Source: http://tpgurus.wikidot.com/joseph-banister
Timestamp: 2019-04-20 10:31:47+00:00

Document:
Joseph R. Banister is a bit of a puzzle, because he is a former certified public accountant, and did work for the Internal Revenue Service, so he should know something about tax law, and yet he ended up buying into the tax protester craziness and quitting the IRS in 1999. He has since become one of the darlings of the tax protester cult and has frequently spoken at tax protester seminars and other events.
There is no law making anyone liable for the federal income tax.
Although Banister escaped criminal liability for his advice to Walter Thompson, the Office of Professional Responsibility of the U.S. Treasury moved to bar Banister from practice before the Internal Revenue Service because of his advice to Thompson and others. A hearing was held before an Administrative Law Judge, and Banister was disbarred from IRS practice, the ALJ finding that Banister had violated the rules for practice before the IRS by his "absolutely wrong" advice to his clients and by failing to file personal tax returns for 1999 through 2002. See IR-2004-5 (1/12/2004). Banister appealed the disbarment to the Secretary of the Treasury, who upheld the disbarment for the advice given to clients but held that there was insufficient evidence introduced at the hearing that Banister had enough income to require income tax returns for the years for which he failed to file returns. Banister filed a further appeal with the federal District Court, which granted the government's motion for summary judgment. Joseph R. Banister v. U.S. Dept. of the Treasury, No. 5:10-cv-02764-JW (U.S.D.C. N.D. Cal. 3/10/2011), aff'd, No. 11-15961 (9th. Cir. 11/8/2012).
Based on the Treasury action, the California Board of Accountancy revoked Banister's CPA license effective March 7, 2007. Banister appealed the decision to the California Court of appeals, and the court affirmed the decision of the Board of Accountancy. Banister v. California Board of Accountancy, No. C062435 (Ca. Ct. Apps. 3d Dist. 9/21/2010).
The IRS asserted a deficiency against Banister for the year 2002, and the Tax Court affirmed the deficiency, along with a penalty for failing to file a timely return. Joseph R. Banister v. Commissioner, T.C. Memo. 2008-201, No. 1356-06 (8/27/2008), aff'd, No. 09-70775 (9th Cir. 3/4/2011). The Tax Court decision confirms the claim during the IRS disbarment hearings (see above) that Banister had failed to file an income tax return for 2002 (among other years).
According to a petition filed in federal district court on June 18, 2008, Banister was investigated by the IRS to determine if he had been promoting false or abusive tax schemes. According to the petition, a "substantial" part of Banister's income over the last few years were payments to Banister by Robert Bernhoft, the lawyer who represented Banister in his criminal trial. Bernhoft himself was enjoined against promoting a tax protester scheme in 1999. The court issued an order directing Bernhoft to turn over to the IRS "[a]ny form, document or letter prepared by Joseph Banister" for Bernhoft, and "[a]ny correspondence (including e-mails)" between Banister and Bernhoft. United States v. Robert Bernhoft, 2009 TNT 208-18, No. 2:08-cv-00515-RTR (U.S.D.C. E.D. Wis. 10/28/2009).
On December 18, 2012, Banister filed another petition with the Tax Court. Joseph R. Banister v. Commissioner, No. 030500-12 (U.S.T.C.). On January 12, 2015, the Tax Court ruled that Banister was liable for a penalty of $25,000 under Internal Revenue Code section 6673(a)(1), for engaging in frivolous litigation. The Court ruled Banister's arguments — regarding his federal income taxes for years 2003 through 2006 — to be frivolous. For those years, Banister had tax deficiencies of $179,786.00, plus section 6651(a)(2) penalties for failure to timely pay of $44,946.50, plus section 6651(f) penalties for fraudulent failure to file of $130,344.86, plus section 6654 penalties for failure to timely pay installments of estimated income tax of $6,022.84. Banister v. Commissioner, T.C. Memo 2015-10 (2015). Banister appealed this decision to the U.S. Court of Appeals for the Ninth Circuit, but on November 21, 2016, the Court of Appeals (in case no. 15-71103) upheld the Tax Court decision. Banister took his case to the U.S. Supreme Court, but the Supreme Court rejected his petition on October 10, 2017 (case no. 17-338). In addition to the total of $386,100.20 in tax deficiencies and penalties listed above, Banister is also facing a penalty of $8,000 imposed by the Court of Appeals, for a total of $394,100.20 — plus interest.
Banister's known clients have not fared well in court. As noted above, Banister advised Walter "Al" Thompson and apparently encouraged him not to file tax returns or pay employment taxes, as a result of which Thompson was indicted, was convicted, and was sentenced to 6 years in Federal prison. In Banister's own criminal trial, he was represented by Robert Bernhoft, who also represented him in the IRS disbarment proceedings.

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