The attorney who was rendered ineffective because he did not raise these issues in my direct appeal was Michael B. Nash of Chicago. There were other strong issues that Mr. Nash should have raised but did not, but for reasons I need not go into, they could not be raised here....

Transcript of Irwin Schiff Kangroo court  "trial"  - Click for the Habeas Corpus, Jury Trial Day 1 091205.pdf, Jury Trial Day 2 091305.pdf, Jury Trial Day 3 091405.pdf, Jury Trial Day 4 091505.pdf, Jury Trial Day 5 091905.pdf, Jury Trial Day 6 092005.pdf, Jury Trial Day 7 092105.pdf, Jury Trial Day 8 092205.pdf, Jury Trial Day 9 092612.pdf, Jury Trial Day 10 092705.pdf, Jury Trial Day 11 092805.pdf, Jury Trial Day 12 092905.pdf, Jury Trial Day 13 100305.pdf, Jury Trial Day 14 100505.pdf, Jury Trial Day 15 100505.pdf, Jury Trial Day 16 100605.pdf, Jury Trial Day 17 101105.pdf, Jury Trial Day 18 101205.pdf, Jury Trial Day 19 101305.pdf, Jury Trial Day 20 101705.pdf, Jury Trial Day 22 101905.pdf, Jury Trial Day 23 102005.pdf, Jury Trial Day 24 102405.pdf

Important Notice - Please Read:
On October 14, 2008, Las Vegas Federal Judge, Lloyd D. George pursuant to to a summary judgment (i.e. no hearing) gave the United States a permanent injunction, barring Cindy and myself from doing things we don't do anyway and asking me to remove from my website material that is also not there.  (No I'm not kidding).  On November 24, 2008 I filed a 23 page motion requesting Judge George to stay his injunction pending a review by the Ninth Circuit.

It is extremely important that you read both documents below, since they will provide you with unique and overwhelming proof the the U.S. Justice Department knowingly enforces the "income tax" in violation of law, while Federal judges, knowingly do the same thing.  More proof that organized crimes in the U.S. begin with the Federal government.

After I posted Judge George's "Permanent Injunction" Ruling, and my response to it; the Court sent me its related "Order," to which I subsequently responded.  In order to appreciate the full extent of the income tax hoax, I urge everybody to read all four documents.  There is really not that much to read, considering how clear these show that the government is the one scamming the American People.

Below is the first of 4 documents organized, first the government followed by my response, then the order and then my supplemental response in PDF format.

Case 2:03-cv-00281-LDG-RJJ Document 251 Filed 10/15/2008  Click for the PDF version.

Findings of Fact. Based on the evidence and the parties’ arguments, the Court finds as follows:

(1) Defendants Irwin Schiff and Cynthia Neun promote abusive tax schemes including Schiff’s “zero income” tax return scam, which incites and assists customers to file false federal income tax returns claiming they received zero income and owe zero taxes. The defendants promote their schemes through seminars, radio shows, and advertisements, and charge customers for products and services related to their abusive tax schemes;

(2) Schiff and Neun also have interfered with the administration of the internal revenue laws by appearing with customers at IRS appeals hearings and encouraging their customers to raise frivolous arguments, by inciting and assisting customers to file frivolous lawsuits and Tax Court petitions and by inciting and assisting customers to send frivolous correspondence and other documents to the IRS;

(3) Schiff and Neun and their Freedom Books associates and employees have continually and repeatedly prepared and filed federal income tax returns (IRS Forms 1040), falsely claiming that their customers have no taxable income based
on Schiff’s frivolous theories and arguments;

(4) The returns that Schiff and Neun and their associated entities have continually and repeatedly prepared are based on unrealistic positions, namely Schiff’s claims that paying taxes is voluntary and that wages and other income are not subject to taxation, and result in a gross understatement of their customers’ tax liability;

(5) Schiff and Neun knew or should have known that their representations regarding the “zero income” tax return scheme and the tax benefits to be derived from participation in their scheme are false because (1) the “zero income” tax return scheme is frivolous on its face, (2) there are numerous judicial decisions rejecting this and similar “zero income” schemes, (3) Schiff has been convicted twice of tax crimes for asserting these and similar arguments, (4) at least four people who followed Schiff’s program have been convicted of tax crimes, and (5) Schiff, individually and through Neun, and Freedom Books advertisements, holds himself out as an expert in tax law;
 
(6) Absent this permanent injunction, Schiff and Neun will continue to promote the abusive tax schemes;

(7) Schiff’s “zero income” tax return scheme and the “payment of income taxes is voluntary,” “there is no law requiring Americans to file tax returns or pay income taxes,” and “the income tax only applies to corporate profits” arguments on which the “zero income” tax return scheme is based, are frivolous and without merit; and

(8) The public is served by granting this injunction. This permanent injunction will help stem the spread of and protect the public from defendants’ fraudulent tax schemes. To the extent that any of the factual findings above can also be construed as legal
conclusions, the factual findings shall also serve as conclusions of law.

Conclusions of Law
The Court has jurisdiction over this action pursuant to 28 U.S.C. §§ 1340 and 1345, and 26 U.S.C. §§ 7402(a), 7407, and 7408. Based on the evidence presented by the United States and the defendants, the Court finds that Irwin Schiff and Cynthia Neun, individually and doing business as Freedom Books, www.paynoincometax.com, and www.ischiff.com, are engaging in conduct subject to penalty under 26 U.S.C. §§ 6694, 6695, 6700, and 6701. Accordingly, the court finds that Schiff and Neun, and their associated entities and websites should be
permanently enjoined under 26 U.S.C. §§ 7407, and 7408. The Court finds that the United States and the public will suffer irreparable harm in the absence of this permanent injunction and that Schiff and Neun will suffer little, if any, harm if the permanent injunction is granted. The United States has shown that Schiff’s and Neun’s tax positions are frivolous. Further, the United States has shown the public interest will be served through granting this permanent injunction.

