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A $ 2 MILLION TAX BILL NOT A DELUSION FOR TAX PROTESTER SCHIFF

June 18, 2004

A federal court in Las Vegas has found long-time tax protester Irwin A. Schiff liable for over $2 million in tax, interest and penalties on income taxes from 1979 to 1985, according to a Justice Department announcement.

Mr. Schiff tried a novel defense against civil fraud penalties, according to the DOJ press release:

   Schiff maintained that he should be excused
   from the imposition of civil fraud penalties 
   because he allegedly has recently been 
   diagnosed as suffering from a “chronic and 
   severe delusional disorder” that resulted in 
   his irrational and incorrect beliefs pertaining 
   to the federal income tax system.

The "chronic" part was right, for sure. His How Anyone Can Stop Paying Income Taxes came out in 1982, and he has written at least five other books on the same theme. His tax life reached a state of high irony when his royalties from How Anyone Can Stop Paying Income Taxes were attached by the IRS.

But if he was delusional, it was only in believing that defense might work; the court declined to accept that defense. Two alternative strategies come to mind for Mr. Schiff:

- move to the Sixth Circuit, which seems more accepting of diminished-capacity tax protesters, or

- buy another book.

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