The Oral Arguments on 11/5/2007

To download the 49 minute recording, or to listen on-line,
click here and when a new page opens, on "06-10145".

This page also shows a transcript of Attorney Waxman's presentation to the Court and, beneath that, this writer's opinion about his strategy for success.

The Transcript

Good morning, my name is Sheldon Waxman, I represent Irwin Schiff; may it please the court, co-counsel, counsel for the government.

Mr Schiff was and is competent to cooperate with a competent attorney given enough time to become acquainted with his defense and witnesses. He is aware of the court proceedings and the nature of the charges against him; but he was not competent to represent himself.

The definition of a "delusion" according to Webster's New Collegiate Dictionary is "to have a persistent, false, psychotic belief regarding the self or persons or objects outside the self." We know so little about the mind, and are only at the beginning of understanding about the brain. We don't know what causes psychosis, and there are no cures. There is a very rare delusion called Chapbras (?) Delusion, where the person so afflicted mis-identifies faces and recognizes people who are not the delusional person they think they are. No amount of reasoning can persuade them of their errors, and in most other respects they can be normal and functioning humans. The delusion to them is real; nor do most psychotics believe they are ill. To them, the voices are real whether they are medicated or not.

Mr Schiff believes that a United States court is going to verify his theories and invalidate the income tax. It's almost laughable - except that an 80 year old man, one-eyed, deaf, is in prison for the rest of his life.

It was error for Judge Dawson not to appoint counsel to conduct a complete competency hearing. The issues of a fair competency hearing and a well prepared, court-appointed attorney are inseparable. How a person with a delusional belief system could be competent to hold his own competency hearing is beyond my comprehension. The failure to appoint counsel and to hold a competency hearing resulted in a Constitutionally unfair trial without more; but there is more.

I'm going to limit my argument to the cumulative error that caused an unfair trial; one that violated the fifth bill and the sixth bill of the Bill of Rights, adopted as amendments to the Constitution. I also want to discuss the surprising Moran case; I do not want to argue the bona fides of Mr Schiff's tax theories although they do have some rational basis. By the way, we're going to reserve 4 minutes total to hear appellants.

Judge Dawson's cumulative erroneous rulings resulted in a fundamentally unfair trial, as that subject is known in the Law, and the doctrine of "harmless error" does not trump a Constitutional violation. In fact it's the failure to appoint counsel, which I say is a constitutional violation, and to hold a competency hearing,

Judge Dawson excluded relevant evidence and blocked Schiff's defense. Sua sponte, he required Schiff to make a [indistinct] for all of his proposed witnesses; he did not require the government to do so.

Dawson demeaned and humiliated Schiff in front of and outside the jury's presence and showed his bias against Schiff from the outset of the trial, as revealed at the sentencing hearing when he said he personally "had to pay more taxes because of you."

He wouldn't allow Schiff to say "I" when he was questioning witnesses; he refused to allow Schiff daily transcripts, even though Schiff had a hearing problem.

He restricted Schiff's interrogation of himself, by sua sponte requiring him to write out questions in advance, including questions on direct.

He Mirandized some of Schiff's witnesses to intimidate them. Judge Dawson found Schiff in contempt of court, and imposed an illegal and vindictive sentence without any trial or a jury trial before another judge, to which he was entitled.

Dawson, by giving Schiff a vindictive and unreasonable sentence after Schiff had moved to recuse him, shows he had a pre-formed bias against Schiff.

Dawson gave erroneous instructions to the jury and refused Schiff's tendered instructions.

Dawson waited until just before the start of the trial to rule on pre-trial motions, in order to impede Schiff's trial preparation.

Dawson interfered with Schiff's direct and cross examination of witnesses, refused Schiff's attempts to call relevant witnesses in his defense, and prevented Schiff introducing relevant documents.

Dawson gave an unnecessary and erroneous sua sponte interim instruction after holding an ex parte conference with prosecutors.

Dawson assumed the role of advocate, in interrogating witnesses.

The government failed to prove that Schiff was guilty of the offenses with which he was charged, and Schiff's motion for acquittal at the close of the government's case should have been granted.

No deficiency existed for the years 1979 thru 1985 and Count 17 should be dismissed as a matter of law because it requires a deficiency - the government's own witnesses testified there was no deficiency, because it was zero, nothing.

IR[C] Sections 1, 61, 63 and 6012 can not be read together according to this Court's decision in Roat.

The government failed to prove Schiff's net income, leaving the jury to believe that his gross receipts were his net receipts. I point out a case from some years ago, in which I was involved personally, where I was subpoenaed against my client to testify - in order for the government to give a net income tax return. And that's how far they would go. They searched his place, they had books and records, they did nothing, they say it was because he was involved in cash, but they didn't even give him any legitimate business expenses. Any business has 50 or 60% legitimate business expenses. He never pointed it out to the court.

The government failed to prove all the elements of the Cheek case and the Moral panel's decision is the correct way to apply Cheek and Bishop.

