The general thrust of Peter's most recent blog is that the Schiff's claim that some early cases establish the unconstitutionality of the income tax as it is applied to most taxpayers. Peter says:
I heard from Andrew Schiff, Peter’s younger brother who works at Euro Pacific Capital, the investment firm Peter founded. He wanted to emphasize a point that his father raised in his appeal, but he agreed to answer a couple of my questions. The most important one was whether he and his brother recommend that people imitate their father. He said absolutely not. ”Don’t do it. It is a bad idea.” Andrew and Peter both think that their father’s interpretation is correct, with Peter being perhaps a bit more vehement about it. Nonetheless, they both recognize that the whole weight of the judiciary is on the other side. Many proponents of positions similar to Irwin Schiff’s neglect to provided this important caveat to those they preach to.The federal courts have heard hundreds, probably thousands, of tax protestor arguments of variations of the same theme. Those courts have rejected the arguments. The Schiffs' position is that the courts are wrong. Which, in turn, make those courts wrong in punishing Irwin Schiff.
The problem as I see it is that words are indeterminate. I am not a big fan of the plain meaning of words. Context and history and nuance contribute to the meaning of words. Those of my generation learned in the first week of law school Justice Oliver Wendell Holmes famous quote (Towne v. Eisner, 245 U.S. 418, 425 (1918), here):
A word is not a crystal, transparent and unchanged, it is the skin of a living thought and may vary greatly in color and content according to the circumstances and the time in which it is used.The meaning of words changes; meaning evolves, sometimes subtly sometimes dramatically. It is all in interpretation. Those who study the Bible know that it is all about interpretation which can make the words mean something that is not self-evident or even what the words might have originally meant (if we even know what they originally meant; too bad we don't have legislative history for the Bible). The words that the courts have interpreted to mean that taxes are constitutional are their meaning today, regardless of what the constitution may have meant to earlier interpreters..
We encountered the problem in the Second Circuit's decision in United States v. Coplan, 703 F.3d 46 (2d Cir. 11/29/12), where the Second Circuit observed that, through the Supreme Court's interpretation of words in the defraud conspiracy statute, the words have come to mean something more than Congress probably originally meant in enacting those words. See Coplan #1 - Panel Questions Validity of Klein Conspiracy (Federal Tax Crimes Blog 12/1/12), here. As interpreted and expanded, we thus have a judicially created crime. Whether that is good, bad or ugly, that is the case. And many have gone to jail based on the expanded interpretation of the defraud conspiracy (maybe they -- or most of them -- would have been convicted without the expanded interpretation, but we will never know that0. More importantly, to the extent that the expanded criminality line can be discerned, citizens accommodate their behavior to that shifting line. Except for those citizens trapped in the past.
Mr. Schiff simply did not accommodate his behavior to a line that he knew had shifted. In that sense, his was a quixotic adventure, even assuming that he acted with the best of motivations.
Let me say that I do not agree with Mr. Schiff's theory that the old cases he relies on, read in a vacuum, mean what he claims they mean. Maybe that is because I can't read them in a vacuum and inevitably am influenced by the subsequent interpretive glosses put on the words of those cases.
So, as we know from all of life, even when we are "right," sometimes it is better just to re-orient and conform and get on with out lives. I am reminded of something I heard (at least think I heard) about Abraham Lincoln when, in a trial, he would make a good objection and the judge would overrule it. He would say "Well, I must have been wrong." And he moved on.
Finally, as another example of how words are indeterminate, the DOJ Tax had attempted at one time to move away from the term "tax protestor" in a criminal context and use the term "tax defier." Thus, in the DOJ Tax Criminal Tax Manual, here, we find the following:
40.00 TAX DEFIERS (also known as illegal tax protesters) n1
n1 The IRS Restructuring Act of 1998, Section 3707, precludes the IRS from labeling a taxpayer as an “illegal tax protester” or using any other similar designation. The Department of Justice is not included in this legislation, and the preclusion therefore does not apply to it. Prosecutors, however, should be careful not to elicit from an IRS employee testimony characterizing a person as an “illegal tax protester” or a similar designation.I am not sure that that shift of words really caught on generally. I still generally use the term tax protestor, although I know it probably is more inclusive than those who act with tax criminal intent -- intentional violation of a known legal duty. But, anyone reading or hearing my use of the term in the context in which I used it will know what I mean (as Justice Holmes' quote suggests).