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Schiff proceedings

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  • Legalbear
    A Connecticut Yankee in the Court of King George by Jim Davies Irwin Schiff was born and raised in Connecticut. There in Hamden outside New Haven this UCON
    Message 1 of 1 , May 6 6:12 PM
      A Connecticut Yankee in the Court of King
      George by Jim Davies Irwin Schiff was born and
      raised in Connecticut. There in Hamden outside
      New Haven this UCON econ graduate practised as
      an insurance broker, and there he made some of
      his most profound discoveries.

      One of the first was that paper isn't money.
      Of course it's not - how could it ever be? It has no
      intrinsic value, and it's far too easy for government
      to counterfeit, and anyway the rules under which
      ours are permitted to exist very clearly specify that
      governments shall "coin" money. Irwin Schiff
      never did find out how to "coin" bits of paper, and
      in 1968 just as Nixon was poised to take America
      right off the gold standard, he went to Congress
      and so testified. It failed to listen; and so the
      printing-press inflation of the 1970s took its
      devastating toll.

      Soon afterwards came another
      Republic-altering find: there is no way at all that
      laws can compel the filing of a 1040 every April
      while the Fifth Amendment still stands. Again, like
      most huge discoveries, this is perfectly obvious
      when one thinks about it; how ever could there be?
      - but sadly, most don't think. The Fifth promises
      we shall not be compelled to be a witness against
      ourselves, while every April a hundred million or so
      of us suppose we're compelled to be witnesses
      against ourselves.

      For publishing this vitally liberating
      - like many great discoverers before him including
      Galileo - Schiff was treated to four years' free
      accommodation by the government that subsists
      on the hundred million contributions that
      accompany those annual forced confessions; but
      like a true Yankee, his spirits were in no way cast

      In 1992 Irwin Schiff released his current way
      to circumvent that viciously lawless piece of
      government larceny and tens of thousands of us
      since have been using it with spectacular success.
      That fact has gotten right up the government's

      So last month in a last desperate attempt to
      prop up its crumbling "Income Tax" system, the
      Feds tried to violate another of Schiff's
      Constitutional rights: his First. Having totally
      to answer him, they now want to stop his
      questions; they have moved to make him silent. In
      a Federal Court run by one of their most loyal
      judges, Lloyd George (not to be confused with the
      British Prime Minister, a "Liberal" when the word
      meant something like it does in the dictionary)
      Irwin Schiff was ordered - temporarily, at least - to
      stop selling and explaining his own publications.

      Saddam Hussein survived three decades in
      brutal power in part by silencing dissent - because
      no First Amendment prevails in Iraq. This
      newspaper publishes its views because in America,
      it still does. But if King George has his way, it may
      not for much longer. The ACLU has taken note,
      and is supporting Schiff.

      Friday's hearing before His Majesty was a
      farce. The ban- and gag-order was being sought by
      the US Department of "Justice" on behalf of its
      buddies in the IRS, and incredibly, they did not put
      on the stand either of the two witnesses they had
      prepped. Irwin Schiff, like Moses fresh from Sinai,
      was loaded for bear so they didn't risk it. Instead
      Schiff presented two of his own highly articulate
      witnesses (and then was prevented from presenting
      more, by Hizzoner!) and the government's attorney
      didn't even cross-examine either! So their
      testimony that, under Schiff's guidance, they had
      searched the lawbooks and found no law to
      compel the payment of personal income tax was
      left unrebutted!

      No evidence was introduced to support the
      allegation that Schiff has been inciting many
      thousands of us to break the law; nor was any law
      identified that we might possibly have been
      breaking. And when Schiff put the lawbook on the
      table and offered to withdraw his own publications
      voluntarily if anyone present would identify ONE
      law that compels the payment of income tax, the
      government remained deafeningly silent.

      Some of Schiff's friends had thought of
      attending King George's Court dressed as
      kangaroos. Perhaps at the final hearing on May 1st,
      they will. They certainly should. Because Lloyd
      George has his name engraved over the courthouse
      door, and there is no way he is likely to throw
      away honor and prestige of that magnitude by
      doing such a foolish thing as upholding the Law.

      But if he did, just think: April 15th would
      all of us be just another pleasant Spring day; the
      vast intrusiveness of the government's infamous
      1040 Form would go in the same ash can as the
      KGB and Saddam's secret police; our take-home
      pay would explode by 25% or more overnight; and
      a bright new era of American freedom and
      prosperity would begin.

