Joe Banister, IRS CID, No Law

[the inquirer]

Joseph Banister. was, as you know, a Special Agent with the Criminal Investigation Division of the Internal Revenue Service assigned to the San Jose, California office. He graduated top of his class from the Academy and went on to distinguish himself in the field. He also had a CPA license. He resigned from the IRS in 1999. The reasons that led to his resignation can be found in this letter that he sent:

Dear Friends:

Well, the day of reckoning has arrived. On February 11, 1999, in my capacity as a Special Agent and federal law enforcement officer sworn to support and defend the Constitution of the United States, I submitted a "preliminary report" to the Chief of the IRS Criminal Investigation Division for the Central California District. My report summarized my findings regarding allegations that the income tax and filing of federal income tax returns is voluntary, that the 16th Amendment was never ratified, and that income taxes are not used to pay for daily government operations.

In order to ensure that unnecessary and unwarranted delay would not occur, I requested that my report be forwarded to top officials in the IRS up to and including Commissioner Charles O. Rossotti, and I respectfully requested that the Commissioner or his designee respond to the evidence in my report within 30 days. Today, my Chief called me into his office and gave me a memorandum. The memorandum dated February 17th, 1999, read in part:

The Internal Revenue Service will not be responding to your request and will provide you with the necessary paperwork to tender your resignation. You will be placed on administrative leave effective upon receipt of this memorandum for a period of seven calendar days to consider what actions you wish to take.

I was told that officials at the highest levels of the Internal Revenue Service were consulted regarding a response to my report. Apparently, I have now joined the ranks of every other taxpayer who ever was ignored or otherwise rebuffed by the Internal Revenue Service when they petitioned the IRS for a reasonable explanation. The only conclusion that I can reach is that those officials thought it was better to rebuff my request and pass up a golden opportunity to prove my research wrong than to have to admit that so-called "tax-protesters" and other supporters of the U.S. Constitution have been right all along. Ironically, had the IRS taken the time to address my concerns, or perhaps perform the simple task of proving the allegations wrong, I would have gladly been their spokesman advising taxpayers not to fall for these untrue allegations for the rest of my career.

As the memorandum states, I have until Friday, February 26th, 1999, the day after the 86th anniversary of the alleged ratification of the 16th Amendment, to tender my resignation. This is certainly a sad day in my life. Although I was hoping for a better result, I learned today after over two years of investigation that the Internal Revenue Service is everything that the so-called "tax protesters" said it was; non-responsive, unable to withstand scrutiny, tyrannical, and agency oblivious to the rule of law and the U.S. Constitution.

May God help us all.

Joseph R. Banister

Several years later the IRS filed charges and had him prosecuted. United States of America v Joseph R. Banister. In his successful defense, his former supervisor was asked what kind of agent Joe Banister ("Joe") was. He stated that Joe was the best agent he ever had and that, if he had had 10 of him, that would have been all he needed for the district. When asked where in the law it says that ordinary Americans are required to file and pay income tax, he said he "couldn't remember" (and this from a man with 37 years in the IRS and CID, much of it as a supervisor). Even a traffic cop knows what law is violated when he writes a ticket and his supervisor should damn well know; especially, something as fundamental and basic as that.

Joe's report that he submitted to the IRS while an agent is available. You can search and probably locate how to get in touch with him. I would caution using work resources.

[Pottapaug1938]

Here's an easy way to find the answer yourself: simply type the name "Banister" in the "Search" box on the upper right of the page. You'll get links to every thread, on Quatloos, which mentions Joe Banister; and in short order you will realize that the guy has absolutely no idea what he's taking about, and has absolutely a zero record of success whenever he proffers his "wisdom" in court or elsewhere.

[The Observer]

Not to mention that Mr. Banister ended up with having his CPA license revoked and losing his right to represent taxpayers before the IRS. The loss of his license was upheld by the California Court of Appeals. Furthermore, Banister lost in Tax Court regarding his case that he was not liable for income tax, and lost on his appeal as well.

Doesn't sound to me like a person that whom you would want to contact, let alone listen to.

