Irwin Allan Schiff (February 24, 1928 – October 16, 2015) was an American and a prominent figure in the tax protester movement. Schiff was known for writing and promoting literature in which he claimed the United States income tax is applied incorrectly. He lost several civil cases against the federal government and had a record of multiple convictions for various federal tax crimes. Schiff was serving a 13-plus year sentence for tax crimes at the time of his death. The Federal Bureau of Prisons reported that Schiff passed away on October 16, 2015. Schiff was the father of investor and former United States Senate candidate Peter Schiff.
Schiff was born to a Jewish family in Poland and immigrated to the United States where he worked as a carpenter. In 1950, Schiff attended the University of Connecticut where he obtained a B.S. with a double major in Accounting and Economics.
After college, Schiff was in the insurance brokerage business in Connecticut. In connection with his business, he was involved in a tax shelter in which he became the victim of a Ponzi scheme in which he lost his money and the money of his clients. In 1968 he testified before the Senate Committee on Banking and Currency in opposition to the removal of gold backing fromFederal Reserve Notes. In 1976, he published a book entitled The Biggest Con: How the Government is Fleecing You.
Arguments raised by Schiff
Among the arguments raised over the years by Schiff:
- that no statutory deficiency in Federal income tax can exist until an assessment has been made;
- that no tax assessment can be made unless a tax return has been voluntarily filed;
- that the Internal Revenue Service, in enforcing the income tax, seeks to impose a tax not authorized by the taxing clauses of the United States Constitution;
- that the United States Tax Court has no jurisdiction over Schiff; and
- that the United States Tax Court is not a court.
These arguments were ruled invalid in Schiff v. Commissioner. Another argument made by Schiff on his web site is: “On the[Form] 1040 itself […] you report ‘zero’ income regardless of how much you received in: wages, commissions, interest, alimony, capital gains or from operating a business. For tax purposes, ‘income’ only means corporate ‘profit.’ Therefore, no individual receives anything that is reportable as ‘income.'” This argument has been rejected by the lower courts, as well as the United States courts of appeal. See Cameron v. Internal Revenue Serv.; Stoewer v. Commissioner;Reinhart v. United States;Fink v. Commissioner;Flathers v. Commissioner;Schroeder v. Commissioner;Sherwood v. Commissioner; and Ho v. Commissioner.
Convictions for 1974 and 1975 tax years
Schiff had filed Federal income tax returns through the tax year 1973. For years 1974 and 1975, however, he refused to disclose his income. Instead, he sent unsigned 1040 forms to the Internal Revenue Service with the title (“U.S. Individual Income Tax Return”) changed to read “U.S. Individual Income Confession.” Instead of disclosing income, he included assertions of various constitutional rights on the forms, claiming essentially that under the Fourth, Fifth, Sixth, Seventh,Eighth, Ninth, Tenth, and Thirteenth Amendments he would not be an “involuntary serf” of the U.S. government. Schiff contended that because Federal Reserve notes were not backed by gold, they were not “income” for purposes of the Federal income tax.
Schiff began conducting seminars on Federal income taxes in 1977. On April 12, 1978, Schiff appeared on the NBC television program The Tomorrow Show with host Tom Snyder, arguing his views on Federal income taxes. Six days after his appearance on The Tomorrow Show, Schiff was charged with willful failure to file tax returns for the years 1974 and 1975.The modified, unsigned 1974 and 1975 forms—with no income information on them—were deemed by the Internal Revenue Service not to be valid Federal income tax returns under 26 U.S.C. § 6012. During the resulting trial, a videotape of the television program was shown to the jury. Schiff was convicted on both counts, and appealed his conviction to the United States Court of Appeals for the Second Circuit.
At the Court of Appeals, the admission of the videotape was ruled unduly prejudicial, the conviction was overturned, and the case was remanded for a new trial. He was convicted a second time for failure to file, and that conviction was affirmed.
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