Banister, Joe

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Joey Smith
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Banister, Joe

Postby Joey Smith » Wed Mar 07, 2007 4:25 am

Tuesday, February 06, 2007
Posted 9:14 PM by Joe Comment (1) | Trackback


FORMER IRS SPECIAL AGENT & WHISTLEBLOWER REQUESTING YOUR HELP

From : Joe Banister
Sent : Tuesday, February 6, 2007 10:48 AM
To : List
Subject : FORMER IRS SPECIAL AGENT & WHISTLEBLOWER REQUESTING YOUR HELP

FREEDOM ABOVE FORTUNE NEWS

FORMER IRS SPECIAL AGENT & WHISTLEBLOWER REQUESTING YOUR HELP

Dear Friends:

It has been quite some time since I have provided you with an update of my
situation. There have been developments that I would like to share with you.

Thankfully, I am in good health and good spirits thanks to God’s blessings. It
is hard to believe that it has been nearly 8 years since my resignation from the
IRS Criminal Investigation Division and over a year and a half since I was
acquitted of all charges in a Sacramento, California federal courtroom
(http://www.americanfreepress.net/html/f ... lower.html ).

Not surprisingly, the income tax enforcement apparatus has not lightened up one
bit on its mission to silence and discredit yours truly. Apparently putting me
behind bars was the “icing” on the income tax enforcement apparatus’ “cake” but
since they didn’t get to eat the icing, they’ll settle for the cake. I need to
give you a little bit of background to help you understand my current situation,
so bear with me as I provide a summary.

You may recall from previous battle stories I have shared with you the saga of
my “disbarment” from “practice” before the IRS. (I routinely put “disbarment”
in quotes because I never applied to be a member of any IRS “bar”. I never
applied because the IRS has never had a “bar”. Thus, dis-“bar”-ing me is not
even an appropriate term – but it sounds really bad so the IRS is more than
happy to use it anyway.) The IRS “disbarment” saga began with allegations
leveled by the IRS (not the clients!) that I had engaged in “disreputable”
conduct in connection with assistance rendered to two clients by allegedly
giving “false opinions” to those clients that had “no basis in law or fact”.
Allegations were added later that I had also engaged in additional
“disreputable” conduct by failing to file income tax returns for 1999, 2000,
2001 and 2002.

When such allegations are leveled against someone, at least in this country,
that person is supposed to be provided, consistent with the “innocent until
proven guilty” and “due process of law” themes coursing throughout American law,
many levels of appeal to test the legitimacy of the allegations. Unfortunately,
our government often ignores these themes and routinely attempts to bypass the
levels of appeal and my IRS “disbarment” case was no exception.

Despite the fact that the law called for a hearing as my first level of appeal,
which would have been my “day in court”, so to speak, to defend myself against
the allegations of “disreputable conduct”, Administrative Law Judge (ALJ) Moran
ruled that a hearing would not be given to me and a “sanction” (punishment)
proceeding would take place instead. Soon after, ALJ Moran ruled that the
record showed I had indeed engaged in “disreputable conduct”. ALJ Moran’s
ruling was not too surprising given that the absence of a hearing meant I was
refused the opportunity to get my side of the story (documents, witness
testimony, etc.) into the record or to cross-examine my IRS accusers – The
“disbarment” process was a sham and a “railroad”. You can read more about this
at http://joebanister.blogspot.com/2004_01 ... chive.html .

You may also recall that I appealed ALJ Moran’s “disbarment” ruling to the
Secretary of the Treasury, John Snow, and, incredibly, Secretary Snow delegated
his decision-making authority regarding my appeal to a high-ranking attorney at
the IRS. Not surprisingly, the high-ranking attorney at the IRS ruled against
me. Yet another sham and “railroad” whereby my IRS accusers even served as the
arbiters of my appeal.

I was preparing to appeal the above-described “railroading” when, in November of
2004, I learned that I had been indicted on four felony charges. As those of
you who have been following my story since 2004 or earlier know, defending
myself against the felony charges was a horrendous undertaking, as I often would
relate in various email updates. All of my time and effort as well as all of
the generous spiritual and financial support I received from so many of you had
to be devoted to defense against the felony charges – I never could “come up for
air” long enough to appeal the “disbarment” debacle. It’s a shame that I had to
face prison in order to finally have a jury of 12 of my peers evaluate my
conduct – as opposed to past evaluations performed by biased IRS bureaucrats and
administrative law judges – but not surprisingly those peers recognized that I
was innocent and acquitted me of the felony charges leveled against me.

The stinging defeat suffered by the income tax enforcement apparatus barely
slowed them down. My hopes for a little time to breathe after having survived a
full court press to imprison me were dashed when the California Board of
Accountancy (CBA), the agency that oversees Certified Public Accountants
(“C.P.A.s”) like me, which had already been investigating me in connection with
the IRS “disbarment” debacle, stepped up their efforts to revoke my “C.P.A.”
license using the IRS “disbarment” as the pretext for doing so. The IRS also
stepped up their civil inquiries into my personal affairs.