[wserra]

Joseph Banister. was, as you know, a Special Agent with the Criminal Investigation Division of the Internal Revenue Service assigned to the San Jose, California office.

True.

He graduated top of his class from the Academy

Proof? "I found it on the internet" isn't proof.

and went on to distinguish himself in the field.

Proof? "I found it on the internet" isn't proof.

He also had a CPA license.

"Had" is indeed the operative word.

He resigned from the IRS in 1999.

OK, it was thereabouts.

The reasons that led to his resignation can be found in this letter that he sent:
the income tax and filing of federal income tax returns is voluntary,

Proof? "Banister said so" isn't proof.

that the 16th Amendment was never ratified,

Proof? "Banister said so" isn't proof.

and that income taxes are not used to pay for daily government operations.

Proof? "Banister said so" isn't proof.

the Internal Revenue Service is everything that the so-called "tax protesters" said it was; non-responsive, unable to withstand scrutiny, tyrannical, and agency oblivious to the rule of law and the U.S. Constitution.

Proof? "Banister said so" isn't proof.

He stated that Joe was the best agent he ever had and that, if he had had 10 of him, that would have been all he needed for the district.

Proof? "I found it on the internet" isn't proof.

When asked where in the law it says that ordinary Americans are required to file and pay income tax, he said he "couldn't remember"

Proof? "I found it on the internet" isn't proof. After all, "the law [that] says that ordinary Americans are required to file and pay income tax" is trivial to find for anyone who is actually looking for it.

Are you getting the picture?

[LPC]

See http://tpgurus.wikidot.com/joseph-banister

And he's got a new case pending in Tax Court, so we may be looking forward to another loss in court.

[LPC]

Several years later the IRS filed charges and had him prosecuted. United States of America v Joseph R. Banister. In his successful defense,

Banister was prosecuted for conspiring to evade taxes with a client, Al Thompson, and the jury acquitted Banister, meaning that the government was right about the law but failed to prove the necessary facts beyond a reasonable doubt.

Thompson himself was also charged with conspiracy, as well as tax evasion. In a separate trial with a different jury, Thompson was also acquitted on the conspiracy charge, but convicted on the evasion charges.

So Banister gave bad advice, his client went to jail, and he went free.

What's your point?

[fortinbras]

Banister (I must remember to spell it with only one N) lost his CPA license in California because of his disbarment by the IRS which related to his qualifications and fitness as an accountant.

Banister sued to regain his license and lost,
Joseph R. Banister v. California Board of Accountancy (Cal.App., Sept 21, 2010) not published, 2010 WL 3639303, 2010 cal.app.unpub. LEXIS 7457.
Petition for review denied,
... (Cal.Supm., Dec. 15, 2010) not published, no opinion.
Certiorari denied,
... (US Supm, April 18, 2011) _US_, 131 S.Ct 2127, 179 L.Ed.2d 895.

He had already lost his own tax case:
Banister v. C.I.R. (US Tax Ct, Aug. 27, 2008) T.C. Memo 2008-201,
aff'd ... (9th Cir., March 4, 2011) 418 Fed.Appx 637, 107 AFTR2d 1156, 2011-1 USTC ¶ 50257.

and continued that string:
Banister v. US Dept of the Treasury (9th Cir., Nov. 23, 2012) 110 AFTR2d 6794, 2012-2 USTC ¶ 50680.

In a couple of other cases, tax dodgers tried to defend themselves by referring to Banister's publications, either to show that their tax avoidance was proper or at least that it was based on the advice of an expert, but it didn't help them.

[.]

Loss after loss after loss after loss after loss.

Perhaps a modicum of firing synapses rejected the armed stand-off response.

[notorial dissent]

Re: Banister, Joseph.... We do know for a fact that he was a CPA, how good remains in the questionable category although apparently competent enough to have gotten through school and been licensed, by virtue of the fact that he got his ticket officially and publicly pulled for his shenanigans. That he was “a Special Agent with the Criminal Investigation Division, graduated top of his class, and went on to distinguish himself in the field” , or that he was fired based on a letter he sent, is based on what? He told us so? That he apparently worked for the IRS, and got fired/asked to resign seems to be fact, the rest I don’t think so!!!