Finally, the evidence presented by the United States and the defendants show that absent this permanent injunction, Schiff and Neun will continue to violate 26 U.S.C. §§ 6694, 6695, 6700, and 6701 and interfere with the enforcement of the internal revenue laws. Accordingly, the Court finds that a permanent injunction under 26 U.S.C.  § 7402 is necessary and appropriate for the enforcement of the internal revenue laws. Order Based on the foregoing factual findings and for good cause shown, the Court ORDERS that defendants Irwin Schiff and Cynthia Neun, individually and doing business as Freedom Books, www.paynoincometax.com, and www.ischiff.com, and their agents, servants, employees, attorneys, and those persons in active concert or participation with them who receive actual notice of this Order are permanently enjoined from:

(1) Engaging in activity subject to penalty under 26 U.S.C. § 6700, including organizing or selling a plan or arrangement and making a statement regarding the excludibility of income that they know or have reason to know is false or fraudulent as to any material matter;

(2) Engaging in activity subject to penalty under 26 U.S.C. § 6701, including preparing and/or assisting in the preparation of a document related to a matter material to the internal revenue laws that includes a position that they know will result in an understatement of tax liability;

(3) Making false or misleading statements when marketing or advertising any tax-related products or services, including books, videotapes, audiotapes, seminars, packages, and consultation sessions;

(4) Making any statements, whether written or oral, that, in light of the situation, are likely to incite others to imminently violate the law, including to evade the assessment, payment, and collection of taxes;

(5) Assisting or aiding others to violate the law, including to evade the assessment and payment of taxes, through any means, including through giving in-person advice, posting information on the Internet, or selling books, tapes, CDs, that instruct or explain how to fill out fraudulent or false tax returns or other documents to be filed with the IRS;

(6) Providing any tax advice or services for compensation, including providing consultative services, “witness” services, or other tax advice to, or purported representation of, customers;

(7) Engaging in other activity that hinders the enforcement of internal revenue laws, including instructing and assisting others to file frivolous lawsuits or to disrupt and impede IRS audits and IRS or judicial Collection Due Process Hearings;

(8) Preparing or assisting in the preparation of any federal income tax returns for any other person;

(9) Engaging in any conduct subject to penalty under 26 U.S.C. § 6694, i.e., preparing any part of a return or claim for refund that includes an unrealistic position;

(10) Engaging in any conduct subject to penalty under 26 U.S.C. § 6695, i.e., failing to sign and furnish the correct identifying number on tax returns that they prepare; and

(11) Engaging in any other activity subject to injunction or penalty under 26 U.S.C. §§ 7407, 6694 or 6695, including fraudulent or deceptive conduct that substantially interferes with the proper administration of the internal revenue laws; Further, pursuant to 26 U.S.C. § 7402, the Court ORDERS that, within ten days of the date of this order, Schiff and Neun must place this order, in its entirety, on the www.paynoincometax.com, and www.ischiff.com “Home” pages (i.e., the first page seen when accessing the websites at the listed addresses), prominently featured at the top so that it is easily visible and readable without further action. The defendants must also remove from their websites and others signs and advertising all information that violates this order, including false commercial speech, speech that violates 26 U.S.C. §§ 6700, and speech that assists or is likely to incite others to violate the law.

Further, that the United States be permitted to engage in post-injunction discovery to monitor Schiff’s and Neun’s compliance with this and any other order entered by this Court.

SO ORDERED this _______ day of _____________, 2008. _________________________________
LLOYD D. GEORGE Senior United States District Judge
Prepared by: s/MICHAEL J. ROESSNER MICHAEL J. ROESSNER Trial Attorney, Tax Division U.S. Department of Justice P.O. Box 7238 Washington, D.C. 20044 Telephone: (202) 305-3227 Attorney for Plaintiff United States

There is a five line quote on page 12 of my motion, that I say appears on page 2 of the Court's Order.  Actually it was in the Government's "Reply To My Objection To Its Motion For Summary Judgment." However in paragraphs (3) & (4) of page 2 of the Court's Order, Judge George says about the same thing.

Notice (page 5, last line) where Judge George talks about speech that is likely to "incite" others to violate the law. This is his attempt to  fraudulently bring material on my website into the following quote of Justice Brandies as contained in, Whitney v. Cal., 274 U.S. 357, 376.

Even advocacy of [law] violation, however reprehensible morally, is not a justification for denying free speech where the advocacy falls short of incitement and there is nothing to indicate that the advocacy would be immediately acted on.

So Brandies points out that even advocating violations of law is protected speech. Only when the speech might incite others to immediately break the law - like inciting a mob to storm a jail and drag the prisoner out for a lunching - is such speech not protected. Does anyone believe that someone who has paid taxes all his life (and overlooking all my warnings and disclaimers) is going to read something on my web site an immediately run out and break the law? So how can Judge George believe he can legally censor anything on my website?

But remember we are now dealing with the Federal Mafia and my website may be in danger, so download and save as much material as you can.

The following is my motion to stay the permanent injunction:

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEVADA UNITED STATES,  v. IRWIN SCHIFF & CYNTHIA Plaintiff, NEUN,
) Defendants

Civil No. Motion for Permanent CV-S-03-0281-LDG-RJJ Motion for stay of the Permanent Injunction

Pursuant to Rule 18 (0) (1) of the Fed. Rules of Appellate Procedure permanent injunction issued defendant Schiff moves for a stay of the by this Court on October 14, 2008 pending review of its Order by the Ninth Circuit, for the following reasons.

The Court Gave No Reason Why the Government Was Entitled to a Summary Judgment and Indeed the Government Was Not Entitled To One Because the practical result of applying the summary judgment is to deprive the party against whom judgment is granted of a trial in the usual course, the remedy is a drastic one that should be used with great caution. Schuck v. Motefiore, 2001 ND 93, 626 N.W.2d 698. Although summary judgment saves time, effort, and expense by avoiding a full trial I under certain circumstances, those savings may not be gained at the expense of denying a litigant the right of trial if there is a genuine issue of material fact to be litigated. Iannelli v. Burger King Corp. , 761 A.2d 417 (N.H. 2000).

Because a summary judgment proceeding is a drastic remedy, strict compliance with the applicable rule is required (U.S. v. Bosurgi, 530 F.2d 1105; Parmedmelee v. Chicago Eye Shiel Co., 157 F.2d 582, 168 A.L.R. 1130 (C.C.A. 8th Cir. 1946), and this is so whether or not the opposing affidavits are sufficient. Manchester Memorial Hospital v. Whitney, 6 Conn. Cit. Ct. Ct. 212, 269 A.2d 300

(App Div 1969).  Rule 56 provides that summary judgment "should be rendered if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law."

