COURT ENJOINS IRWIN SCHIFF AND TWO ASSOCIATES

WASHINGTON, D.C. - A federal court in Las Vegas today issued an order barring Irwin Schiff and two associates, Cynthia Neun and Lawrence N. Cohen, from selling their tax scheme, which the court held falsely claims that paying federal income tax is voluntary. The order, which will be in effect indefinitely, bars Schiff and his associates from: 1) advertising or selling Schiff’s “zero-income tax return” plan; 2) preparing tax returns for others; and 3) assisting others to violate the tax law, including by “selling services, books or other materials that provide direction about how to fill out fraudulent or false tax forms...”

The court required Schiff, Neun, and Cohen to provide a copy of its order to each of their customers and to post it on their websites within ten days. After noting that the government provided evidence showing that the stated purpose of Schiff’s scheme “was, in part, to assist in the commission of a crime,” the court rejected Schiff’s contention, also asserted by the American Civil Liberties Union in a “friend of the court” brief, that the First Amendment prohibits any injunction against the sale of Schiff’s book The Federal Mafia.

“Today’s order is another in the long line of court orders stopping the sale of fraudulent tax scams,” said Eileen J. O'Connor, Assistant Attorney General in charge of the Justice Department’s Tax Division. “As the Supreme Court recently held in a unanimous decision, ‘the First Amendment does not shield fraud.’”

In today’s order, the court found that the promotion of Schiff’s scheme “has involved over 3,000 individuals and an estimated $56 million in attempted tax evasion,” further noting that “a number of individuals have been convicted of tax crimes after following Schiff’s theories.” According to papers filed in the case, Schiff himself has twice been convicted of tax crimes.

For more information on this case and for information on other tax-scam enforcement actions, go online to http://www.usdoj.gov/tax/03_tax_167.htm

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