Now that I have brought you up to date – here is where I stand. The California
Board of Accountancy (CBA) has just issued a decision that my “C.P.A.” license
be revoked. The CBA is basing their decision solely on the results of the IRS
“disbarment”, which you and I know was a sham but the CBA could care less. My
unblemished fifteen year record as a “C.P.A.” is meaningless to the CBA as well.
The income tax enforcement apparatus simply cannot afford to have a credible
person who happens to be not only a former IRS criminal investigator but a
“C.P.A.” believing what I believe and saying what I say.

I am telling you all of this because I once again need your help. I only have a
small window of opportunity to appeal both the IRS disbarment and the revocation
of my C.P.A. license. Robert Bernhoft and his firm have never abandoned me and
they don’t intend to now but representing me has been a huge financial burden
for them. Significant work will be necessary but neither the Bernhoft firm nor
I are equipped to move forward without your prayers and financial support.

I want you to know that this next round of appeals is about much more than my
personal or professional circumstances. There are many indications that the
IRS, the U.S. Department of Justice, state taxing agencies and state licensing
agencies (like the California Board of Accountancy) and other bureaucracies are
partnering together to “hammer” and starve Americans into submission regarding
their alleged income tax obligations and to destroy the professional career of
any professional who comes to their aid. It is hard enough for the average
American to defend themselves against the IRS but imagine how hard it will be
when professionals are too fearful of losing their livelihood to aggressively
defend you or, worse, fearless professionals can’t come to your aid even if they
wanted to because their license or other certification has been revoked or is in
danger of being revoked.

As far as I know, my case is early enough and public enough that an appeal would
reap significant rewards even if I am not successful in restoring the license
and professional reputation that the IRS has stolen from me. At a minimum,
being able to appeal my IRS “disbarment” and the “C.P.A.” license revocation
will enable me to gather significant information (through “discovery”) that will
likely expose some of the backroom deals and illegal activity that we all
surmise must be going on – and I will be able to share all of that information
with you as the cases progress.

I am sorry that I must reach out to you again. Besides the strength that God
gives me to persevere, your help over these last 8 years has been the key to my
success. The income tax enforcement apparatus gangs up on everyone it targets
and, sadly, it is extremely difficult and rare to survive such an attack. Your
assistance enables me to access the spiritual and financial resources of
thousands of people and helps to even the odds at least a little bit.

Please consider helping me once again. Donations can be made payable to “Joseph
Banister Legal Defense Fund” and mailed to 1805 N. Carson Street #188, Carson
City, Nevada 89701. Don’t forget to visit
http://www.ninehundred.net/banister/donation.html
and follow the instructions if you would like a thank you gift sent to you.
Donation forms should be used only by those who wish to receive a free gift –
suggested donation amounts are on the form. If no form is submitted, it will be
presumed that you are donating without desire for a free gift.

I wish to sincerely thank each and every person who has ever helped me. A
number of you have continued to support my efforts financially even during
periods when I have not formally asked for help, which is deeply appreciated
since I don’t always ask for help even though the need for help never fully
subsides.




***********

-For those who have received this message as a forward from someone else, you
can sign up to receive these messages directly by visiting
http://www.freedomabovefortune.com and clicking on "Mailing List".

-For those who are unfamiliar with what has transpired to date in this case,
especially the recent acquittal on all charges leveled against me, please visit
http://www.ninehundred.net/banister/ , http://www.joebanister.blogspot.com and
http://www.freedomabovefortune.com (click on "IRS LOCKOUT UPDATE"). You can also find
archives of informative radio shows at http://www.hearliberty.com .

-Prayers in support of this effort are always welcomed and encouraged.
Contributions to my legal defense fund are also welcomed due to the significant
costs of defending against multiple and continuing IRS attacks. Checks or money
orders are gratefully accepted and can be made payable to "Joseph Banister Legal
Defense Fund", and mailed to 1805 N. Carson Street, #188, Carson City, Nevada
89701. Money orders may provide a greater degree of privacy to the donor than
checks so use your own discretion based on the degree of privacy you desire.

-Visit http://www.ninehundred.net/banister for more information as to how you
can obtain information about my recent trial and contribute to my legal defense
fund at the same time.

-My sincere thanks to those who have prayed for the success of our efforts
and/or contributed to my legal defense fund. Your continued support is enabling
me to illustrate, in detail and in a very public manner, that the IRS does not
prevail against citizens because the agency adheres to the rule of law, but that
the IRS prevails against citizens because the agency ignores the law, twists the
meaning of the law, and overwhelms the citizen with economic and legal burdens.
In a school yard, such tactics are called "BULLYING". In a government setting,
such tactics are called "TYRANNY". This effort is the equivalent of ganging up
on the bully and sending him to reform school where he belongs.