Rule 56 of the Fed. R. Civ. P also provides that supporting and opposing affidavits in a summary judgment proceeding shall be made on personal knowledge. In this case the Government in seeking summary judgment submitted no affidavits while the defendant submitted a 66 page sworn statement (plus 31 pages of the Government's answers to Admissions and Interrogatories plus 9 other relevant Exhibits) opposing the Government's request for summary judgment. In addition, on the basis of the Government's answers and non-answers to discovery requests, defendant Schiff filed a sworn statement of "Uncontested Issues of Fact" which the Government did not contest and which the Court in its Order did not contest, let alone refute.

Defendant's sworn "Uncontested Issues of fact" (which the Court could verify based on the Government's discovery answers which were attached to Schiff's 66 page Objection to the Government's Motion for summary judgment) stated, the following as being "Uncontested Issues of Fact" in this litigation:

1) There is no statute in the Internal Revenue Code that specifically makes persons "liable" for an "income" tax.

2) When the United States uses the term "income" in this litigation, it uses the term in its ordinary, every day sense, and does not use the term in its "constitutional" sense.
 
3) When the United States uses the term "income" in this litigation, it does not separate such income from its sources, but alleges that the sources themselves are subject to an "income" tax.
 
4) The United States cannot identify how and in what manner "The Federal Mafia" advises people to file "false and fraudulent" W-4's.

5) The United States cannot quote (giving the page number) any statement in "The Federal Mafia" that is "false and Fraudulent."

6) The United States cannot quote any statement as contained in a 'zero" return that is "false and fraudulent."

7) The United States cannot cite any statute in the the Internal Revenue Code which authorizes the IRS Commissioner (or the-IRS) to enforce and administer a federal "income" tax.
 
8) The United States cannot produce a delegation order from the Secretary of the Treasury to the Commissioner of the IRS delegating him with the authority to enforce and administer an "income" tax which was published in the Federal Register.

All of the above, sworn to facts, supported by the government's answers, and non answers to discovery questions, had to be held as true by this 
Court. Instead, the Court simply ignored these uncontested facts when it unlawfully granted the Government a summary judgment.

-A-
Legal Issues

Facts asserted by a party opposing a summary judgment motion, and supported by affidavits or other evidentiary material must be regarded as true. Anderson p. Liberty Lobby, Inc.,477 US 242, 106 S. Ct. 2505, 91 L. Ed. 2d 202, 4 Fed. R. Servo 3rd 1041 (1986); Van Houten Svc.v Shell Oil, 417 F. Supp. 523 (D.N.J. 1975), aff'd 546 F.2d 421 (3rd Cir 1976); Dobson v. Harrise, 352 N.C. 77, 530 S.E. 2d 829 (2000). In deciding on motion for summary judgment, all factual disputes (Gen. Elec. V. Joiner,522 US 136, 118 S. Ct. 512, 139 L. Ed. 2nd 508, 48 Fed. R. Evidence. Service 1 (1997).) and justifiable or reasonable inferences are to be resolved favorably for the non moving party and against the moving party. Hunt v. Cromartie, 526 US 541, 119 S Ct. 1545, 143 L. Ep. 2d 731 (1999); Grayson v. McGowan , 1543 F.2d 79 (9th Cir. 1976; Quinn, V. Syracuse Model Corp. , 613 F. 2d 438 II (2d Cir. 1980).

Affidavits of the moving party for summary judgment (not submitted /in this case) should be strictly construed, while those of the opponent .should be liberally construed. Hatch v. Bush, 215 Cal.. App. 2d 692, 30 Cal. Rptr. 397 13 A.L.R. 3rd 503 (1st Dist. 1963).

Also a court hearing a motion for summary judgment must construe all the pleadings, liberally in favor of the party against whom the motion is made. First Bank of Chicago v. Pendell, 651 F. 2d 419 (5th Cir. 1981), In addition, all doubt and all favorable inferences that may be reasonably drawn .from the evidence will be resolved against a party moving for a summary judgment, (Deshazer v. Tompkins, 89 Idaho 347, 404 P.2d 604 (1965); Breen v. Peck, 28 N.J. 351, 146 A.2d 665, 73 A.L.R. 2d 390 (1958), ruling that in determining the right to a summary judgment, all doubts must be resolved against the moving party.), and the evidence and inferences will be viewed in the light most favorable to the party opposing the motion. Aka v. Jefferson Hosp, 344 Ark. 627, 42 S.W. 3d 508(2001); Appleton v. Board of Educ. Town of Stonington , 254 Conn. 205,757 A.2d 1059, 146 Ed. Law Rep. 1097 (2000).

The appellate court, as well as the trial court, must view the record on summary judgment in the light most favorable to the party against whom the judgment is rendered. Stanturf v. Sipes, 447 S.W.2d 558, 35 A.L.R. 3rd 834 (Mo 1969)

In addition, the mere fact that this Court awarded the Government a preliminary injunction does not constitute final adjudication of the ultimate rights in controversy. Shoemaker v. County of Los Angeles, 37 Cal. App. 4th 618, 43 Cal. rptr. 2d 774, 102 Ed. Law Rep. 259 (2d. Dist. 1995).

Whether a preliminary injunction is granted or denied has no effect on whether a final, permanent injunction will ultimately be issued. Berger By and Through Berger West Jefferson Hill School Dist., 669 A. 2d 1084, that issue must be resolved at trial; Gambar Enterprises, Inc. v. Kelly Services, 69 A.S 2d 297, 418 N.Y.S. 2d 818 (4th Dep't 1979).

The findings of fact and conclusions of law made in a preliminary injunction do not preclude the reexamination of the merits at a subsequent trial; the parties are free to offer additional evidence, and the court can come to opposite conclusions. Irish Lesbian & Gay Organization v. Giuliani, 143 F. 3d 638(2d Cir. 1998);  Electronic Design & Mfg. v. Konopka, 272 Ill. App. 3d 410 208 Jll.  Dec. 563, 649 N.E.2d 619 (1st Dist 1995; Toho Co. Ltd v. William Morrow & Co., Inc, 33 F. Supp 2d 1206 46 U.S.P.Q. 2d (BNA) 1801 (C.O. Cal. 1998).