I’m sorry, I have a very hard tome believing that someone with the above credentials and supposedly such a “star” agent would not know the positions he was spouting were the veriest of BS, or the mind set and bureaucracy of the IRS to the point of not knowing how sending such a letter would end result.

Since when has Joe Bannister ever been a fountain of veracity?

As far as his successes in court, I think they can be found on one finger, when he didn’t get nailed for helping a client conspire to avoid taxes, and then only because he got lucky, otherwise, he is zip all.

[Dezcad]

Here's the recent opinion from the 9th Circuit. Banister was wrong on every position he took.

UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
JOSEPH R. BANISTER,
Plaintiff - Appellant,
v.
UNITED STATES DEPARTMENT OF
THE TREASURY; TIMOTHY F.
GEITHNER, in his official capacity as
Secretary of Treasury,
Defendants - Appellees.

No. 11-15961

D.C. No. 5:10-cv-02764-JW

MEMORANDUM*
Appeal from the United States District Court for the Northern District of California
James Ware, District Judge, Presiding

Submitted November 8, 2012**
San Francisco, California

Before: FARRIS, FERNANDEZ, and BYBEE, Circuit Judges.

U.S. COURT OF APPEALS

Plaintiff-Appellant Joseph R. Banister appeals from the decision of the United States District Court for the Northern District of California affirming the Secretary of the Treasury’s decision to disbar Banister from practice before the Internal Revenue Service (IRS). Banister admitted to advising clients that they were not liable for income taxes based on his belief that the Sixteenth Amendment was not properly ratified and his understanding that Section 861 of the Internal Revenue Code, 26 U.S.C. § 861, and the regulations thereunder (“Section 861”) exempted the clients from having to pay income taxes. He also admitted to signing a client’s tax returns as the returns’ preparer when the returns stated that the client was not liable for income taxes under Section 861. We have jurisdiction pursuant to 28 U.S.C. § 1291. We affirm.

Banister alleges first that the administrative law judge (ALJ), in a decision upheld by the Secretary of the Treasury, erred in determining that Banister’s conduct was willful, and disregarded evidence that was relevant to this determination. We find no error. Even if a good faith belief in an incorrect understanding of tax law can serve as a defense to an allegation of willfulness in this context, it was not error to determine that Banister’s violations were willful.
Banister is correct that, in Cheek v. United States, the Supreme Court rejected the view that “a good-faith misunderstanding of the law or a good-faith belief that one is not violating the law, if it is to negate willfulness, must be objectively reasonable.” 498 U.S. 192, 201 (1991). But the Court went on to distinguish between “innocent mistakes caused by the complexity of the Internal Revenue Code,” on the one hand, and positions that “reveal full knowledge of the provisions at issue and a studied conclusion, however wrong, that those provisions are invalid and unenforceable,” on the other. Id. at 205. With regard to the latter category, the Court held that “a defendant’s views about the validity of the tax statutes are irrelevant to the issue of willfulness.” Id. at 206. Violating a tax statute because one believes the statute is invalid constitutes a“refus[al] to utilize the mechanisms provided by Congress to present . . . claims of invalidity,”and the state of mind behind such a refusal does not offer a defense to willfulness. Id. Banister’s position that the Sixteenth Amendment was not properly ratified is a belief about the validity of the tax statutes, and therefore, it is irrelevant to the question of willfulness whether or not he held this belief in good faith. All the government needed to show was that Banister “refuse[d] to utilize the mechanisms provided by Congress” to present his claims. Id. The government has shouldered this burden. Therefore Banister “is in no position to claim that his good-faith belief about the validity of the [Sixteenth Amendment] negates willfulness.” Id.

