Justice Department Cracks Down on Fraudulent Tax Schemes
The Department of Justice has banned sales of a controversial tax strategy book, arguing that the book is not protected by the First Amendment because it encourages the unlawful action of not paying income taxes. In a different case a federal judge ordered a Georgia man to stop promoting a slavery reparations tax credit and to turn over a list of his clients.
"The tax division is focusing on promoters of tax-evasion schemes," said Eileen J. O'Connor, assistant attorney general for the Department of Justice's tax division.
First Amendment Does Not Apply
In the case of the banned book, federal district court Judge Lloyd D. George ordered that 75-year-old Irwin Schiff stop selling copies of his book, The Federal Mafia, in which Mr. Schiff argues that payment of income taxes is voluntary and encourages people to file income tax returns showing no income. It is estimated that at least 5,000 people have relied on Mr. Schiff's book in preparing their income tax returns.
The judge relied on a U.S. Supreme Court ruling that authorizes injunctions against promoters of abusive tax schemes. Mr. Schiff has asked that the Court reconsider its order and said he plans to appeal the case.
While copies of Mr. Schiff's books are not available in bookstores, nor may Mr. Schiff sell any more copies of his book on his Internet Web site, the book is still available for a premium at outlets such as eBay.com and various used book services.
Feds Shut Down Slavery Reparations Scam
U.S. District Court Judge for the Middle District of Georgia, Duross Fitzpatrick, has ordered that Morris James of Montezuma, Georgia stop distributing letters promoting a slavery reparations tax credit. Mr. James has also been ordered to turn over his list of clients.
Mr. James collected $50 apiece from as many as 6,000 black taxpayers who were told that Mr. James would help them file forms so that they could collect $43,000 from the federal government as payment for past injustices relating to slave ownership.
"Claiming tax refunds or credits for slavery reparations is illegal," said Ms. O'Connor. "The Justice Department is taking vigorous action to stop the promotion of schemes that undermine the federal tax system and leave honest taxpayers footing the bill."