A final and permanent injunction can be granted only following a final hearing on the merits. U.S. v. Baltimore & ' O.R. Co 225 u.s. 306, 32 S. Ct. 817, 56L. Ed 1100 (Comm. Ct. 1912); Plummer v. Am. Inst. of C.P.A.'s, 97 F. 3rd 220 (7th Cit. 1996)
 
In addition the Court failed to mention in its decision that the injunction is being awarded to the Government on the basis of a summary judgment; nor does the Court explain why the Government was entitled to a summary judgment, and why the defendants -whose First Amendment rights were being abridged -were not entitled to a trial on the merits. In addition, unlike the litigation that led to the preliminary injunction, in connection with the permanent injunction, the defendants got discovery, which led to the following factual revelations.

1) The Government could not identify any law that specifically made persons "liable" for income taxes. (As fully covered in pages 8-12 in Schiff's Response to the Government's Motion for Summary Judgment, here and after referred to as SR)
 
2) The Government could not identify any law that fell into Subtitle A (the Subtitle dealing with income taxes) that required persons "to pay" income taxes. (Pages 12-13 of SR)

3) The Government admitted to not knowing the legal meaning of "income." (pages 13-17 of SR)

4) The Government could not explain in what way "The Federal Mafia" advises people to file false W-4's. (Pages 17-23 of SR)

5) The Government could not identify any statement in "The Federal Mafia" that was either "false or fraudulent." (See pages 23-27 of SR)

6) The Government admitted (by default) that compliance with income tax statutes is voluntary. In order to avoid admitting that the income tax is based on voluntary compliance and not on twice compulsory compliance, the Government claimed, among other things, that it did not know the difference between "voluntary compliance" and "compulsory compliance." (See pages 27-34 of SR)

7) By failing to deny two relevant Admissions, the Government in fact admitted that the IRS has no statutory authority to enforce the Federal income tax. (See pages 35-36 of SR)

8) The Government could not identify one statement in "The Federal Mafia" that is false. (See pages 36-42 of SR) Therefore, not only did the Court disregard all of the material and significant revelations revealed in the Government's answers to discovery requests (which should have resulted in the Court's giving summary judgment to defendants, and not the other way around (l), but the Court also disregarded all the provisions of Rule 56 and all of the case law cited above, as well as all the factual claims established by defendants (which went un-refuted by the United States), illegally resolved every factual issue which it either ignored or mis­represented -in favor of the Government. In addition as shown below, the Court based its injunction on facts that it had to know were false.

1. "Under Fed. R. Civ. P. 56, a court may grant summary judgment in favor of a party that did not request it, but only upon proper notice to the adverse party." ; citing, Daniels v. McKay Machine, 607 F.2d 771 (7th Cir 1979); and Snelwar v. Snelwar, 27 Misc. 2d 933, 212 N.Y.S.2d 882 (Sup 1961).As quoted in Am. Jur. Vol 73 " 61. Defendants did not seek a summary judgment, since they believed a trial on the merits was in the public's interest.

It is clear from all of the above, and the First Amendment issue involved, defendants were entitled to a trial in which to cross-examine Government witnesses. This is further clearly established in "American Jurisprudence 2d", Vol. 42 t1 264 which states:
An application for a permanent injunction is determined on the merits only after a full evidentiary trial, (70 ) even though the hearing on the proceedings to obtain a preliminary injunction may touch upon or tentatively decide merit-issues. (71)
 
Caution: The court may grant a permanent injunction without a trial on merits if there are no material issues of fact and the issues of law have been correctly resolved. (72)

Whether a preliminary injunction is granted or denied has no effect on whether a final, permanent injunction will ultimately be issued; that issue must he resolved at the trial, at which parties are free to offer additional evidence and the court .may come to different conclusions. (73)
Emphasis added and numerous citings omitted

Since numerous material issues of fact needed to be resolved (if the Court ? didn't believe they had already been resolved against the Government), they were required to be resolved at trial. Since they were not resolved at trial, the Court's Order of October 14, 2008 is actually a nullity.

 -II­
The Preliminary v. the Permanent Injunction

Undoubtedly the Government's inability (as revealed through its answers to discovery questions) to identify in what way "The Federal Mafia" advises people to file "false and fraudulent" W-4's and false income tax returns did have an impact on the claims contained in the permanent injunction in contrast to those contained in the preliminary injunction. For example: On page 5 of the preliminary injunction the court claimed. that:

Schiff identifies The Federal Mafia as the starting point of his program  "It shows you how to file the zero return stop wage withholding, and explains the basics."...Schiff also advertises his program (2), and states that services on the internet through testimonials, some of which identify only The Federal Mafia as the resource for avoiding paying taxes. The Federal Mafia is priced at $38.00
I
Indeed, The Federal Mafia was considered so fundamental to Schiff's "fraudulent tax: schemes" that the book was mentioned 47 times in the Court's preliminary injunction; while the preliminary injunction also accused Schiff of advising people to file false W-4's, so as to wrongfully stop having taxes taken from their pay. This accusation  appears approximately 12 times in the preliminary injunction. However, there is no mention of The Federal Mafia in the permanent injunction, and no accusation that Schiff advises anyone to file false W-4's. So~ obviously, such references and such charges were erroneously contained in the preliminary injunction.

-III ­
The Permanent Injunction Contains Patently False Claims

-A-
Contrary To the Court's Claim

It's Permanent Injunction Was Not Based On Any "Evidence"

On page 3 of its Injunction Order the Court writes, under the caption, "Conclusions of Law" the following.• Based on the evidence presented by the United States and te defendants, the Court finds that Irwin Schiff and Cynthla Neun, individually and doing business as Freedom Books, www.paynoincometax.com, and www.ischiff.com, are engaging in conduct subject to penalty under 26 U.S.C. §§6694, 6695,6700 and 6700. Accordingly, the court finds that Schiff and Cynthia Neun and their associated entities and websites should be permanently enjoined under 26 U.S.C. §§ 7407, 7408.

