All Nevada Bank Accounts At Risk

Special to the Las Vegas Tribune

Las Vegas, Nevada
http://www.lasvegastribune.com/FP02062601.htm

6/26/02

Irwin Schiff goes back to court July 8, 2002 to argue why Judge Allan R. Earl should reverse his ruling of April 24, 2002 dismissing Schiff's $83,000 breach of contract lawsuit against the Bank of America.

Schiff claims that the B of A violated both Nevada and Federal law in turning over his money to the IRS in response to a benign notice it received from an IRS agent without enforcement authority. Schiff claims that the Bank openly violated Nevada law (N.R.S. 31.291 and 31.249), which specifically bars garnishment of Nevada bank accounts except pursuant to court orders and writs of garnishment.

In essence, Schiff’s lawsuit seeks protection for all Nevada bank depositors from lawless IRS seizures. Schiff maintains that if Judge Earl does not reverse his ruling and allow Schiff's lawsuit to go to trial, Judge Earl "Will have repealed Nevada law, and enabled the IRS to continue looting Nevada bank accounts in the future as they are doing now and have done for over 70 years." So it would seem that all those with funds in Nevada banks (and in banks throughout the country) have a stake in Schiff’s lawsuit.

One need only read Schiff’s briefs (Schiff v. Bank of America, No. A 440323) to see that the Bank of America hasn’t a legal leg to stand on. The Bank’s defense (overlooking Nevada law) is that it was 1) required to honor the notice it received even if it were sent by "a secretary or a janitor, or whatever," and 2) the Bank was under no obligation to verify that the person sending the notice, had any authority to do so. Schiff's briefs make short shrift of both arguments.

For one thing, Schiff points out that the law (26 USC 6332) that both the Bank and Judge Earl claim to rely on states, that a "levy" must be made by the Secretary of the Treasury or one with delegated authority from him. Would the Secretary delegate to a janitor the authority to "levy" bank accounts? As far as the Bank claiming it was under no obligation to check on the authority of the agent sending out the notice, Schiff’s briefs contain numerous quotations from Supreme Court decisions in which that Court has repeatedly ruled that "Those dealing with an agent of the United States must be held to have had notice of the limitations of his authority." So much for the Bank of America's defenses.

Prior to Judge Earl issuing his April 24th ruling, Schiff deposed IRS Revenue Officer James Gritis regarding his authority to enforce the payment of income taxes. He was ordered to produce his IRS "pocket commission." The IRS issues two types of pocket commissions, an "enforcement" commission and a "nonenforcement" one. Gritis could only produce a "nonenforcement" pocket commission, proving that he had no enforcement authority that would have required the Bank of America to honor his notice of levy. Schiff had furnished the Bank of America with numerous documents alleging this before it sent off his money. Therefore, Judge Earl was aware of Gritis' obvious lack of enforcement authority before he issued his April 24th ruling.

In addition Schiff supplied the Court with three affidavits: one from Joe Banister, a former IRS Special Agent, John Turner a former IRS Revenue Officer, and Sherry Jackson a former IRS Revenue Agent, all of whom certified that based on their knowledge, training and experience as former IRS collection agents, IRS agents (like Gritis) have no actual enforcement authority and must rely on the cooperation of uninformed and fearful 3rd parties (such as banks and employers) for their benign notices of levy to work. In his brief filed with the Court on June 20th, Schiff even submitted an affidavit from the party who purchased his insurance agency in 1985 pursuant to a 10-year installment sales agreement.

When the IRS sent a notice of levy to that party seeking those installment payments, it was told to come back with a court order. They never did, and the purchaser continued making payments to Mrs. Schiff for 10 years. Schiff claims that the Bank of America (and any third party) can ignore IRS notices of levy in the same manner.

Judge Earl dismissed Schiff’s lawsuit on three grounds: 1) "26 USC 6332 applies to the Bank of America," 2) "The Bank of America was required to respond to the Notice of Levy," and 3) "The Bank of America is absolved from any liability pursuant to 26 USC 6332." Schiff’s briefs in connection with his Motion for Reconsideration extensively refute each one of these claims, while also pointing out that Judge Earl's ruling did not mention Nevada statutes 31.291 and 31.249 nor explain why they didn't apply in this case.

In addition, Schiff claimed that his Ruling ignored Gritis' obvious lack of enforcement authority as evidenced by his "nonenforcement" pocket commission, and the affidavits of three former IRS collection agents.

Schiff’s briefs make clear that Code Section 6332 only applies to a "levy" and not to "notices" of levy, the document at issue in this case - and that under both Federal and State law a "levy" must be based on a court order and a writ of garnishment, neither of which were issued in this case. Schiff further argued that even if Section 6332 did apply, it contains a provision allowing for failure to turn over property based upon "reasonable cause." Schiff argues that the Bank was fully informed that Gritis was without enforcement authority, and this provided the Bank with "reasonable cause" for not honoring his notice of levy.

