In an article entitled, Martin Luther: Did He Pass the Litmus Test? they make the following statement and present a quote from Luther:
Luther firmly believed in and relied upon the Bible as the source of truth. In his study of the epistles of the Apostle Paul he had come across verses which had given him the understanding that only through faith in Christ’s redeeming passion does the Christian receive salvation. Luther’s perception of the gospel was this: Christianity consists entirely in the belief in Christ; the substance of Christ’s teaching is unimportant. Or in his own words, “The Gospel does not teach us what we must do or leave undone, but says: God has done this for you, has made His Son flesh for you, has had Him gone to death for you” (unterrichtung wie sich Christen in Mosen sollen schiicken, vol. XVI, p. 367).Documentation
Twelve Tribes* documents the quote as unterrichtung wie sich Christen in Mosen sollen schiicken, vol. XVI, p. 367. This is a reference to Weimarer Ausgabe: WA 16:367. In English, the reference is to How Christians Should Regard Moses, 1525 (LW 35:162). This treatise is one of Luther's expositions on law and gospel. Luther writes against those who would erect following Mosaic law a requirement for salvation.
After comparing two public sermons from heaven (Exodus 19-20; Acts 2), Luther makes the following comment:
Now the first sermon, and doctrine, is the law of God. The second is the gospel. These two sermons are not the same. Therefore we must have a good grasp of the matter in order to know how to differentiate between them. We must know what the law is, and what the gospel is. The law commands and requires us to do certain things. The law is thus directed solely to our behavior and consists in making requirements. For God speaks through the law, saying, “Do this, avoid that, this is what I expect of you.” The gospel, however, does not preach what we are to do or to avoid. It sets up no requirements but reverses the approach of the law, does the very opposite, and says, “This is what God has done for you; he has let his Son be made flesh for you, has let him be put to death for your sake.” So, then, there are two kinds of doctrine and two kinds of works, those of God and those of men. Just as we and God are separated from one another, so also these two doctrines are widely separated from one another. For the gospel teaches exclusively what has been given us by God, and not—as in the case of the law—what we are to do and give to God. Luther, M. (1999). Vol. 35: Luther's works, vol. 35: Word and Sacrament I (J. J. Pelikan, H. C. Oswald and H. T. Lehmann, Ed.) (162). Philadelphia: Fortress Press.
The typical problem with quoting Luther's How a Christian Should regard Moses to prove Luther was some sort of antinomian is that the document is being taken out of its historical context. Luther directed this treatise towards those like the enthusiasts (Andreas Karlstadt, and the Sacramentarians, etc.). Luther had men in mind who were attempting to introduce Mosaic law into the civil code. This provoked Luther to not only refute such civil notions but to put forth a sharp distinction between law and Gospel in which the Gospel was expounded upon in relation to the law. Christ has fulfilled the law and has given His people the Gospel.
The Twelve Tribes article goes on to state:
To Luther the teachings of Christ were not important because all that he knew about works was that they were of no benefit or merit in regard to salvation. By this thinking, he reduced the gospel to only the redeeming and atoning sacrifice of Christ on behalf of sinners. It became the gospel of going to heaven. However Christ and His apostles preached the gospel of the Kingdom of Heaven. Therefore to the apostles the teachings of Christ were very important, because teaching others to keep the commandments of Christ would establish His kingship or the Kingdom of Heaven.The confusion groups like Twelve Tribes have with Luther is that they typically operate with a gospel that has law mixed into it and then judge that Luther is antinomian. They never take the time to figure out where the law fit into Luther's theology. Even the context of the Luther quote would have helped them, had they actually read, for Luther goes on to state: "For the gospel teaches exclusively what has been given us by God, and not—as in the case of the law—what we are to do and give to God." Luther’s theology indeed has a place for the Law of God and its use in the life of a Christian. Most recently an exposition on Luther and the law has been put out by Concordia- Edward Engelbrect's Friends of the Law: Luther's Usoe of the Law for Christian Life. The author demonstrates that Luther adhered to what later theologians described as a "third use of the law."
Luther held that grace, faith, and the work of Christ are essential ingredients that justify, and that justification is a gift as well as the very faith involved. God judges a man by Christ’s perfect works which are imputed to a sinner, and that sinner is seen as completely righteous. This does not though mean: Eat, drink, and be merry, for tomorrow we die. Salvation is unto good works. Good works are not unto eventual justification. We are saved in order to perform good works, not by performing them. Luther held that faith is a living faith, and it shows its life by what it does. For Luther, we are not saved by works; but if there be no works, there must be something amiss with faith. Luther defines good works as those “works that flow from faith and from the joy of heart that has come to us because we have forgiveness of sins through Christ.” Luther taught a life under the cross, which is a life of discipleship of following after Christ. Our crosses though, do not save. They serve the neighbor. We are called to be neighbor to those around us.
* It's possible that the Twelve Tribes website took their article on Luther from here.