The Court finds that the United States and the public will suffer irreparable harm in the absence of this permanent. injunction and that Schiff and Neun will suffer little, if any harm, lf the permanent injunction is granted. The United States has shown the public interest will be served through granting this permanent injunction. Finally the evidence presented by the United States and the defendants show that absent this permanent injunction, Schiff and Neun will continue to violate 26 U.S.C. §§ 6694, 6695, 6700, and 6701 and interfere with the enforcement of the internal revenue laws. Accordingly, the Court finds that a permanent injunction under 26 U.S.C. § 7402 is necessary and appropriate for the enforcement of the internal revenue laws.

First of all, though the Court twice states that it is basing its Order on "evidence presented by the United States,". The United States presented no evidence' whatsoever in this litigation. "American Jurisprudence 2nd" defines evidence in Vol. 29 ¶1 as follows:

1. Nature and definition of evidence

Evidence is matter that makes clear the truth of fact, persuades a court of the existence of fact, or produces a just conviction of truth. It is further defined as any species of proof legally presented at trial through the medium of witnesses, records, documents, exhibits, and concrete objects for the purpose of inducing belief in the minds of the court or jury. The word "evidence" thus includes all the means by which any fact in dispute at a judicial trial is established or disproved. Any circumstance which affords an inference as to whether the matter alleged is true or false is therefore evidence, and is commonly understood to be within the meaning of that term.

Further on "Am Jur." states, in relevant part.

3. Requirement that matter be received· in court

Matter which was not introduced or presented as evidence at trial does not come within the commonly accepted definition of "evidence."  In this regard, neither testimony nor physical objects are evidence unless they are produced, introduced, and received in a trial.
Because evidence is matter, Which has actually been presented at trial, facts obtained through the use of discovery devices, such as written interrogatories, are not themselves evidence. They may, however, become evidence by introduction as such at the trial of the matter. (Footnotes and supporting court decisions omitted)
,
From the above, it is pretty clear that the Court I s Order was not based on any "evidence presented by the United States and the defendants." Its Order was obviously based on the Court I s partisanship in favor of the Government, and by its own preconceived, erroneously held, understanding of our revenue laws and by refusal to be bound by relevant Supreme Court decisions and House and Senate Reports.
 

-B-
Contrary to the Court's Claim Schiff and Neun Are Not "Doing Business as Freedom Books"

In case it has escaped the Court's attention, Schiff would respectfully remind the Court that both Schiff and Neun have been Federally incarcerated for over three years and its against prison policy (if not against the law, for Federal prisoners to conduct any business whatsoever while incarcerated. If the warden of this facility thought for a moment that I was conducting a business, he would put me in solitary and take away other privileges, such as: denying me II phone privileges, visiting privileges, and commissary privileges.

Neither Schiff nor Freedom Books has a bank account, phone number or address, other than where he is confined. The building where Freedom Books was located was sold, and all of Schiff's records were put in storage.

Even Freedom Books old phone number (which appears in thousands of books published by Freedom Books) was taken by another party, so calls to that number go to that party and not to Freedom Books. The people who Schiff and Neun can call are limited to 30 people, and they have to be approved as do those on their visiting list. Neither Schiff nor Neun have spoken to each other in over 3 years. Based on all of the above, how can Schiff and Neun, "individually and doing business as Freedom Books ...be... engaging in conduct subject to penalty under 26 U.S.C. §§ 6694, 6695,6700 and 6701."?

Obviously §§ 6694, 6695, 6700 and 6700 could only apply if Schiff and Neun were "doing business as Freedom Books" -but since they obviously are not (and would be in solitary if they were) the Court egregiously creates a "business" where one could not possibly exist and then proceeds to fraudulently apply the law where it cannot possibly apply.

-C-
The Defendants Are Not Engaged In "Commercial Speech"

The Court granted the Government a preliminary injunction largely on the basis that the defendants were involved in "false commercial speech." This Court devoted pages 14 to 20 to this claim alone, in its' preliminary injunction while I referring to the 'charge in other parts of the injunction. Some II excerpts from these pages are, as follows:

A.. Commercial Speech Aspects of the Scheme
Promoter's statement regarding the tax benefits of his [ abusive tax schemes]

constitute commercial speech..• As previously discussed, Schiff's enterprise advertises and sells books, tapes and other products over the internet, and through Freedom Books, his store in Las Vegas, Nevada, and other avenues promote his scheme. Schiff also advertises and markets seminars and workshops to instruck attendees on how anyone can implement his formulas for avoiding payment of taxes.

As part of the scheme, Schiff offers for sale letter-writing services and "personal consults." He holds himself out as a "tax con­sultant," With experience and background in fields· related to taxation. Definitely, the portions of the scheme that would be considered "core" commercial speech i.e. that speech which proposes no more than a commercial transaction, may be enjoined if they are deceptive or misleading. (2)

Since Schiff does not sell anything, advertise anything, put on seminars or do consulting, does not have an office, phone, bank account, or address other than his prison address), it is patently absurd for the Court to claim that Schiff is currently, doing business" or engaging in "commercial speech" on any basis.

2. Of course, nothing that Schiff ever wrote or said, constituted false commercial speech or constituted an abusive tax shelter. Schiff's written and stated tax opinions merely reflected what was in the laws themselves, which were enacted to conform to the Constitution and Supreme Court decisions. Schiff did not have to devise "formulas" and "tax shelters" to avoid the payment of income taxes: the laws themselves -largely unknown to the American public -did it.

As far as Schiff engaging in false commercial speech is concerned, this is what the 38 page criticism that appeared in the January, 1986 Seton Hall University School of Law "law Review" had to say about the matter -in connection with the preliminary injunction and its sustaining Ninth Circuit decision:

"'The Federal Mafia' so convincingly criticizes the practices of the government of the United States, that the government has regulated Schiff's book under the guise of protecting the public from deceptive commercial speech, rather then providing Schiff's speech with the full First Amendment protection it deserves!' (Page 589)

Therefore, there cannot be any "Commercial Speech Aspects of the (alleged) Scheme" as captioned in the Court's injunction. Therefore, there cannot be any commercial speech or : abusive tax shelter to enjoin, which were the alleged reasons for the Court granting the preliminary injunction.