Banister’s Section 861 position is “a case in which there is no claim that the provision at issue is invalid,” and therefore the government must show that, despite his professed beliefs, Banister was “aware that the law impose[d] a duty upon him” and did not simply make “an innocent mistake[].” Id. at 201–02, 205. In this context, Banister reads Cheek’s prohibition against considering the reasonableness of a professed good-faith belief too broadly. Cheek only narrowly prohibited the judge from “[c]haracterizing a particular belief as not objectively reasonable” and “transform[ing] the inquiry into a legal one,” taking the issue away from the finder of fact. Id. at 203. Here, the ALJ also functioned as factfinder, and so under Cheek was free to consider the reasonableness of the asserted beliefs and “consider them to be nothing more than simple disagreements with known legal duties imposed by the tax laws.” Id. at 203-04.

As Banister’s extensive research into Section 861 surely revealed, his position has been universally dismissed by our court system. See, e.g., Solomon v. Comm’r, 66 T.C.M. (CCH) 1201 (1993) (finding a taxpayer’s tax avoidance argument was “not bolstered by the regulations under section 861,” and sanctioning the taxpayer for making frivolous arguments including the Section 861 argument offered by Banister), aff’d by unpublished order, 42 F.3d 1391 (7th Cir.1994). We view this universal dismissal of Banister’s Section 861 position, coupled with his experience at the IRS and extensive research, as clear evidence that Banister’s Section 861 position is a “simple disagreement[] with known legal duties” and not merely an “innocent mistake[],” thus undermining his claim regarding good-faith belief. The ALJ therefore did not err in rejecting this position as unreasonable and finding that Banister committed willful violations.

Banister also alleges that the ALJ erred and violated his due process rights by (1) finding the IRS pleadings sufficiently particularized; (2) denying Banister’s discovery requests; (3) denying Banister an evidentiary hearing on the merits and granting summary judgment; (4) prohibiting Banister from testifying; (5) denying Banister’s right to cross-examine the witnesses against him; and (6) excluding allegedly exculpatory witness testimony. None of these assertions have merit. With regard to the IRS pleadings, the complaint satisfied the requirements set out in 31 C.F.R. § 10.62 [FN1] providing Banister with an opportunity to prepare a defense by specifying the facts and law constituting the basis for the proceeding.

Banister admitted to conduct that qualifies as disreputable behavior under 31 C.F.R. § 10.50, rendering him eligible for disbarment under 31 C.F.R. § 10.70. Specifically, by advising clients that they did not have to pay taxes based on positions that he could not in good faith have believed to be consistent with the law, Banister violated 31 C.F.R. §§ 10.51(d), 10.51(j), 10.22(b), and 10.22(c). By signing a client’s tax returns as preparer even though he knew the positions advanced in support of the returns did not have a realistic possibility of being
sustained and were frivolous, Banister also violated 31 C.F.R. § 10.34. In light of Banister’s admissions, there were no material facts in dispute, and the legal conclusions were apparent based on the settled facts. Summary judgment was thus wholly appropriate, and no evidentiary hearing was needed. With the material facts settled, the ALJ did not err by refusing to grant extraneous requests for discovery, witness testimony, or cross-examination.

AFFIRMED.

[FN1] Many of the regulations in Title 1 31, Subtitle A, Part 10 of the Code of Federal Regulations, also known as “Circular 230,” were revised in July 2002 and then again in September 2007. Under the savings provision of the September 2007 revised regulations, 31 C.F.R. § 10.91, the September 2007 revisions have no impact on Banister’s case because both the conduct in question and the institution of the proceedings occurred prior to September 26, 2007. Under the savings provision of the July 2002 revised regulations, 31 C.F.R. § 10.91, only Subparts D and E, respectively covering 31 C.F.R. §§ 10.60 through 10.82 and 31 C.F.R. §§ 10.90 through 10.93, of the July 2002 revised regulations apply to Banister’s case because the conduct in question occurred prior to July 26, 2002 but the proceedings were not instituted until after that date. All citations in this disposition to sections of Circular 230, other than citations to Subparts D and E, refer to the regulations in effect prior to the July 2002 revisions. Citations to Subparts D and E refer to the July 2002 revised regulations.

[LaVidaRoja]

Banister's latest Tax Court endeavor is out today. 2003-2006, civil fraud (fraudulent failure to file!) on all years, PLUS $25,000 for continued frivolous positions!!