      From Schiff himself:

      Friday, April 11th Report From The War
      Room: I will give you a brief synopsis of what
      transpired at the Preliminary Injunction �hearing�
      that took place today. When I get the tape I will
      post it to my web site, so you can hear the whole
      �hearing� and get an understanding of what passes
      as �due process of law� in the good ol� U.S. of A.

      First of all, the Government put on no
      witnesses, even though they had assured my
      attorney (at that time) that they would produce at
      least two witnesses, an IRS attorney and another
      witness. But apparently, after hearing my opening
      remarks they were too frightened to put anyone on.
      After I testified under oath, I invited the
      Government to cross-examine me. They refused. I
      invited the Government to identify one phrase from
      �The Federal Mafia� or any of my supplemental
      material that encouraged anyone to �evade� income
      taxes � since that was one of the Government�s
      claims. And they refused to do that too. I put on
      three witnesses. I had 4 more to put on, but Judge
      George refused to allow me to call any more
      additional witnesses because �Their testimony
      would be repetitive.� Well it would have to be
      repetitive, because the heart of the Government�s
      case was that I was selling a �tax shelter� or a
      �scheme.� So I could put on 100 witnesses that
      would testify that they stopped paying income
      taxes because �The Federal Mafia� merely led them
      to research the law itself, and it was their own
      research that led them to the belief that they did not

      have to pay income taxes. The Government was
      claiming that what I sold was a �tax shelter� or a
      �scheme� yet they did not put on witness who
      testified that they purchased a �tax shelter� or
      �scheme� from me.

      Each of my three witnesses testified that I
      sold them no such thing. �The Federal Mafia,� they
      said, merely piqued their interest in the legality of
      the income tax. They all testified that as the result
      of their reading �The Federal Mafia� they
      proceeded to check out the law itself (all of them
      testified they subsequently purchased the Internal
      Revenue Code from me) and the court cases I
      cited. I then asked them if The Federal Mafia�
      caused them to stop paying income taxes. They all
      said, �No.� And when I asked them what persuaded
      them to stop paying income taxes, they all
      answered, �Their own independent research� or
      words to that effect. And when I asked them what
      made them conclude from their independent
      research that they didn�t have to pay income taxes,
      they all testified that their independent research
      persuaded them that �1) They could find no law
      that required them to pay income taxes; 2) They
      could find no law that made them �liable� for
      income taxes; and that 3) They had no �income� in
      a �constitutional sense� � which meant a corporate
      profit and they all referenced the Smietanka
      decision. I then asked each of them, �Did you stop
      paying income taxes because I sold you a �tax
      shelter,� �No.� Did you stop paying income taxes
      because I sold you a scheme?� �No.� �Then on
      what basis did you stop paying income taxes?�
      �My own independent research� was the answer. I
      asked two of my witness, �If when the Government
      cross-examines you, the US Attorney shows you a
      law that makes you liable for income taxes or
      requires you to pay income taxes would you start
      paying income taxes again?� Both witnesses
      answered, �Yes.� (I failed to ask this question of
      the first witness.) Therefore it was incumbent on
      the Government to produce such a law on
      cross-examination � but the Government failed to
      do so. Earlier in the �trial� I offered to withdraw my

      opposition to the Injunction issue, if the
      Government would simply turn to the law that
      made me Oliable� for income taxes or required me
      Oto pay� the tax.� When I said that, I actually
      handed the Code to the Government�s attorney,
      Evan J. Davis, a total liar and a scoundrel (in other
      words, he has all the qualification to be a U.S.
      Attorney in the Tax Division of the DOJ)) yet with
      the Code sitting in front of him, he refused to
      produce the Code sections, even though I offered
      to drop my opposition to the Government�s suit if
      he would do so.

      There is a principle in law, that failure to
      answer when a response is called for is indicative
      of fraud. It was incumbent upon the Government
      to respond to my offer and those of my witnesses
      � but Davis failed to do so. Why? Because that
      scoundrel knows that there aren�t any such laws �
      yet he criminally prosecutes others and steals
      property from them (by way of civil litigation)
      pursuant to a tax he knows does not exist. Did I
      say he was a scoundrel? He is worse: he is a
      criminal. If I could question him before a grand
      jury I could easily get him indicted under 18 USC
      241 and 26 USC 7214 as well getting him indicted
      for violating his oath of office � which I also
      explained to Judge George in my opening remarks.

      But you will hear all of this as I have posted

      the audio file of the �hearing� to my Web Site.
      Meanwhile, this is a good time to order all of my
      other sensational books that you might not have.
      So, stay tuned.