-D-
The Court In Its Order Knowingly and Egregiously Misrepresented
Why Schiff Claimed People Could Claim "Zero Income" Regardless Of How Much Ordinary Income They Might Have

On page 2 of its Order the Court writes:
Defendants Schemes are based on the false premise that income earned by individuals is not subject to federal income taxes. Defendants refer to this business as the "zero income" scheme because they falsely advise their customers that "[fJor income tax purposes, you can legally report ,zero' income and pay no income taxes regardless of how much you might have earned."

 
First of all, defendants have never referred to their position with respect to reporting "zero income" as a "scheme." Defendant's have always claimed that in reporting "zero Income" people were following the law. Its the Government and its courts who have referred to this as a "scheme," hoping, in this manner, to continue misleading the public as to what "income" means in our revenue laws.

When Schiff (and others) report "zero income" on their tax returns they explain that they do so because: 1. "income" is not defined in the Internal Revenue Code (citing Conner v. US, 303 F. Sup. 1187,1189; and US v. Ballard, 535 F.2d 400,404); while 2. "income" is defined by the Supreme Court in Merchant Loan Trust vs. Smietanka, 255 US 509 as, having "the same meaning in all of the Income, Tax Acts of Congress that was given to it in the Corporation Excise Tax Act of 1909." So the Supreme Court held that "income" in our revenue laws was synonymous with corporate profit.

In addition, Schiff included his Response excerpts from House Report 1337 and Senate Report 1622 (83rd Congress, 2d Session), which was issued by Congress in 1954, along with the 1954 Code~ Congress stated in those Reports that "income" was used in the 1954 Code in its "constitutional sense," which does not mean in its ordinary sense, which is how the Court and the Government obviously and erroneously use the term. When I asked the Government in discovery to admit that Justice Department lawyers always calculate income in the "ordinary sense, "and not in its "constitutional sense," the Government claimed it was "uncertain as to what Schiff means when he uses the phrases 'Constitutional sense' and 'ordinary sense,'" as they relate to taxable income; proving, that in both civil and criminal litigation, the U.S. Department of Justice is always fraudulently attributing income to those it prosecutes and to those whose property it: seeks to confiscate In addition, Schiff attached, as Exhibit D, page 637 from the 1895 Pollock decision, 158 US 601, in which the Supreme Court held that a tax on income from real, and personal property (i.e. dividends, interest, rent, wages) could only be constitutionally taxed if the tax were apportioned.

Schiff also attached as Exhibit E an excerpt from "Shepard's Citations" showing that the Pollock decision -the 16th Amendment not withstanding -has never been reversed or overturned, and so remains good law even today. In addition, Schiff attached as Exhibit G. a recent page excerpt from the "Digest of the United States Supreme Court Reports." Three Supreme Court cases were cited in that excerpt as holding that the whole purpose of the 16th Amendment " ...was to exclude the source from which a taxed income was derived." Those cases were: Brushaber v. Union Pacific RR.,' 240 U.S. 1, Stanton v. Baltic Mining Co.; 240 U.S.l03; and Tyee Realty Co. v. Anderson, 240 US 115. As shown on pages 47 -49, at the preliminary hearing all three of Schiff's witnesses testified that when they reported "zero" income they were reporting their income in the "constitutional sense," and the Government's attorney did not even challenge them on this.

Therefore, on page 49 of his Response Brief Schiff asked the Court to explain the meaning it gave to the term "income" when it used it in its Ruling: would it be using the term in its" ordinary sense" or in its Schiff then reminded the Court ...."constitutional sense"?

If the Court is silent on the matter, then I would remind the Court that it has been held that: "Silence can be equated with fraud where there is a legal or moral duty to speak, where an inquiry left unanswered would be intentionally misleading. (US v. Tweel, SSO F.2d 297,299; quoting US v. Prudden, 424 F.2d 1021 (5th Cir.) The Court was silent on the matter. Why? Why in its "Findings of Fact" and "Conclusions of Law" -didn't the Court rule that Schiff's reliance on all these Supreme Court cases and Congressional Reports was misplaced? Indeed,
the Court in its Ruling does not even mention this relevant case law and Congressional Reports.

-E-
The Court Misstates Schiff's. Claim Concerning the Voluntary Nature of the Income Tax While It Ignores the Government's Fraudulent Responses On This Issue

On page 2 paragraph 4 of its Order, the Court writes: The returns that Schiff and Neun and their associated entities (3) have continually and repeatedly prepared are based on unrealistic positions namely Schiff's claims that paying income taxes is voluntary and that' wages and other income are not subject to taxation, and result in gross understatement of their customer's tax liability.

3. Schiff and Neun have no "associated entities" and 99% of all the "zero" returns filed; were prepared by the filers themselves and neither Schiff nor Neun had anything to do with them.

4. Such as:

1) Income from real and personal property can only be taxed on the basis of apportionment

2) pursuant to the 16th Amendment, income must be separated from its sources, if it is to avoid apportionment; and

3) only income received in the "constitutional sense" is taxable under our revenue laws.

'Where the Court refers to Schiff's claim "that paying income tax is voluntary," the Court would lead the readers of its Order to believe that Schiff's claim originated in Schiff's own irrational and demented mind. The Court's order does not mention that Schiff supported his claim with a least a dozen Government documents and published state­ments of IRS officials which all said the same thing. For example:
I
The IRS's own "mission statement" states its mission is to promote "voluntary compliance." A high School teaching syllabus stated that the income tax was based on "voluntary compliance" no less than three times. Former [RS Commissioner Jerome Kurtz, stated no less than six time in the 1979 IRS "Annual Report" that people pay income taxes "voluntarily." I even provided the Court with an excerpt from a the  Hearing Report of a Subcommittee of the House Ways and Means Committee in which the then head of the Alcohol and Tobacco Division of the IRS (Dwight E. Davis) testified that "Your income tax is 100% voluntary, and your ,liquor tax is 100% enforced. Now, the situation is as different as day and night."

Then Schiff asked the Court: "What could Mr. Avis possibly have meant to convey by this comparison?"  in addition, Schiff provided the Court with additional documents, such as a page from one of the most 'authoritative books on the income tax; Michael Saltzman's book, "IRS Practice and Procedure." On page 13.01 Mr. Saltzman states: "The internal Revenue laws are based on the premise taxpayers will voluntarily confess (5) and report and pay the correct amount of their tax liability." (Emphasis added).

