestseller. “The Federal Mafia” (1992) brought down a federal injunction, the first book banned from sale in America since “Fanny Hill” (for obscenity) in 1821. Unfazed, Mr Schiff gave it away on his website as soon as technology allowed. He liked to pose outside his office, in check shirt and jeans, with his thumbs stuck in his wide leather belt: a cowboy aiming to smash, with his legal acuity, every bottle of snake-oil on the government’s shelf.

Hero of zero

It might all have been fun if he had been more crazy and less calculating; but he was moving assets around between several bank accounts, the better to confuse the issue of what was income and what wasn’t. And it might have been more heroic, though still doomed, if others had not been hurt. But the hundreds who followed him and declared their income “zero” soon found themselves in trouble, with a threatening letter from the IRS or a lien on their car or their house. He could then offer them, for a price, advice to deal with that too, up to $1,000 for a “tax-court toolkit”. No wonder he liked to do business in Nevada, where gambling was a way of life.

The fact that he spent his frail last years in federal prison made him a martyr to the tax-protest cause. He would have made a better one if the pleasant open facilities where he resided, and all meals and services therein provided, had not been paid for by Uncle Sam; or rather, by those who uncomplainingly stumped up their federal income taxes, unlike himself.

This article appeared in the Obituary section of the print edition under the headline "The man who said no"

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