District Court Enjoins NY "Tax Termination" Scam

Interesting article in today's New York Law Journal:  N.Y. Federal Judge Enjoins "No Tax" Group's Solicitations, by Joel Stashenko:

Two Queensbury, N.Y.-based groups that disseminate materials purporting that people have a right not to pay federal income taxes are doing little more than "promoting an abusive tax shelter," a federal judge has ruled. Senior Judge Thomas J. McAvoy of the Northern District of New York permanently enjoined Robert L. Schulz and his two groups -- We the People Foundation for Constitutional Education Inc. and We the People Congress -- from continuing to make materials available by mail, over the Internet or in person that claim citizens do not have an obligation to pay federal income taxes and how they can opt-out of filing W-4 withholding forms. McAvoy also directed the groups to turn over to the U.S. government the names, Social Security numbers and other identifying information about people who received the "Tax Termination Packages" from the groups.

"Defendants have embarked upon a nationwide plan to disseminate its materials to encourage people to stop having taxes withheld from their wages," McAvoy, sitting in Binghamton, N.Y., wrote in United States v. Schulz, 1:07-cv-0352. "Defendants' materials are intended to cause employees to believe that they need not pay an income tax and employers to believe that they need not withhold taxes from employees' wages or pay matching amounts."

• DOJ Press Pelease (8/9/07)
• United States v. Schulz, No. 1:07-cv-0352 (N.D.N.Y. 8/9/07) (opinion and order)
• DOJ Press Release (4/3/07)
• United States v. Schulz, No. 1:07-cv-0352 (N.D.N.Y. 4/2/07) (complaint)