In addition, Schiff included a page from the decision in In Re Schmitt, 140 B.R. 571 (1992) in which the Court wrote in its decision, "Our income tax system is voluntary and the Internal Revenue Service must perforce rely on self-assessment of the taxpayer."

5. Mr. Saltzman correctly identifies what a taxpayer files: it is a "confession," not a "return." But he is still confused on the issue of "liability."

In addition, Schiff supplied the Court with a page from the ,IRS' "Penalty Handbook," that stated no less than 11 times, that the income tax is either "voluntary" or based on "voluntary compliance." In addition, during discovery, Schiff asked the Government to admit that while the IRS claims that income tax is based on "voluntary compliance" the IRS "never claims (it) is based on 'compulsory compliance'" Instead of simply denying the admission, if it were not true, the Government (to avoid answering truthfully) raised contrived objections to the admission and then said, "the United States is uncertain as to what Schiff means when he uses the phrases 'voluntary compliance' and 'compulsory compliance.'"

In another Admission Schiff asked the Government to admit, that: "If the English language is properly interpreted, there has to be a difference between "voluntary compliance' and 'compulsory compliance'?"

Can there be any conceivable reason that that Admission could .not be admitted? However, the Government refused to answer the Admission and again stated: "The United States is uncertain as to what Schiff means when he uses the phrases 'voluntary compliance' and 'compulsory· compliance."

Thus on this issue Schiff provided the Court with a number of IRS documents and statements of responsible officials that compliance with income tax statutes was voluntary. The Government, on the other hand, provided no contrary documents - all the Government provided were obviously disingenuous answers to discovery questions. At trial, it would have been interesting to have a Government witness explain, why, if the income tax is based on compulsory compliance, do all these Government documents and informed people say that it is voluntary?

In any case, whether compliance with income tax statutes was voluntary or compulsory was a contested issue of fact. It was an abuse of discretion for the Court to resolve this issue in favor of the Government

-F-
The Court Had No Jurisdiction to Hear This Matter Because It Was Unable To Identify the Statute That Made Persons "Liable" For Income Taxes

Obviously, the Court can have no jurisdiction to enjoin anyone from doing anything in connection with an alleged tax for which no statute makes anyone "liable." On page 49 of his Response Brief Schiff reminded the Court, "Since the Government could not identify any statute during discovery" that made persons "liable for income taxes, it was incumbent for the Court to do so, if the Court claims that such a statute exists." However, the Court did not do so. This is another factual question in dispute. Schiff claims that no statute exists that make persons "liable" for income taxes, and neither the Government in response to discovery, nor the Court in its Order could identify any such statute. Therefore, it was again an abuse of the Court's discretion for the Court to resolve this contested issue in favor of the Government.

-G-
This Court Is Barred By the Rules of Equity From Granting Equity Relief. To the United States Since It Comes To Court With "Unclean Hands"

As pointed out in Schiff's" Response to the Government's Opposition that the Court Impose Sanctions On the Government" (For its having fabricated an answer as to why it couldn't answer the Admission here discussed) and in his Response Brief (at pages 54-56); Schiff pointed out that , Robert Wesley, a witness at the hearing held in connection with the preliminary injunction testified that his employer (the State of California) honored his "exempt" W-4 from 1998 until January of 2003, when the IRS notified his employer to cease honoring it.

In addition, Schiff supplied the Court with an affidavit of Howard OIlman which certified that: the IRS sent a "letter to my employer, the United States Postal Service, informing them that the Internal Revenue Service had determined' that my W-4 was incorrect, and that it does not conform with the requirements of ... section 26 USC 3402' and that my employer was to 'disregard' my W-4 and 'withhold taxes as if I were single claiming 1 withholding allowance.

Because of that letter, Mr. OIlman was denied his right to not having withholding taxes taken from his pay, as provided by 3402(n). In its "Opposition to Defendant Schiff's Motion To Impose Sanctions and Compel Discovery Responses" the Government admitted that no law allowed the IRS to send out such letters, and by implication, allows the IRS to interfere with our revenue laws in this manner. It is hornbook law that a party seeking equity relief must come to court with "clean hands." Both in Schiff's ."Response to the Government's Opposition to Sanctions" and in his Response to the Government's Motion for Summary Judgment, Schiff pointed out that The United States further admits (in relevant part) that:

To demonstrate the necessity for an injunction ... the United States must demonstrate ... that Schiff interferes with the administration of the internal revenue laws.
I
-Then Schiff went on to point out:
This actor, of course, is an attempt by the United States to seek injunctive relief and in any such equitable action, it is fundamental that the United States must cOOle into court with "clean hands." And where a party seeking an injunction has committed acts similar to those explained of, the court should leave the parties where it finds them and deny injunctive relief. Edward Thompson Co. v. American Law Book 122 F. 922 (C.C.A. 2d Cir. 1903); Weegham v. Killifer, 215 F. 289 (C.C.A. 6th Cir. 1914; 110 Oil Indiana Natural Gas &Oil Co, 174 Ind. 635, 92 N.E. 1 (1910.

Then Schiff went on to point out:
So here have the United States seeking to enjoin Defendants from 'interfering with the administration of the. revenue laws ... (even though) the United States has already admitted that the IRS does interfere with with the administration of the internal revenue laws by blatantly interfering with the public's right to claim "exempt" from withholding pursuant to 26 USC 3402(n)...Therefore, just on this issue issue alone, the United States is not entitled to injunctive relief.

Even though Schiff twice raised this issue in his pleadings, the Court refused to address it. Even if Schiff were wrong, it was incumbent upon the Court to address the issue in its "Findings of Fact and Conclusions of Law." The fact that the Court did not do so, raises serious questions regarding the Court's impartiality.

-H-
With Respect To Schiff's Website In its final paragraph, the Court states:

The defendants must also remove from their websites and other signs and advertising all information that violates this order, including false commercial speech, speech that violates 26 U.S.C. §§ 6700, and speech that assists or is likely to incite others to violate the law.

