April 19, 2007 | Read Time: 1 minute
The Justice Department has sued the leader of the We the People Foundation for Constitutional Education, charging that he has been using his nonprofit group to promote a tax-fraud scheme that has cost the federal government more than $21-million.
The government alleges that Robert L. Schulz, of Queensbury, N.Y., has been using his charity to tell donors how to file documents so their employers will not withhold federal employment taxes from their paychecks. Mr. Schulz denies the charges.
The We the People Foundation questions the legal authority of the IRS to force employers to withhold such taxes or to force most Americans to file a tax return, and it has gone to court to challenge the government’s ability to tax its citizens.
The organization received more than $250,000 from private sources during its 2005 fiscal year, according to its most recent Form 990 filing. The form states that the organization did not pay a salary or benefits to Mr. Schulz or any of its other officers.
Donations to the foundation are used to pay for civic education, legal advocacy, and activism efforts, the organization says on its Web site.
But the Justice Department alleges that the foundation’s fund-raising efforts are fraudulent and says that Mr. Schulz is encouraging donors to break federal laws.
