Case Status: Victory: All IRS subpoenas withdrawn
Hendrickson v. U.S.; Hart v. U.S.
CIR victorious in show-down with IRS
After a year-long fight with the IRS over the right of private citizens to publish a book critical of the government, CIR has successfully halted another effort by a government regulatory agency to suppress protected speech. The Department of Justice and the IRS have withdrawn all pending requests for the names and addresses of individuals who purchased books written by two authors critical of the IRS.
CIR defends right to publish
Pete Hendrickson’s problems started with a letter from the Internal Revenue Service threatening legal action and demanding to see all of his records about his recently published book on U.S. tax law. The IRS called the book an “abusive tax shelter,” a term normally reserved for fraudulent tax schemes. According to the IRS, Hendrickson’s readers were not just some folks who bought a book for $19.95, but “investors” in his “tax shelter.” Seeing the absurdity in the IRS’s claims, Hendrickson asked CIR to defend his right to publish his book, and CIR quickly began work to set the IRS straight.
IRS demands the names of book purchasers
“WE CAN ONLY SPECULATE ABOUT WHY A REVENUE AGENT WOULD WANT [TO KNOW WHO WAS READING PETE’S BOOK]. MOST PROBABLY, IT WAS TO TARGET AUDITS OF OTHER TAXPAYERS.”—TERRY PELL, CIR PRESIDENT
After its initial letter, the IRS stepped up its campaign against Hendrickson. U.S. Marshals showed up at his door step with subpoenas demanding more information including the names of everyone who had purchased his book. One can only speculate as to the IRS’s motives, but what better way to suppress a book than to disclose its readership to the IRS? Unintimidated, CIR continued to defend Hendrickson as he refused to turn over the names.
The legal battle
Facing the IRS summons for Hendrickson and his records, CIR got to work and headed out to California, where Hendrickson’s credit card processing company is located. There CIR moved to quash the subpoena of Hendrickson’s customer records. Shortly after this, the case was transferred from the IRS to the Justice Department, which is charged with defending the government in court. As soon as DOJ saw that the IRS was trying to investigate a book and not a taxpayer, it withdrew the government’s subpoena of Hendrickson and his documents.
Victory for CIR and the first amendment
The withdrawal effectively ended a year-long legal battle and allowed Hendrickson to continue selling his book. The investigation against him ceased without the IRS obtaining his customers’ names and addresses. This was a win for CIR’s efforts to re-establish a principled conception of the First Amendment – one that protects expression regardless of the point of view.
CIR believes the appropriate forum for contesting Hendrickson’s views about the tax code is the court of public opinion. Moreover, to the extent that the IRS believes a taxpayer has filed an incorrect tax return, it has ample authority with which to investigate and pursue an appropriate remedy.
CIR beats back IRS investigation of Idaho man
“I READ YOUR BOOK “CONSTITUTIONAL INCOME: DO YOU HAVE ANY?”… THE PURPOSE OF THIS PROMOTER INVESTIGATION IS TO DETERMINE WHETHER OR NOT YOUR STATEMENTS ARE COMMERCIAL SPEECH AND WHETHER THIS ACTIVITY CAUSES HARM TO THE GOVERNMENT.”—LETTER TO PHIL HART FROM BARBARA PARKS, IRS AGENT
Phil Hart is an internationally competitive athlete and a member of the Idaho state legislature. He was puzzled one day when he got a letter from the IRS. He was even more perplexed when he read what the letter said: the IRS was “reviewing” his book on the income tax.
Why on earth would an agency meant to collect taxes suddenly go into the business of writing book reviews, Hart wondered. His puzzlement quickly turned to concern, however, when he found out that not only was the IRS reading his book, but they wanted all of his financial records along with the names of everyone who had purchased his book. Worried what this would do to his readers, Hart contacted CIR. After a brief legal duel, the IRS backed down. It withdrew its requests for Hart’s records and the names of his readers.
What do these books say?
Incredibly, the IRS characterized Hart’s book as an “abusive tax shelter.” Yet the book contains little more than his own postulations about the scope of the U.S. income tax, supported with footnotes and cross-references to the US code and various Supreme Court cases.
Like Hendrickson, Hart states at the outset that each person should make up his or her own mind. His book then reviews the legal history of the tax code. Neither Hendrickson nor Hart offer instructions on how to file taxes, nor do they advertise their ideas as method for reducing one’s taxes. Ultimately, the First Amendment protects the right of citizens to publish books regardless of the point of view expressed. The government cannot intimidate and investigate someone solely for expressing a view critical of the government.
CIR and free speech
Not too long ago, most Americans would have agreed that the right of a citizen to petition and criticize the government is at the core of expression protected by the First Amendment. Increasingly, what used to be accepted as a basic constitutional right has come under assault as government agencies and private interest groups have sought to further their agendas by suppressing the expression of points of view deemed hostile to their interests.
Sadly, Hendrickson’s and Hart’s cases are not unique. Over the past decade, CIR has successfully challenged the selective use of the First Amendment to favor certain ideological and narrow governmental interests:
- White v. Lee: CIR came to the rescue of three citizens who were threatened with a $50,000 fine by HUD for protesting a housing project.
- Perez v. Posse Comitatus: CIR defended a citizens group against lawsuits intended to end the group’s outspoken efforts to publicize illegal immigration.
- Father Flanagan’s Boys Home v. District of Columbia: CIR teamed up with the National Capital Area ACLU to protect a citizens group being sued by a developer for federal housing discrimination merely because it opposed the granting of a zoning variance for a group home.
- AHDC v. City of Fresno: CIR is defending a homeowner against discrimination suit intended to stifle his participation in a development project.
Visit Pete Hendrickson’s website