Fed 'strike force' targeting tax reformers?

"Tax honesty" activists say they are being targeted for reprisals by "strike force" teams comprised of Internal Revenue Service agents and Department of Justice officials for attempting to force the federal government to answer key questions about the legality of the income tax.

Bob Schulz, founder of the tax-reform group We the People, says the teams, "with the assistance of federal judges, [have] been actively engaged in a coordinated, nationwide campaign to silence all people who have been openly asking the government to answer tough questions about the origin, authority, and operation of the income tax system."

Bob Schulz

The formation of the teams was first broached during Senate Finance Committee hearings April 5. Those hearings, chaired by Sen. Charles Grassley, R-Iowa, examined groups and individuals who some lawmakers alleged were defrauding taxpayers with "schemes, scams and cons."

According to a transcript of those hearings, the strike-force concept was discussed between attorney and San Francisco Examiner columnist Robert L. Sommers and Sen. Max Baucus, D-Mont. Editor's note: You must have Adobe Acrobat to open and view this .pdf file.

At Baucus' request, Sommers explained the teams would consist of "maybe 10 people" and include computer programmers and attorneys. Their goal would be to search the Internet daily for "new tax scams" and, when found, move quickly to get the site shut down, either voluntarily or through court action.

"… You have to understand, these people get into the system and clog it up," Sommers said. "They get the IRS agents, the examiners. They sit there and they frustrate them."

The IRS says the Constitution and Congress give it the authority to collect income taxes. Besides reams of tax law, the 16th Amendment granted Congress the "power to lay and collect taxes on incomes. …" Many activists, however, question the validity of the amendment's ratification, as well as its scope.

One American who has already been targeted is Irwin Schiff, a popular figure in the tax-reform movement. Fifteen armed IRS agents raided his Las Vegas anti-tax business in February, carting off documents and boxes of records.

Irwin Schiff

In June, the U.S. District Court for the District of Nevada ordered Schiff, as well as business associates Cynthia Neun and Larry Cohen, to stop "engaging in … fraudulent or deceptive conduct" relating to Schiff's business, which was advising people they did not owe income taxes. Editor's note: You must have Adobe Acrobat to open and view this .pdf file.

"He has written more books on the subject of the income tax than any other American, selling over 500,000 copies," says information on Schiff's website. "Hundreds of thousands (if not millions) of Americans no longer pay income taxes because of the information contained in his books."

The 35-page court order, dated June 16, says Schiff and his associates were "promoting through consulting services, websites and tax-scam packages the filing of 'zero-income' federal tax returns … directing customers to inundate the IRS, federal courts and the Department of Justice with frivolous lawsuits and IRS hearings."

"The complaint alleges that defendants recruit customers to the zero-income tax return scheme by falsely stating income earned by individuals is not subject to federal income-tax laws," said the order.

The government accused Schiff of "promoting abusive tax shelters, aiding and abetting understatement of tax liability, preparing any part of a return or claim for refund that includes an unrealistic position," and other violations of federal tax law.

Though Schiff's website is still in operation, the court ordered him to post its ruling on his site – a suggestion made to the Senate Finance Committee by Sommers.

"I … think anything dealing with that site, any injunctions, anything else needs to be right on that website as well …," Sommers testified before the panel.

Joseph Banister, a former IRS special agent, says his former employer is "non-responsive, unable to withstand scrutiny, tyrannical, and oblivious to the rule of law and the U.S. Constitution."

"I had taken this job thinking I'd be wearing the white hat, and I slowly found out I was not wearing the white hat," Banister said in a 1999 interview with WorldNetDaily. "So something had to change."

He has questioned whether paying income tax is mandatory, whether the 16th Amendment was properly ratified, and whether income taxes pay for government or interest on the national debt.

So has Schulz, Schiff and a host of other tax reformers. The IRS says it has addressed the issues, but critics say the agency has dismissed such questions as "frivolous," and that it hasn't really answered them.

In fact, Schulz first came to national prominence in July 2001 in a dramatic attempt to get such questions answered. He began what became a three-week hunger strike to have those and other questions answered, stopping only when IRS and Justice Department officials agreed to attend a forum sponsored by his organization – an agreement from which the government ultimately reneged.

Others have also tried to get answers from the government. During the April hearings, one witness – Bethesda, Md.-based financial planner and insurance analyst J. J. MacNab – asked senators why the government didn't simply answer the questions posed by the tax reformers.

"They have concerns and they truly believe they have a right to address them," she said during testimony. "They have asked on numerous opportunities for the IRS to review their materials and tell them they were wrong. Let the IRS do that. If they are trying so hard to get attention, give it to them."

But the panel moved on. MacNab's request was ignored.

Schulz did not indicate he was being targeted by a so-called strike force, but one thing is clear: His group is readying a lawsuit against the federal government, charging the income tax is unconstitutional. After being shunned, he's going forward with both barrels.

Another thing is equally clear: The IRS has it in for anyone promoting the view that Americans don't owe income taxes.

"No matter how some things are sliced, they're still baloney," the agency says in a warning to consumers about "tax scams." "Remember that if it sounds too good to be true, it probably is."