The federal government is suing the leader of a national movement that claims most Americans are not required to pay income tax.
In a recent court filing, the Justice Department sued Robert L. Schulz, a retired engineer in Queensbury, N.Y., looking to bar him from selling an alleged tax fraud scheme estimated to have cost the U.S. Treasury more than $21 million. The government also named two corporations in the suit, We the People Foundation for Constitutional Education Inc. and We the People Congress Inc.
The government alleges that Schulz used the two We the People entities to market a tax fraud scheme, called the Tax Termination Package, to employers and employees. According to the complaint, the package included “We the People” forms, which customers were told could be used to replace forms that the IRS requires employers and employees to use in connection with federal tax withholding from wages.
According to the court filing, the defendants based the scheme on frivolous arguments about federal tax laws that federal courts have repeatedly rejected, several of which were outlined on the IRS’s 2007 list of the Dirty Dozen tax scams.
Schulz has told newspapers that the lawsuit is without merit because he did not sell the tax package. The information can be downloaded from a foundation Web site, where donations are solicited. The site, part of a nonprofit enterprise, has received more than $2 million in donations, according to published reports.