In addition, the Bank’s Deposit Agreement (which was substantially changed within weeks after Schiff filed his lawsuit) allowed the Bank to turn over disputed funds "into an appropriate court of law for resolution." Schiff claims that based on these two factors a jury might well conclude that this is the action the Bank of America should have taken instead of turning over his money directly to the IRS. In any case, Schiff argues, that Judge Earl has no "legal or ethical right" to deny Schiff the opportunity to argue this factual issue to a jury.

As for Judge Earl’s third claim that Section 6332 "absolved" the Bank "from any liability" Schiff’s pleadings would seem to refute that claim on a variety of grounds.

Schiff's pleadings point out that the notice of levy at issue was sent out pursuant to Code Section 6331(a) and not Code Section 6332 as cited by Judge Earl, and that his ruling totally ignores Code Section 6331(a), the law that actually applies. And Schiff points out that Code Section 6331(a) provides that notices of levy can only apply to the "accrued salary and wages" of Federal employees, so its issuance in this case was in obvious conflict with the law. Schiff's briefs also point out that in actuality Federal law (26 USC 3001-3308) is in harmony with Nevada law and the "Due Process" clause of both constitutions in that both laws require court orders and writs of garnishment in connection with the seizure of property in the hands of third parties.

When this reporter asked Schiff why Judge Earl would ignore all federal and state law and all of the affidavits submitted by Schiff, he stated: "Well I really believe that Judge Earl is a good and honorable judge. He allowed me to depose Gritis and he admittedly received a lot of heat for doing so. But it is obvious that Judge Earl is now under tremendous pressure not to allow this case to go forward, since it will expose how Federal Courts and the Justice Department have allowed the IRS to seize and garnish property in total violation of law and the 'Due Process' clause of every State constitution and the U.S. Constitution as well. However, I believe that Judge Earl will reverse his prior ruling and allow my lawsuit to go forward. In my briefs, in connection with my Motion for Reconsideration, I was able to focus on certain arguments that I hadn't emphasized before, since I had largely relied on those Nevada statutes and Gritis’ admitted lack of enforcement authority to win my case. I actually sympathize with the pressure that Judge Earl must be getting. But he is too good a judge to allow his reputation to be tarnished by not letting this case go to trial in obvious violation of law."

Most agree that Judge Earl should let the case go forward and let the chips fall where they may. "

I intend to publish a book containing all the pleadings, transcripts and exhibits generated by this case along with some additional research showing how Federal judges have illegally tied all Federal civil seizures into a principle of Admiralty law, which has no place within the continental limits of the United States. In addition, the Federal government is actually practicing judicial blackmail in connection with IRS and civil seizures. It knows that the persons whose property it illegally confiscates simply do not have the money to go to court and fight the Government's illegal seizures. In addition it is practically impossible for persons whose property is illegally seized by the Federal government to find a lawyer who has the knowledge, skill, courage, and willingness to fight the system."

Schiff went on to say, "We now have an opportunity to air out the stench of illegal Federal, IRS seizures in a State court room. I am hopeful that Judge Earl - in the interest of the American public and the Rule of Law - will allow a Las Vegas jury to finally hear all the gory details concerning how the Federal government has been robbing the American public blind with its illegal IRS seizures."

Schiff is also quick to point out that the funds turned over by the Bank of America involve taxes the Government claims Schiff owes for the years 1979-1985 and not for any year in which he has filed his famous "zero" return.

Schiff filed tax returns for those years in connection with a probation violation hearing in 1991. Schiff was prosecuted in 1985 for tax evasion largely based on his failure to file tax returns. In that trial, Connecticut Judge Peter Dorsey subsequently instructed, what had been a hung jury, that it could convict Schiff even if the Government did not prove the act of evasion Schiff was charged with committing. It was based on that experience that Schiff later developed his "zero" income tax return.

Schiff files tax returns each year but admittedly pays no income taxes since he claims his income is "zero" and the Government apparently leaves him alone. A 25 foot sign in front of the Las Vegas building housing Schiff's offices unabashedly proclaims "Why Pay Income Taxes When No Law Says You Have To." Those wishing to indicate their concern and interest in this case can write to Judge Earl at Dept. 19, Clark County Court House, 200 S. Third St., Las Vegas, NV 89109.

Schiff has written numerous books concerning what he believes to be the Federal government's unlawful collection of income taxes. Reviews of many of his books including his latest, The Federal Mafia: How the Government Illegally Imposes and Unlawfully Collects Income Taxes can be found on the Amazon web site. Schiff has an extensive Web site of his own, www.paynoincometax.com and has offices at 444 E. Sahara, Las Vegas.