Originally published on Forbes.com Nov 8th, 2013
Irwin Schiff is probably one of the more famous alternate tax thinkers. His seminal work “How Anyone Can Stop Paying Income Taxes” is available in hardcover on Amazon for one cent. In his twilight years (He was born in 1928), he has been living in free federal housing. According to the Bureau of Prison Inmate locator he is at Fort Worth FCI with a projected release date of July 26, 2017. His son, Peter, who considers him “America’s foremost political prisoner” has been campaigning for his release. You can order your “Free Irwin” T-shirt here for $25.
When it comes to tax controversy there is a rather long continuum you can follow. Knock on wood, but for many of my clients in the last couple of years, it has ended where it should – a no-change audit report from a revenue agent, whom my client never had to meet. Mr. Schiff was in court at the far opposite end of the spectrum. That would be appealing your sentence after you have already been convicted and are serving your prison term. That is what Mr. Schiff was up to. The Ninth Circuit had disappointing news for Mr. Schiff yesterday. His appeal, based on ineffective assistance of counsel has been turned down.
Here are the high points:
Schiff’s argument, that appellate counsel was ineffective for not appealing the district court’s exclusion of evidence of his bipolar disorder, fails. Schiff’s claim regarding the exclusion of mental health evidence is similar to one raised by codefendant Cohen on direct appeal, and which formed the basis for this Court reversing Cohen’s conviction and remanding for a new trial. United States v. Cohen, . But Schiff and Cohen were situated very differently with respect to knowledge about the validity of their beliefs. Even assuming Schiff’s appellate counsel was ineffective, Schiff cannot demonstrate that he was harmed by counsel’s failure to raise this issue on appeal.
I have to say he has my sympathy, there. Bipolar disorder has marred my career from time to time. It is a tricky thing to catch because you can feel so good when you are manic. That’s the more dangerous part of the disease when you do risky stuff. Depression is not so dangerous, unless, of course, you get suicidal.
On direct appeal, this Court characterized the evidence against Schiff as “overwhelming, particularly the evidence that he intended to deceive the government through the use of zero returns.” United States v. Cohen, 262 F. App’x 14, 16 (9th Cir. 2007). The overwhelming evidence at trial was that Schiff was aware his claimed beliefs lacked merit and that he simply disagreed with the law. Schiff had previously been punished for filing zero returns. He knew that numerous tax returns submitted by his clients had been returned as frivolous by the IRS and had resulted in penalties upheld by courts. He also knew his positions regarding tax law were rejected in every court to consider them.
Given the extensive evidence that Schiff knew his views of the tax law were incorrect, he cannot establish that his Cheek good-faith defense was prejudiced by counsel’s decision not to raise on direct appeal the district court’s suppression of evidence of his bipolar disorder.
The problem with the Cheek defense is that you have to be smart to raise it, but if you show that you are too smart, then it does not work.
Schiff’s counsel was not ineffective for choosing not to appeal the district court’s exclusion of certain testimony seeking to confirm Schiff’s own beliefs that the tax laws are invalid and unenforceable. Counsel could have reasonably concluded that evidence was irrelevant to the issue of willfulness.
Finally, appellate counsel was not ineffective for failing to appeal the district court’s refusal to admit into evidenceThe Great Tax Hoax , a book Schiff authored which explains how he reached his beliefs about tax laws, and a 3 1/2 -hour tape of a video seminar in which Schiff explains his beliefs. The book and video contained misstatements of the law and would have served to confuse the jury and waste its time.
I’m going to seeking more commentary and may do a follow-up post on this. This decision makes me a bit pessimistic for Kent Hovind (Doctor Dino)’s appeal of his sentence. Of course, the doctor has God on his side, so that should make a big difference.
You can follow me on twitter @peterreillycpa.