Robert Schulz's turn

[Demosthenes]

And here's how an Ed Brown supporter responded to the WTP story:

powerchuter wrote:

Hey Claaaaiiiirrreee!

IT'S TIME TO SHOOT THE BASTARDS RIGHT FRICKING NOW!!!

[Demosthenes]

U.S. Sues Tax-Protesting Charity
Elizabeth Schwinn
Special to MSNBC.com

POSTED: 8:44 am PDT April 16, 2007

UPDATED: 10:43 am PDT April 17, 2007

Just in time for tax season, the U.S. Justice Department is suing the founder of a charitable organization for allegedly peddling a national tax-fraud scheme that it says has cost the government $21 million.

The government charges in its lawsuit filed earlier this month that Robert L. Schulz of Queensbury, N.Y., used the charity, the We the People Foundation for Constitutional Education, to falsely tell donors that they could legally avoid having federal income taxes withheld from their paychecks.

Schulz, a high-profile tax protester, denies any wrongdoing and maintains that the foundation simply educates people about the U.S. Constitution.

Until the government responds to the foundation's petition challenging its legal authority to collect income taxes and the authority of the Internal Revenue Service to withhold them from people's paychecks, Schulz said he and his followers shouldn't have to give it any money.

'A right ... to withhold our taxes'
"We have a First Amendment right to withhold our taxes if the government does not respond to our grievances," he said.

Schulz also maintained that the Justice Department lawsuit is invalid because he doesn't sell the information on his Web site, he gives it away. The foundation requests a donation for the material.

Donations to the foundation, which have totaled some $2 million since 2000, have helped it pay for civic education, legal advocacy, and activism efforts in support of its beliefs.

Because the foundation is a charity, the donations are tax-deductible for donors who pay income taxes.

Some experts say they are puzzled that the foundation, listed as a legitimate charity by the IRS, hasn't lost its tax-exempt status.

"It is not charitable to provide tax advice to the public," said Bruce R. Hopkins, a lawyer in Kansas City, Mo. who has written several books on nonprofit law.

As is its policy, the IRS declined comment on a specific case. In general, organizations can qualify for nonprofit status if they show their mission is educational, a spokesman said.

Organizing opposition, taking out ads

Schulz and the foundation have been leading players in the anti-tax movement. We the People has sponsored meetings of tax protesters and paid for full-page newspaper advertisements, including a 2001 ad in USA Today that proclaimed, "Congress has yet to pass a law that requires most Americans to file a tax return or pay income tax."

After the USA Today ads ran, an outraged Congress held hearings on tax protesters, and the federal government stepped up its enforcement efforts.

Since then, life has become more difficult for tax protesters. The Justice Department has obtained more than 230 injunctions since 2001 to stop promoters of tax-fraud schemes.

"People who sell tax scams are asking for trouble for themselves and their customers who participate in them," says Eileen J. O'Connor, assistant attorney general for the Justice Department's Tax Division." They and their customers temporarily enrich themselves at the expense of law-abiding taxpayers. The Justice Department and the Internal Revenue Service are determined to stamp out these scams."

The Internal Revenue Service says the arguments made by tax protesters are frivolous and has posted a rebuttal of the latest anti-tax claims on its Web site.

In recent years, the tax agency has successfully prosecuted people who have promoted schemes to escape taxes or who have boasted publicly of their ability to avoid making income-tax payments, including Irwin Schiff, Lynne Meredith, Larken Rose and Richard Simkanin. All are in jail. The IRS is continuing to pursue criminal investigations of others.

People like Irwin Schiff, who represent the new Internet-based tax protest movement, are different from previous income-tax opponents, according to J.J. MacNab, a financial planner in Bethesda, Md., who has testified before Congress on tax schemes and is writing a book about tax protesters.

New breed of tax protester

In the past, MacNab said, people withheld their tax payments as an act of civil disobedience, for example against the Vietnam War. They knew and accepted jail or fines as the consequences of their behavior.

By contrast, the new protesters are in it for themselves, she wrote in testimony submitted earlier this year to the Senate Finance Committee. "They want the benefits of withholding funds from government (personal enrichment, punishing government programs they don't like) without any of the negative consequences. They are not practicing civil disobedience; they are following a cult-like belief system made up of absurd pseudo-legal theories and wild-eyed conspiracy tales."

Schulz, a former environmental engineer, said he gets no personal benefit from his crusade. According to the 2005 Form 990 tax filing for the foundation, which received $250,000 in donations that year, he collects no salary for his efforts.

Schulz says it's the principle that matters. "The Constitution doesn't defend itself," he said.

