Two federal appeals court judges on Tuesday repeatedly expressed skepticism about the government’s effort to ban the sale of a book that purports to show people how they can legally stop paying income taxes, a theory that one judge called nonsense.
The two judges on the United States Court of Appeals for the Ninth Circuit were even more skeptical about whether the author, Irwin Schiff of Las Vegas, can be required to give the Internal Revenue Service a list of everyone who bought his book, “The Federal Mafia: How the Federal Government Illegally Imposes and Unlawfully Collects Federal Income Taxes.”
Michael Stein of Las Vegas, the lawyer for Mr. Schiff and his bookstore, Freedom Books, said that however wrong Mr. Schiff’s arguments might be they were protected under the First Amendment. He compared Mr. Schiff’s theories to those of abolitionists who opposed slavery in the first six decades of the 19th century. And, Mr. Stein said, giving the I.R.S. a list of those who bought the book “would have a major chilling effect” on dissent and free speech.
Mr. Schiff, 75, who has twice served prison sentences for tax crimes, is appealing an order issued in July by Judge Lloyd D. George of Federal District Court in Las Vegas that bars Mr. Schiff and two others from selling the book. The appeals court stayed the order while it is being challenged. Under the order, anyone other than the three is free to sell the self-published $38 book.
In a separate case in Las Vegas, where the Justice Department is trying to collect $2.5 million in taxes, interest and penalties, Mr. Schiff has filed papers by his psychiatrist, who concluded that Mr. Schiff is insane and holds a deluded belief that he alone can properly interpret the tax laws.
Mr. Schiff’s girlfriend, Cindy Neun, has sent Mr. Schiff’s supporters an e-mail message saying the insanity claim is a ruse intended to escape penalties on the unpaid taxes.
During the 40-minute hearing in San Francisco, Judith A. Hagley, a Justice Department lawyer, said past rulings established that “the First Amendment does not protect fraud.”
Judge Fletcher, who said that the legal theories in the book were “nonsense” and “a sure way to get in trouble” with the I.R.S., frequently interrupted Ms. Hagley. “Tell me why this is fraud,” the judge asked.
Ms. Hagley said people who bought the book and followed its advice would face penalties for filing frivolous tax returns or worse.
“They market it as a how-to book,” she said, reading from literature that says the book “is the starting point to legally stop paying taxes.” Promotional materials say that it “explains the procedures used by thousands to legally stop paying income taxes.”
Ms. Hagley said that because that contention was obviously untrue, an assertion that the judges agreed with, then the book was fraudulent.