On the face of it, Irwin Schiff and Karl Meyer don't seem to have much in common. Schiff, a civil libertarian who supports a strong defense, lives well in Connecticut on the income from his books and seminars. Meyer, a pacifist and war protester, makes about $15,000 per year as a free lance carpenter in Chicago.
But they share one striking characteristic: Neither has paid federal income tax in more than 10 years.
They are, in the eyes of the Internal Revenue Service, illegal tax protesters. They are two of the thousands who won't join the ranks of weary Americans mailing their tax returns by midnight Monday.
Politically, they're almost opposites. Schiff says that he considers almost every economist after Adam Smith a "left-winger." Meyer calls the United States "a terrorist organization."
They represent the two leading types of tax protesters today. Schiff and his followers contend that the personal income tax is unconstitutional. Meyer and others like him, also citing constitutional arguments, say they don't want to support a warmongering government.
The government prosecutes both kinds of tax resisters, as well as other varieties, such as questionable churches. Schiff and Meyer have spent time in prison. Some protesters have defied the IRS for years, but the government says that it is clamping down on protesters and has reduced their numbers.
"We cannot have a system of income taxation in this country and allow people to choose whether they will or will not comply," said IRS Commissioner Roscoe L. Egger Jr. "Every single one of the arguments has been dealt with by the courts over and over again. There just is no basis for any of them. I think we've turned the corner on that. We're seeing a downturn in these movements."
Leaders of the resisters contend they are going like gangbusters. Schiff says that his first tax book, "How Anyone Can Stop Paying Income Taxes," has sold 200,000 copies. Through the seminars he holds and charges for, and through antitax clubs, Schiff, 57, estimates that he has influenced 400,000 to 500,000 people. He also said that he has made "a lot" of money.
He probably is the only person in the United States who carries the Internal Revenue Code, excerpts from the Constitution and the "Tax Rebel's Guide" in his briefcase. He talks virtually nonstop about why he thinks that the income tax is unconstitutional, illegal, immoral and voluntary as he shuffles court opinions, passes out briefs from his court cases, and labels judges and lawyers members of a conspiracy.
"If you were really required to file an income tax, it would violate the First, Fourth and Fifth Amendments to the Constitution," he says, jabbing a finger in the air.
However, Marvin J. Garbis, a Baltimore tax attorney who frequently debates Schiff in public, says: "Mr. Schiff is a likable, enjoyable and entertaining man but . . . I'm very sorry for people who are misled by him because they are going to lose a lot of money."
The IRS says that, of roughly 28,000 "protest" returns it received last year, the largest portion, 16,700, was of the constitutional variety. There is no way to tell how many didn't file a return or used other methods not to pay taxes.
Scott Rendelman, a Rockville accountant and Schiff disciple, told all 350 of his clients last year that they did not have to file a tax return. Only six followed his advice, but Rendelman said he is convinced that the income tax is illegal. He, on the other hand, uses a variety of deductions for the self-employed and shuffles losses to avoid paying any federal or state income taxes.
The constitutional tax-protest movement has spread to the federal government. A Commerce Department employe simply checked the box on his W-4 form, where taxpayers can specify how many allowances they want used in withholding money from their paycheck, that said he did not expect to owe any taxes and thus wanted no money withheld. He has not filed a return in three years and the IRS has sent him only one notice, he said.
"I do work for the federal government, and I'm proud of it," said the employe, who asked that his name not be used. "I can stop waste and fraud here. But the only way we can really cut back on federal spending is to not give them so damn much money."
The constitutional protesters marshal a dizzying variety of arguments to make their case. The income tax violates constitutional restrictions on sharing taxes among the states and requires citizens to bear witness against themselves they insist. Moreover, they say, wages and salaries aren't income, they are an exchange for labor and shouldn't be taxed.
The tax court and other judicial bodies overwhelmingly have rejected these arguments and, using a new law, are starting to impose a $5,000 frivolous-case penalty against protesters who turn up in court too often making those points. An attorney in Denver was temporarily suspended from the bar by the tax court for using that forum to make frivolous arguments. Egger said that groups of former protesters are beginning to pay up after some of their colleagues have been sentenced to jail.
There clearly is a market for the tax-protest business, however. One mail-order catalogue includes such book titles as "Who's Afraid of the IRS," "Tax Free," "How to Pay Zero Taxes" and Schiff's latest, "The Great Income Tax Hoax."
The war-resister literature is equally plentiful, but its message is different.
"Current tax laws deny the constitutional rights of conscientious objectors to military taxation who cannot support war and the military establishment with their federal taxes," says a brochure for the Conscience and Military Tax Campaign.
The goal of the campaign is to get 100,000 people to sign a petition and promise to stop paying taxes in a mass protest. In the meantime (1,000 signatures have been gathered), some members are refusing to pay taxes or the portion of their taxes equal to the Pentagon's share of the federal budget.
Meyer, for example, said that he hasn't paid federal income taxes since 1960. He was a leading war-tax protester during the Vietnam war and has continued to arrange his economic life so that the IRS has been unable to collect from him.
He is paid for his carpentry work in cash. He and his wife, Kathy Kelly, rent an apartment. They leased a car, but the IRS confiscated it under the assumption that it belonged to Meyer. Like many pacifist-type resisters, they deliberately try to keep their incomes below or near the taxation cutoff. Kelly turns part of her salary back to the Catholic school where she teaches.
After not filing a return for 24 years, Meyer decided to change his tactics last year to protest the IRS' new $500 frivolous-return penalty. He filed 365 tax returns for tax year 1983, each to a different IRS office. On them he wrote statements condemning the nuclear-arms buildup, U.S. policy in Central America and militarism. In the space for the Social Security number, he wrote "peace" or "love."
So far, Meyer said, he has been assessed with frivolous-return penalties totaling $138,500, not including interest.
Other methods used by resisters include paying taxes in pennies, writing "checks" on mock bombs or missiles, remitting grain or medical supplies and paying in increments of $5. Some pay the amount of their taxes into an alternative-tax escrow fund that has a balance of $250,000. Legislation introduced in Congress in 1972 would convert this into a government-run fund for conscientious objectors.
Many of the war resisters, estimated to number less than 10,000, are Quakers or members of other religious groups. They emphasize their differences with the more numerous constitutional protesters.
Meanwhile, the Schiff-type protesters contend that their protest is legal and the war resisters' is not because, under the Constitution, citizens cannot designate how their money should be spent.
All are the same to the IRS. Said Egger: "The plain facts are, most of them are protesting what to them seems unfair. Some of them may have some rationale for what they do; others do it because it sounds good and it will save them money."
IRS officals point to increasing use of penalties and more and longer jail sentences for protesters to show they are making progress. Most protesters don't go to jail, because failure to pay taxes is not a criminal offense unless it can be proven the person did so willfully.
But more than 8,000 frivolous-return penalties were imposed in 1984, and many of those were greater than the taxes owed. The IRS also is scrutinizing W-4 forms to find people who are claiming excess allowances. The number of protest returns fell between 1983 and 1984, and the war protesters admit that some of their number are giving up because they wind up paying more toward military spending than they would have otherwise.
Even the king of protesters may find his glory days numbered: Schiff is to appear before a federal judge in Connecticut on Wednesday to be arraigned on charges of failure to pay income taxes or file a return.