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The Irwin Effect

A good man has inadvertently left a problematic legacy.

I HAD AN EPIPHANY RECENTLY concerning the trouble we all have trying to open certain eyes to the truths about the income tax. My own eye-opening came after corresponding with a long-time "tax honesty" guy who exhibited what I am dubbing the "Irwin Effect"-- a strong influence on his perceptions of income-tax-related matters by virtue of exposure to Irwin Schiff and his story.

Though it's easy to forget as time goes on, Irwin's "heyday" was the real deal.

Schiff appeared as early as 1978 on NBC's 'The Tomorrow Show' with Tom Snyder, conducted seminars all over the country for years, was a C-Span-covered candidate for the Libertarian Party presidential nomination in 1996 and was featured in Aaron Russo's very widely-seen 'Freedom to Fascism'. As recently as 2005, Irwin had the ear of very large audiences on shows like George Noory's 'Coast to Coast'.

Irwin Schiff had a message many, many people found very compelling, and the support of a very large and very devoted army of followers, who magnified the effect of his individual efforts exponentially. He influenced the perceptions of a lot of Americans regarding the income tax.

UNFORTUNATELY, IRWIN'S MESSAGE was wrong-- well, partly wrong, anyway. The overall message of "Irwin Schiff, the phenomenon" was entirely wrong.

Here's what Irwin got right: The income tax is systematically misapplied. In popularizing that perspective, Irwin did a very good thing. Many, many people-- including me-- were encouraged to look closely at something that the government does not want closely scrutinized.

But that was about it. Irwin Schiff didn't really understand the tax.

For instance, Irwin didn't understand the scope of the tax and the true nature of its objects. While he recognized it as an excise he didn't really grasp all the implications of that fact.

Irwin had no idea about the real legal character of FICA taxes; nor that today's tax remains the same one first imposed in 1862.

Nor did Irwin have any idea of the meaning of "capitation" and its significance in qualifying the income tax and its limits. Most significantly, perhaps (at least from a practical standpoint), Irwin did not understand the legal dynamics of the tax-- especially the role played by "information returns". He suffered from many other misunderstandings and faulty conclusions, as well.

I SAY ALL THESE THINGS with respect and affection. Irwin Schiff did the best he could with limited resources-- most particularly the limitations imposed on everyone during his research period for lack of digitalized data that could be accessed and processed with computer power.

But forgivable as Irwin's mistakes may be, the real issue today is that a huge number of people arrived at key perceptions of the income tax by paths carved through the prior cognitive wilderness by Irwin Schiff.

SOME OF THESE "IRWIN EFFECT" folks came to believe that Irwin knew what he was talking about. These folks ended up with an enervating conclusion that "you can't fight City Hall, no matter how right you are" after seeing nothing practical come of all his efforts (a mere handful of refunds allegedly secured by followers over all those years but with no details provided and never even an argument on behalf of reclaiming erroneously withheld FICA surtaxes) and Irwin end his days in prison.

These folks won't listen to anything critiquing or conflicting with Irwin's teachings, and at the same time are largely sidelined. Many settled into the disastrous practice every tax agency loves to see: "non-filing".

THOSE IN RANGE OF THE "IRWIN EFFECT" who didn't come to believe Irwin knew what he was talking about fell into a different cognitive trap. Even though not believing Irwin right these folks nonetheless saw him as a serious, capable and dedicated researcher.

These folks were fully correct on the first and third of these assignments of character, and forgivably wrong on the second. Irwin was very articulate, always had some authorities to cite on behalf of his assertions, and was so self-confident as to radiate scorn of any failure to accept whatever he declared true. He appeared capable, to anyone who hadn't themselves done research into the same subject areas.

The take-away for these folks, therefore, is that there is nothing to be found in parsing through the tax code.

Surely (goes this latter line of thought), if there had been a big "Gotcha!" to be found in regard to the income tax Irwin Schiff would have found it. That he did not means that "it" isn't there at all.

To those in this second "Irwin Effect" group, anyone who says that there is a "Gotcha!" to be found regarding the income tax must be incompetent or a charlatan. Paying attention to anything presented by such persons, they conclude, would be a waste of time.

SO, I'M SURE YOU ALL SEE THE PROBLEM. Irwin Schiff had such a heyday that a very large number of Americans-- those over the age of forty, especially-- are subject to the "Irwin Effect" in one of the two versions outlined above. Those in the group that concluded Irwin was capable, dedicated and wrong are thoroughly represented in journalism, the legal profession and the academy.

Consequently, in trying to garner the respectful or even just indifferent attention of anyone in this latter group-- even to just look at the evidence distinguishing CtC from the work of Irwin Schiff or anyone else in the tax honesty movement-- one has this big, well-entrenched mental speedbump to overcome. It can be a slog.

Thus, this observation, under the theory that forewarned is forearmed. Maybe these insights will allow everyone more success in outreach to Irwin Effect-afflicted media figures and professionals. Maybe, too they will help in efforts to wake up some of that vast army of non-filers out there.

P.S. It should go without saying that everything said above about the "Irwin Effect" is likewise true in regard to any other non-CtC "tax theorist" that ever captured anyone's attention. Thus, the "Irwin Effect" is duplicated for some by a "Larken Effect", or a "Crier Effect" or a "Bannister Effect" or a "Myrdland Effect" or a "SEDM Effect" or whatever.

All of these folks, like Irwin Schiff, promoted (and in some cases still promote) errant notions about the tax, and anyone taken in by them will have ended up cynical and unlikely to be easily open to even the actual truth about the income tax. Indeed, there is good cause to suspect that this result is the purpose behind some of these "theories appearing in the tax honesty community, especially the more obviously ridiculous ones. See this page for more on that.


AS NOTED ALREADY, IT SHOULD BE UNDERSTOOD that everything I have said that is critical of Irwin Schiff's conclusions in the piece above is said reluctantly, and with no disrespect intended for Irwin Schiff, the man. I thought very highly of Irwin Schiff, and hold his memory in high esteem.

As I said, Irwin influenced me in my early research into the tax beginning in the 1980s. I bought and read all of his books.

In fact, in the early editions of CtC I included a very sincerely-meant "acknowledgements" reference to Irwin (and to a couple other folks also in the "tax honesty" movement whose efforts I have appreciated). I reluctantly removed that reference in later editions upon discovery that some folks weren't bothering to read the book due to imagining it to be just warmed-over Schiff propositions. These folks then actually discouraged others from reading CtC, by telling them what they thought the book must say.