First of all, Schiff does not sell anything, and nothing on his website is for sale, therefore Schiff cannot be engaged in commercial speech". There are books on Schiff's website that can be downloaded free of charge. What Schiff has posted to his website is his understanding of the revenue laws and why he believes his current incarceration is illegal as well the trial that put him there. According to Schiff's understanding of the First Amendment, such speech is supposedly protected under that Amendment.

Schiff has also posted to his website numerous motions that he  submitted to the Court in connection with his criminal trial. He has also posted Government responses to those Motions along with Magistrate Leavitt's recommendation's to the Court, showing that the Government contested Schiff's argument while Magistrate Leavitt rejected them.

As a federal prisoner Schiff has no access to the internet, and has not seen his website in over three years. However, the Government in its "Renewed Motion for Summary Judgment" provided Schiff with extensive excerpts from his website but which only constituted a small portion of .the website, since it included none of the legal pleadings and the Recommendations of Magistrate Leavitt.

The following are excerpts from the pages supplied to Schiff by the Government.

(6) For example, on page 27 of 36 Schiff's website states: with respect to his four motions to dismiss: "Naturally the government disagreed with all four of my conclusions (and on) October 8, 2004 the Government filed its answer opposing my (four motions.) Click here to read its Response. On November 23, 2004 I filed my reply to the Government's Response. By clicking here you an read my Response. On December 3, 2004 U.S. Magistrate Judge Lawrence R. (Leavitt filed his) 'Report" recommending that U.S. District Court Judge, Kent J. (Dawson deny) my four motions to dismiss. Please read U.S. Magistrate Judge (Leavitt's) Report and my Reply.

Read my Motion to Suppress all of the alleged evidence the Government confiscated from Freedom Books on Feb. 11, 2003... On December 21 2004, U.S. Magistrate Leavitt filed his ''Report'' contesting my claim and recommending that Judge Dawson deny my (Motion to) Suppress. To read my reply to his report, click here.

6. Since portions of the wording (largely the ends of a line) are cut off, Schiff guessed what the words were and enclosed them in brackets.

on page 31 of 36 we find the following:
in addition I have also posted three ''Reports and Recommendations" from U.S. Magistrate Judge Lawrence R. Leavitt Who argues (that my) views on these issues are dead wrong.

Therefore, in view of all these official, legal voices all explaining (on my website) -why my views on income taxes are dead wrong, how can anyone be misled by me?

I urge everyone I to read all of the pleadings now posted to this website by. U.S. attorneys and the court all claiming that my understanding of our income tax laws is dead wrong. (More such pleadings and documents will be posted to this website as they become available;) therefore, I urge everyone to: (1) check out the Internal Revenue Code itself; (2) consult with your lawyer and/or accountant concerning all material contained on this website and anything I might have said about income taxes; and (3) ask the IRS itself. before (you rely) ,on anything I might have said or written in connection with income (taxes),

And further on page 32 of 36 Remember, all federal judges and U.S. attorneys maintain that what I say about income taxes is dead wrong, and in many cases even constitute tax evasion. I, of course, do not agree with them and I would never advocate violations of law -which is why I sell (the Code and its) implementing regulations. However, I may even be "delusional" (so don't) take my word for anything, without checking out all of the (underlying laws) and what the IRS, the DOJ and the courts have to say about it.

Therefore my website warns the public that they are to take nothing on my web site as being the law; that the courts and the DOJ claim that all my views on the income tax are Dead Wrong, and might even constitute tax evasion.  In addition, my website makes it clear that I am in prison because of my income tax views, and that I may even be delusional, so in what way can my website "incite others to violate the law."

Now, having said all the above, Schiff still believes that his understanding of tax law is correct, and that the Government (with the held of its courts) is enforcing the revenue laws un-Constitutionally, and in violation of the revenue statutes themselves -as the Government's responses (and non-responses) to discovery questions make abundantly clear. Certainly the First Amendment gives an American the right to argue that the Government is acting illegally and unconstitutionally, and such argument has nothing to do with "commercial speech" or the promotion, of an "abusive tax shelter"

As stated in the Seton Hall Law School "Law Review's" critical analysis of the preliminary injunction (which wa~ incorporated in . Schiff "s Response but totally ignored by the Court) : At pages 554-555.

Political speech, including criticism of the government, occupies the core of the protection afforded by the First Amendment. As the court in Mills v. Alabama ( 384 U.S. 214 (1966) stated:
Whatever differences may exist about interpretations of the First Amendment there is practically universal agreement that a major purpose of that Amendment was to protect free discussion of governmental affairs.

Most importantly, the right to criticize the government is "the heart of what the First Amendment is meant to protect" (McConnell v. Fed. Election Commission, 540 U.S)93, 248 (Scalia, J., concurring in part and dissenting in part)

Based on all of the above, there is nothing on Schiff's web site that reflects his views that he does not believe is is true and correct.  He also does not believe that there is anything on his web site -that will "incite" anyone to "violate" the law. There are enough disclaimers and warnings on his web site to force anyone to do a lot of independent research before they acted on any information contained on his website. However, if the U.S. attorney or the Court believes there is something on Schiff's web site that is in violation of the Court's order, if they tell me what it is; why it is false, and why it violates the court's order; I will see that it gets removed from the web site.

In any case, Schiff is moving the Court -based on all of the above ­ to stay its Order pending review by the Ninth Circuit. Dated: 11/23/2008 Respectfully submitted Irwin Schiff, pro se

(1) There are only two quotes from this 38 page critique of the preliminary injunction.The critique contained 328 footnotes, approximately half of Which referenced court decisions which the author believed buttressed her conclusion that in issuing and sustaining the preliminary injunction, the trial and appellate courts "denied Schiff his freedom of speech guaranteed under the First Amendment' (At page 551)

CERTIFICATE OF SERVICE
This is to certify that a copy of the foregoing "Motion For Stay of the Permanent Injunction" was deposited in our unit mailbox on November 24, 2008 for delivery to a U.S. Post Office and addressed to:
Michael J. Roessner, Trial Attorney, Tax Division U.S. Department of Justice, P.O. Box 7238, Wash. D.C.
And a copy was sent to:  Cynthia Neun, FPC Phoenix, 37930 North 45th, Unit Papago B 012L  Phoenix, AZ 85086

Read The Order from Judge Lloyd D. George

Read Irwin's Supplement to the above by clicking here