But he adds that his fight against the federal government has not been easy or pleasant. "The IRS can turn anybody's life upside down," he said.

[notorial dissent]

his fight against the federal government has not been easy or pleasant. "The IRS can turn anybody's life upside down,"

Particularly when you use an educational foundation as a personal slush fund, and pretend it is being used for the legal purposes, and then also use one of your educational foundations as a vehicle to sell tax evasion methods. Yeah I would bet they can turn your world upside down. I'm betting it will really get interesting when they get around to investigating the two foundations and discover how much of the money was going to Shulz and that he hadn't been reporting it on his income tax returns.

[Imalawman]

Some experts say they are puzzled that the foundation, listed as a legitimate charity by the IRS, hasn't lost its tax-exempt status.

"It is not charitable to provide tax advice to the public," said Bruce R. Hopkins, a lawyer in Kansas City, Mo. who has written several books on nonprofit law.

As is its policy, the IRS declined comment on a specific case. In general, organizations can qualify for nonprofit status if they show their mission is educational, a spokesman said.

I'm sure their 1023 narrative didn't state they were giving tax advice. Offering constitutional education is a perfectly good non-profit purpose. I'm not really suprised they've kept their status. As much as I think they're nuts, I don't think it would be worth the IRS' hassle to revoke their exempt status. I think everything else that they're doing is good enough and will take care of the problem.

[LPC]

Offering constitutional education is a perfectly good non-profit purpose. I'm not really suprised they've kept their status.

I agree that the government should not be in the business of disqualifying an educational organization merely because the "education" they offer is specious crap.

But WTP seems to be committing two much more serious sins:

1. WTP is providing personal benefits to Shulz. Even the "right to petition" lawsuit is aimed to block IRS enforcement efforts against Shulz and other WTP contributors.

2. WTP is attempting to influence legislation.

There is a line between "education" and "tax deductible contributions to fund my political hobby horses," and Shulz doesn't even try to hide the fact that he's crossed it.

As much as I think they're nuts, I don't think it would be worth the IRS' hassle to revoke their exempt status.

It could be much worse *not* to revoke their status, because they are making a mockery of the concept of "educational" organizations.

The biggest danger is that the revocation could be viewed as censorship, but I think the IRS can overcome that if they document the case well (which it sounds like they're doing).

[grammarian44]

Isn't the rule on influencing legislation that "no substantial part" of the activities of" the organization "is carrying on propaganda, or otherwise attempting, to influence legislation"? LPC, you seem to be suggesting that lobbying itself is a per se violation of 501(c)(3) status, when in fact the amount spent on lobbying relative to other expenses is the issue (as is the amount spent on grass roots vs. direct lobbying).

[Demosthenes]

Schulz is well aware of the lobbying limitations; it's why he set up the second charity (We the People Congress as opposed to We The People Foundation) as a 501(c)(4). Despite this effort, however, according to court filings made by Bob, almost all of the donations were made to the (c)(3).

For almost five years, I've been asking for the (c)(4) Form 990s. Haven't seen a copy yet...

[notorial dissent]

I agree with Dan on this, I think Schulz has more than crossed the line on this, and I would bet that even a cursory investigation of the books would show that the funds are not being used as the law requires or permits, or as the corporate charter would have you believe, and that alone should invalidate the tax exempt status both for the foundations, and the donors.

I also believe that WTP is acting as a PAC instead of an educational, and is violating its charter and exemption. That alone should be more than enough to shut them down, and if life were just it would be reason enough to shut them down, but any action is going to be viewed as censorship and persecution amongst the logically bereft, and since there is actual tax fraud going on, I think letting it run its inevitable course is the best choice. Schulz will inevitably hang himself by his own hand, all the while blaming it on a government conspiracy to shut him up as he is revealing the "awful truth" about their dark deeds.

Or they could just nail him for both at the same time and be done with it, which has a certain elegance and simplicity all of its own.

[Quixote]

Schulz is well aware of the lobbying limitations; it's why he set up the second charity (We the People Congress as opposed to We The People Foundation) as a 501(c)(4). Despite this effort, however, according to court filings made by Bob, almost all of the donations were made to the (c)(3).

For almost five years, I've been asking for the (c)(4) Form 990s. Haven't seen a copy yet...

And if Schulz is funnelling money from the (c)(3) to the (c)(4), they're both toast.

[Demosthenes]

Post on Mark Yanonne's blog:

Tuesday, April 17, 2007
MSNBC lies for the federal government

Rushing to the aid of the criminal organization we call our federal government, MSNBC posted the following headline: U.S. Sues Tax-Protesting Charity.