      Irwin Schiff

      And for those of you true die-hards a couple
      of good ones on the general insanity of a country
      that takes nearly 40% of the people's earnings
      every year:

      Sent: Tuesday, April 15, 2003 2:17 PM
      Subject: [Lis-LEAF] 1] 10 Outrageous Facts
      About the Income Tax 2] A Tale of Two Taxes 3]
      Tax Plan Revival? (take a poll, it'll last longer)


      As you struggle to prepare your taxes this
      year, you may take some comfort in knowing that
      your headache is being felt across the country. The
      following odd and outrageous facts show how
      widespread income tax problems are: The U.S.
      "tax army" is bigger than the U.S. army in Iraq.
      Income taxes are so complex that there are up to
      1.2 million paid tax preparers in the country -- six
      times more than the number of troops in Iraq. The
      tax army includes legions of accountants, lawyers,
      and computer experts -- some of the best minds in
      the country. Unfortunately, their brainpower is
      adding little to the nation's standard of living.

      A tax form for every special interest. As the
      income tax grows more complex, the number of
      IRS tax forms has jumped from 402 in 1990 to 526
      by 2002. Congress hands the accountants business
      on a silver platter when they create special interest
      tax forms such as "8845-Indian Employment
      Credit" and "8834-Qualified Electric Vehicle
      Credit." When Congress penalizes an activity, we
      get tax forms such as "6197-Gas Guzzler Tax." It's
      time to end the micromanaging and adopt a simple
      flat-rate tax. Until then, Congress needs to
      supplement "6478-Credit for Alcohol Used as
      Fuel" with form "XXX-Credit for Alcohol Used
      for Drinking."

      Double-tax on dividends: 60 years and still
      not fixed. Sixty years ago, a Treasury report noted
      that "double taxation of corporate profits is the
      principal problem raised in connection with the
      corporation income tax." In the 1930s, a Treasury
      report argued that the tax disincentive to pay
      dividends caused corporate management
      problems. Recent scandals proved them right.
      Congress should bite the bullet and reform
      dividend taxes now -- before the next round of
      corporate scandals begins. Congress promotes
      discrimination through the tax code. The front of
      the Supreme Court building boldly declares "equal
      justice under law," yet the income tax has hundreds
      of discriminatory provisions. For example,
      homeowners are treated more favorably than
      renters since they can deduct mortgage interest and
      other itemized deductions. Consider that a
      higher-income homeowner can effectively deduct
      car loan interest by shifting around his finances but
      a lower-income apartment dweller cannot.
      Americans would not stand for such discrimination
      on other taxes -- imagine if each shopper at
      Wal-Mart was assigned a different sales tax rate!

      Congress on tax complexity: Who us?
      Congress frequently holds hearings on tax
      simplification so members can denounce the tax
      code's complexity. Each time, congressional
      experts and outside think tanks provide useful
      simplification ideas. Then when the TV cameras
      are turned off, Congress promptly ignores them
      and votes for more special interest breaks. The
      result: The number of pages in the tax code and
      regulations doubled from 26,300 in 1984 to 54,846
      by 2003, according to tax publisher CCH.

      AMT designed to catch 155 taxpayers will
      soon catch 37 million. The alternative minimum tax
      is an unneeded parallel tax system alongside the
      ordinary income tax. It began life in 1969 after
      Congress was shocked (shocked!) to learn that
      155 wealthy individuals were not paying tax
      because they used too many of the deductions that
      Congress had provided them. The AMT has been
      a complex nuisance ever since. But this dumb idea
      aimed at the rich is set to explode on the
      middle-class as the number of AMT taxpayers
      skyrockets from 3 million today to 36 million by

      Voluntarism works for the U.S. military, not
      the income tax. For years, officials have hailed the
      income tax as a voluntary system. The Treasury
      calls it "our voluntary tax system." The IRS says
      that it pursues "enforcement programs to promote
      voluntary compliance" and establishes "strategies
      to maximize voluntary tax law compliance by
      emphasizing customer satisfaction." But with 32
      million IRS penalties assessed each year and about
      $10,000 in income taxes imposed on each
      taxpaying household, the tax isn't voluntary and
      these customers aren't satisfied.

      Congress can't figure out how to measure
      "income." Although the income tax is 90 years old,
      Congress still can't figure out how to measure
      "income." Some income such as municipal bond
      interest is not taxed, but other income such as
      dividends is taxed twice. The income tax treatment
      of savings is particularly incoherent and unstable.
      For example, there have been 25 major changes in
      the capital gains tax since 1922. The solution is to
      replace the income tax with a low-rate tax that
      exempts savings.