T.C. Memo 215-10.

[fortinbras]

Here it is:

http://www.ustaxcourt.gov/InOpHIstoric/ ... CM.WPD.pdf

[Edited by LPC to update link]

[Famspear]

Lost his CPA license over this idiocy. Former IRS special agent. Of all the people in the world, this guy should know better.

He is a disgrace.



(sigh...)

For the record:

For years 2003 through 2006:

-----1. Tax deficiencies of $179,786.00.

-----2. Sec. 6651(a)(2) penalties for failure to timely pay: $44,946.50.

-----3. Sec. 6651(f) penalties for fraudulent failure to file: $130,344.86.

-----4. Sec. 6654 penalties for failure to timely pay installments of estimated income tax: $6,022.84.

-----5. Sec. 6673(a)(1) penalty: $25,000.00.

Banister v. Commissioner, T.C. Memo 2015-10, docket # 030500-12 (January 12, 2015).

[LaVidaRoja]

Not to mention accrued interest. What's next? Wait 180 days after the assessments and try to BK?

[Paths of the Sea]

Dan Dibondi is on the air and after the break currently playing he has promised to play the interview with Kent Hovind recorded earlier today.

Dan started his show today, about 30 minutes ago, extolling the virtues of Joe Banister; possibly being unaware of today's decision from the Tax Court, or earlier defeats Joe brought upon himself.

Link to Dan's show:

http://www.freedomizerradio.com/listen-live/

---------------------

[jcolvin2]

Not to mention accrued interest. What's next? Wait 180 days after the assessments and try to BK?

There is case law to the effect that late filed returns do not qualify for bankruptcy relief. See McCoy, 666 F.3d 924 (5th Circuit); Mallo v. IRS, (10th Circuit; opinion filed December 29, 2014). Nevermind the fact that the Tax Court found that the failure to file in this case was fraudulent for tax purposes (and thus likely fraudulent for bankruptcy purposes as well).

[LaVidaRoja]

IF Joe were to try BK, I believe he at least could possibly make a non-friv argument that civil fraud is NOT the same as criminal fraud for discharge purposes. However, I haven't researched Bankruptcy law in a long, long time

[Famspear]

IF Joe were to try BK, I believe he at least could possibly make a non-friv argument that civil fraud is NOT the same as criminal fraud for discharge purposes. However, I haven't researched Bankruptcy law in a long, long time

I believe that the tax would be non-dischargeable if the individual made a fraudulent return (criminal or civil fraud), or if the individual willfully attempted in any manner to evade or defeat the tax.

On a side note: Under the tax evasion statute (26 USC 7201), there must be an affirmative act in order for the individual have made an "attempt" as that word is used in the statute. For example, a mere failure to file -- even if willful -- is not deemed to be an affirmative act.

By contrast, for bankruptcy discharge purposes (11 USC 523(a)(1)(C)), no affirmative act is required in order to have an "attempt" to evade or defeat the tax. A failure to file could make the tax non-dischargeable.

This is so, even though the words of the two statutes are very similar.

[notorial dissent]

So, for those of us playing the home version, and not completely up to date on the wild and wooleys of Banister, does this mean that he finally got caught using his own methods on his own taxes?

[.]

Tax $180K

Penalties:
§6651(a)(2) $45K
§6651(f) $130K
§6654 $6K
§6673(a)(1) $25K

I do recall Banister saying something many years ago about putting the cash he wasn't paying in taxes into a bank account. Sort of an "escrow" in his own mind.

Perhaps he thought it would contribute to the illusion that he was pursuing legitimate, principled positions instead of a bunch of frivolous nonsense. Look at me! I'm different. I'm too stupid to file and pay when I should have, but I'm ready to pay if I'm wrong. I'm smarter than your garden-variety TP.

Too bad about all those penalties that turned 180K into 386K. Ouch.

But, perhaps 206K in penalties is better than 2 or 3 years in prison. Or maybe not. Victory because no prison time? Or just another slightly more sophisticated version of delusion and stupidity? Expensive, any way you slice it.