We agree with all the relevant arguments made by the co-defendants, and adopt them as our own. They should have been severed from this case. A new trial for all of the defendants should be the disposition of this appeal. If there are any questions I'll be glad to respond.

(Then followed arguments from attorneys for Ms Neun and Mr Cohen, and a response from the government counsel. Then Mr Waxman wrapped up:-)
This is not a trial that should be cited as an example of American Justice. It's a tragedy.

I think Judge Thomas asked a very reasonable question, when he said would it be possible that at the outset it was reasonable for the three people to be tried together. There is no question; it would have been reasonable.

Judge Thomas also indicated that Mr Schiff was delusional inside the court but not outside the court - a Jekyll and a Hyde. Well, anybody who knows anything about psychosis understands how that's possible. There were three psychiatrists - one psychiatrist, two clincial psychologists - who said that his belief that a court of law is going to uphold his arguments is delusional - psychotic delusional. On top of that, he had a psychosis called... bipolar disorder. That was in one of the reports [presented].

Justice Ikuta, you [referred to] testimony; there wasn't any testimony at the competency hearing! That's what caused the problem! There was a Cohen letter, which contained two reports about Mr Schiff, that the government intentionally excluded during the first hearing before the first magistrate. They didn't provide it to the court; they didn't provide it until what they call the second Fereta (?) hearing. By the way, Fereta is the case I think you're looking for.

Now, this man had two prison convictions that the government says are proof that he was willful; but that's proof that he is delusional, if anything! Nobody that I know of who has any sense whatsoever could ever think that a third time would require an innocent verdict. So you're dealing with an unusual person, who may appear reasonable at times - I've had countless calls with him in prison. He understands why this defense might work or not work - in order he is able to deal adequately with counsel. He would not be a person who would become a Bobby Peel (?) who you'd have to put handcuffs on and put him in a seat. He's not that type of unreasonable person. He's not a venal person, although that's how the government describes him.

This was a circus-like trial, and I think all three defendants deserve an American trial, a fair trial. Thank you.


The Opinion

This comes with zero input from Mr Waxman or Mr Schiff. It's simply deduced from what was said on 11/5 and what is contained in the written appeal.

At first I was surprised that Mr Waxman so emphasized the matter of Mr Schiff's supposed mental delusions. He almost seemed to give away the farm by saying Schiff was obviously delusional in that he believed a US court would find that the income tax was not legally imposed. One must wonder why, when the written appeal contains such overwhelming proof that it was not.

The court has only two options: to grant the appeal or to reject it; and without doubt, there is a strong prejudice in favor of rejection. However...

(a) To reject the appeal, the court must answer all the big legal arguments in the written appeal - the very thing nobody has yet been able to do. The justices would have to lie, again and again, in a flagrant and transparent manner; or alternatively, to ignore those arguments altogether, which would be just as derelict. It is reasonable to assume that none of them wish to do that; that each values his or her own professional integrity. For that reason, they will come to seek a way to grant the appeal.

(b) To grant it, however, the justices face another difficulty: if they concur with Schiff's legal arguments, as they should, they will have fatally undermined the "income tax" and ended all hope of future career success. This, they may like even less than alternative (a). Thus, they are between a rock and a hard place.

(c) To grant it for reasons other than concurrence with the legal arguments about the i-tax, however, would furnish a way out of their dilemma. That, I think, is why Mr Waxman laid such stress on Dawson's failure to provide a "fair trial" by admitting the psychiatric report, ensuring adequate representation, etc. Using that as its basis, the Court could order a new trial without having to rule on whether Schiff's reasoning about the i-tax is true or false, and criticize Dawson not for running an outrageous charade but for making a mistake about what constitutes fairness. Therefore there is good hope to expect a granting of the appeal.

Would there then be a new trial? - that will depend on the prosecution. They might just let the matter rest; the defendants have done prison time, it has been proved that nobody can promote the view that "anyone can stop paying income tax" and expect to get away with it, and anyway Schiff will be 80 years old and a fresh trial may not necessarily go their way. Why take the risk? Further, if the appeal is granted on the grounds that Dawson failed to account adequately for Schiff's delusional state, the DoJ/IRS will be able to publicize "He got off only because he says he is mad. We're not going to spend public resources arguing with that" and once again, avoid having to meet the central issue of the missing law.

They might, however, try to reach an off-the-record understanding with Irwin Schiff. They might convey to him that they will leave him in peace, provided he does not re-open his business or promote noncompliance with IRS wishes. That would place this hero of freedom, who has already done so much, in a tough spot. At his age, what would you do?

My own answer is that I would accept the deal. We are in a war, and in war it's very foolish to fight the enemy on his own strong ground when a different strategy would be easier and more successful. Further, the target of the fraudulent i-tax is not a primary target but a secondary one, a symptom of something much worse. The deeper outrage is not so much that a tax is collected without a law, but that a tax is collected at all. I would therefore work to eradicate government altogether; a way does exist and is already being used.

In addition, at the age of 80 I'd want to smell a few roses.