11 February 2004

Hard Cases Make Bad Law

Yesterday, the Ninth Circuit heard oral argument in US v. Cohen, No. 03-16319 (WMA, 6mb), concerning whether an entire book could be blocked from distribution because the book contains a fraudulent exposition of tax-evasion theories and schemes. As anti-fraud and pro-consumer-protection an approach I ordinarily take, there is a distinct difference between attacking the commercial elements of a book—claims used for marketing purposes that tend to deceive, such as misstatement of the author's identity or misstating the financial returns achieved using the investment strategy touted in the text—and censoring an entire book because it proposes an unlawful course of action that does not place any individual other than the person who engages in the activity at risk.

This is not an easy case. (I am not naming the infamous tax evader to keep antitax activists from getting the incorrect impression that this blawg contains antitax information.) There is no question that the book in question has no legal foundation whatsoever. Can the book therefore be censored by the US government on the grounds that it allegedly incites unlawful activity? I think the law is—rightly—pretty clearly against that position. However, there is an alternative avenue that I don't think anyone has looked at. Naturally enough, the particular factual context makes this even more difficult.

Unauthorized practice of law ("UPL") statutes are intended to protect the public from purported "legal advice" from nonlawyers. This can lead to overreaching, such as the Texas' UPL Committee's attempt to charge NOLO Press with UPL. However, there is a critical distinction between the NOLO Press matter and this one: the authors of NOLO Press books are, in fact lawyers; they merely are not licensed in Texas. The author of this particular tax guide, however, does not appear to be a lawyer licensed anywhere. On the other hand, there is a long tradition of nonlawyer tax professionals, such as CPAs, writing tax-advice books. (Some of them are even worthwhile!) So, then, merely saying that the book provides legal advice from a nonlawyer may be crossing the line to unreasonable extension of tax-collection efforts, particularly as the government has conceded that the majority of the book is political speech and the book apparently contains warnings that the author went to jail for filing returns as he advocates.

This is a troubling matter. I think that the best approach would be for the Nevada bar regulators (as everything appears to take place in Nevada) to look at the book from the UPL standpoint, and see whether it falls within that scope. The IRS, however, is absolutely the wrong party to try to suppress the book, particularly as the IRS's own reputation for accurate advice is somewhat suspect. Then there are the problems caused by the nonacquiesence doctrine… but that's for another time.