Knowing full well that We the People Foundation for Constitutional Education is not a charity but an educational institution, MSNBC posted that blatant lie above a story that uses many more lies in an attempt to defame and incriminate We The People. The top of We The People's Web site states its mission clearly:

The We The People Foundation is committed to educating Americans about their Fundamental Rights and the history, meaning and power of the Constitution, and the essential Principles of Liberty.

We the People Foundation for Constitutional Education is neither a charity nor a tax protest organization and is no more indictable than the Constitution or the Bill of Rights. However, MSNBC may very well believe that the founding principles of the United States of America do not suit them or the federal government any longer, and, by publishing these lies on top of a very long string of lies delivered to our citizens, will achieve the dual goals of licking the hands of their master and overthrowing this constitutional republic they so fondly and incorrectly refer to as a democracy.

And they wonder why Americans now look overseas for their domestic news.

[notorial dissent]

Schulz is well aware of the lobbying limitations; it's why he set up the second charity (We the People Congress as opposed to We The People Foundation) as a 501(c)(4). Despite this effort, however, according to court filings made by Bob, almost all of the donations were made to the (c)(3).

For almost five years, I've been asking for the (c)(4) Form 990s. Haven't seen a copy yet...

And if Schulz is funnelling money from the (c)(3) to the (c)(4), they're both toast.

And how much do you want to be that part of the reason you haven't gotten them is that he hasn't filed anything for the last five years, to keep the IRS from finding out what he has been doing?

Since when has Schulz been big on following the law that he would comply with these requirements when he ignores everything else that is inconvenient to him?

Just out of curiosity, has anyone pulled the state charters on these ??foundations?? to see what the charters actually say? Bet it would make interesting, hack cough, reading.

[LPC]

Just out of curiosity, has anyone pulled the state charters on these ??foundations?? to see what the charters actually say? Bet it would make interesting, hack cough, reading.

The IRS would have looked at the charters (or articles of incorporation) as part of the applications for tax exempt status, so it's not likely that there is anything in them of any interest.

But the IRS regularly revokes the exempt status of organizations that *operate* in ways that don't qualify as exempt, regardless of what the charters say.

So what's going to be interesting "hack cough" reading is the detailed financials, not the charters.

[Neckbone]

I've written this before reading all posts to this thread, so I don't know if anyone's said this, but here's why I think IRS will not revoke WTP's 501(c)(3). While the 501(c)(3) continues Shulz continues to chum the waters for the TP fish. It's a perfect audit trap. Anyone who claims a charitable deduction for a WTP contribution automatically gets a passing DIF score and a notice for audit.

Neckbone

[notorial dissent]

Dan, what I am saying is that what Schulz put in the original papers, and submitted to the IRS may bear no relationship to what he is doing now.

I agree, the financials ought to be a laugh riot, not that anyone is likely to get to see them until this gets to court.

[LPC]

Anyone who claims a charitable deduction for a WTP contribution automatically gets a passing DIF score and a notice for audit.

Sorry, but Schedule A doesn't ask for the identity of the charity.

[Neckbone]

Anyone who claims a charitable deduction for a WTP contribution automatically gets a passing DIF score and a notice for audit.

Sorry, but Schedule A doesn't ask for the identity of the charity.

Rats, foiled again. Shut it down revenuers!

Neckbone

[Demosthenes]

Certificates of Incorporation and Bylaws for both the WTP Foundation and WTP Congress:

http://www.wethepeoplefoundation.org/00-AboutUs.htm

[Demosthenes]

Radio show with Bob Schulz, Dan Evans, and Seth Heald of the DOJ.

http://www.northcountrypublicradio.org/ ... hp?id=9031

The deadline for filing state and federal income taxes hits next Tuesday. It's a day that millions of Americans dread. Around the country, a small group of tax protestors claim that the collection of income taxes is illegal and violate the U.S. Constitution. One of their leaders, Robert Schulz, lives in Queensbury and runs an organization called "We the People." Critics say Schultz's arguments amount to little more than an urban myth. But according to the Federal government, thousands of people have been misled by Schultz's amateur tax advice at a cost to the treasury of more than 20 million dollars. As Brian Mann reports, the Justice Department is now suing Schultz in an effort to end what they call a "tax scam."

[LPC]

Radio show with Bob Schulz, Dan Evans, and Seth Heald of the DOJ.

http://www.northcountrypublicradio.org/ ... hp?id=9031

I was misquoted.

[ElfNinosMom]

If Schulz doesn't collect a salary from WTP, how does he support himself?