      Family saving shouldn't require an advanced
      math degree. Shouldn't saving for education,
      retirement, and other items be as simple as putting
      money in the bank? Instead, Congress has
      manufactured hundreds of special savings rules,
      such as for 401(k)s, Keoghs, deductible IRAs,
      nondeductible IRAs, education IRAs, Roth IRAs,
      traditional pension plans, annuities, SIMPLEs,
      SEPs, MSAs, and others. The IRS guide to IRAs
      alone is 105 pages long! President Bush's initiative
      to consolidate the savings plans and create a
      universal IRA would be a good step to bring some
      sanity to this mess.

      Income taxes: A bad idea that got worse. The
      income tax is not an example of a good idea gone
      bad. It was bad from the beginning, and it just
      keeps getting worse. The income tax distorts
      financial planning and business investment, and it
      encourages tax avoidance and evasion. Because
      the income tax is built on an unworkable base of
      "income," the law is continually changing. Let's
      simplify Americans' finances and disband the tax
      army by pursuing fundamental tax reform.

      [CHART of total pages of federal tax rules
      from 1913 through today] Source: CCH Inc.
      Number of pages in the CCH Standard Federal
      Tax Reporter, www.cch.com.

      2] A Tale of Two Taxes by Michael J. New

      Michael J. New is an adjunct scholar at the
      Cato Institute and a post-doctoral fellow at the
      Harvard-MIT data center. As April 15 approaches,
      taxpayers in the United States are facing both the
      best of times and the worst of times. At the federal
      level, President Bush has surprised many by boldly
      calling for a new round of tax reductions.
      However, in the states, persistent budgetary
      shortfalls are causing many governors to propose
      large tax hikes to bring their budgets into balance.

      Why are tax cuts being proposed at the
      federal level while tax hikes are being enacted in the

      states? The most obvious reason is that the federal
      government can run deficits, while 49 states are
      forced to adhere to constitutional balanced budget
      amendments. However, it should also be noted that
      part of the reason why President Bush can propose
      tax cuts is because, for much of the 1990s, the
      federal government was more fiscally disciplined
      than the states.

      Indeed, between 1992 and 2000 real
      expenditures at the federal level have grown by 9
      percent whereas in the states, expenditures have
      grown by more than 25 percent. What accounts for
      this difference in fiscal outcomes? One factor that
      cannot be overlooked is the presence of deficits at
      the federal level for much of the 1990s. Even
      though the strong economy boosted tax revenues
      at both the federal and state level, the presence of
      federal deficits made it easier for Congress to resist

      the temptation to increase spending.

      However, in 1998 all of that changed. The
      federal government ran its first surplus in 29 years
      and the subsequent experience is instructive.
      During the last 5 years, where surpluses were
      projected, non-defense discretionary spending has
      soared, increasing by $90 billion in constant dollars
      (adjusted for inflation). In contrast, during the era
      of federal deficits that preceded the 1998 surplus, it

      took 24 years for real non-defense discretionary
      expenditures to increase by $90 billion.

      Supporters of limited government typically
      oppose federal programs because of the costs they
      impose on taxpayers, the perverse incentives they
      create for their recipients, and because the
      programs crowd out more efficient private
      endeavors. However, in practice, the presence of
      deficits appears to be the only effective line of
      defense that fiscal conservatives have had against
      spending increases. This actually creates a good
      argument for President Bush's tax cuts. By
      reducing tax revenues, surpluses will be
      postponed, making it easier for Congress to resist
      the temptation to spend more.

      Balanced budget amendments prevent states
      from relying on deficits to curtail spending.
      However, the presence of ballot initiatives in many
      states makes it possible for activists to enact fiscal

      discipline measures that can exert control over
      taxes and spending. In fact, supermajority tax limits
      have been effective at blocking or minimizing tax
      increases in Arizona, Oregon, Oklahoma, Nevada,
      and Louisiana. Similarly, tax and expenditure
      limitations (TELs) in Washington and Colorado
      have enjoyed success at limiting spending and
      providing tax relief.

      Now it should be noted that fiscal restraint
      can sometimes be achieved through political
      leadership. President Reagan was able to enact
      some real reductions in expenditures after being
      elected in 1980. Similarly, in New Mexico, the
      fiscal restraint shown by former Governor Gary
      Johnson has made it possible for his successor,
      Democrat Bill Richardson, to enact sweeping tax
      reductions. However, such leadership on fiscal
      issues is in short supply these days. Still, recent
      history indicates that tax cuts at the federal level
      and fiscal restrictions in the states can limit
      spending, create economic growth, and result in
      prosperity and good times for all.

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