***********

Kind regards,

Joseph R. (Joe) Banister
Former IRS Criminal Investigation Division Special Agent
http://www.freedomabovefortune.com http://www.joebanister.blogspot.com

II Chronicles 7:14:

And my people, upon whom my name is called, being converted, shall make
supplication to me, and seek out my face, and do penance for their most wicked
ways: then will I hear from heaven, and will forgive their sin and will heal
their land.

George Orwell, 1984:

"You are a slow learner, Winston," said O'Brien gently.

"How can I help it?" he blubbered. "How can I help seeing what is in front of my
eyes? Two and two are four."

"Sometimes, Winston. Sometimes they are five. Sometimes they are three.
Sometimes they are all of them at once. You must try harder. It is not easy to
become sane."


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Demosthenes
Grand Exalted Keeper of Esoterica
Posts: 5773
Joined: Wed Jan 29, 2003 4:11 pm

Postby Demosthenes » Sun Mar 18, 2007 1:42 pm

-----Original Message-----
From: Freedom Above Fortune [mailto:automailer@freedomabovefortune.com]
Sent: Saturday, March 17, 2007 7:04 PM
Subject: LATEST DEVELOPMENTS REGARDING CPA LICENSE REVOCATION PROCEEDINGS AGAINST FORMER IRS SPECIAL AGENT

FREEDOM ABOVE FORTUNE NEWS

LATEST DEVELOPMENTS REGARDING “CPA” LICENSE REVOCATION PROCEEDINGS AGAINST FORMER IRS SPECIAL AGENT

Dear Friends:

As I recently informed you, the California Board of Accountancy ( “CBA” ) issued its January 26th, 2007 decision that my Certified Public Accountant “CPA” license be revoked ( http://www.joebanister.blogspot.com 02/06/07 entry ). With the assistance of my dedicated legal team, I submitted a “Petition For Reconsideration” on February 16th, 2007 in answer to the CBA revocation decision. The “Petition For Reconsideration”, if granted, provides for a 10 day period in which the CBA can decide whether to order reconsideration of the revocation decision. On February 21, 2007, the CBA issued an “Order Of Stay Of Execution Of Decision”, which means that the CBA will, indeed, decide whether to order reconsideration of the revocation decision.

Given the lack of the CBA’s concern for any of the defenses and arguments I have made, I highly doubt that they will reconsider the revocation but we must at least attempt this remedy before moving forward with the next step. You can review the latest documents by visiting http://www.ninehundred.net/banister and clicking on the “Documents Relating To The California Board of Accountancy” link at the top left of the page.

I neglected to mention in prior announcements one of the punishments that resulted from this “CPA” license revocation matter. There is a provision in the California Business and Professions Code that allows the CBA to seek reimbursement of “investigation and prosecution” costs. The CBA is using this provision to demand that I pay $6,628.77 for such costs. If I end up having to pay the cost of this railroading I have received, I guess that’s the way it will have to be – kind of like the dictator’s ministers who send a bill to the loved ones of a firing squad victim for the bullets that were used to do the job. If there is anyone out there who agrees that (1) the CBA railroaded me just like the IRS did in the so-called “disbarment” proceedings and (2) that I am basically having to pay for the “privilege” of being railroaded and (3) would like to help me to shoulder these costs, any assistance would be very much appreciated. Anyone who can help in this regard should let me know in a note that their contribution is for this particular purpose so that I know how the contribution may be spent.

Lastly, unless and until my appeals are successful sometime down the road, for the foreseeable future I can no longer refer to myself as a “Certified Public Accountant” or “C.P.A.” and I apparently even have to be careful about calling myself an “accountant” or telling people that I do “accounting” (apparently any reference to being an “accountant” or doing “accounting” must be accompanied by a disclaimer that I am not licensed by any government agency – if I use those terms at all).

If, despite all of these “scarlet letters” that have been pasted to my chest, there is anyone who believes the accumulated knowledge and past experiences of a former IRS Special Agent and now former CPA would be of use to them (at least knowledge and past experiences can't be taken away from me), or that my new “bookkeeper” status :) would be of benefit to them, feel free to send an email inquiry by using my http://www.josephbanister.com website. For added privacy, an “old fashioned” letter expressing a desire for my consulting or record keeping services can be mailed to 1805 N. Carson Street, Suite C, Carson City, Nevada 89701 (using my Carson City address as a return address on your envelope for added privacy). If you write, please provide an email address (if you have one) and telephone contact information.

I again would like to convey my deepest gratitude to everyone who has supported me during these last eight years and continues to support me. I imagine this will go on for quite a while longer so please stay by my side.

I will provide more information as developments occur.

Famspear
Knight Templar of the Sacred Tax
Posts: 7209
Joined: Sat May 19, 2007 1:59 pm
Location: Texas

Postby Famspear » Wed Oct 31, 2007 3:50 pm

This guy is something of a riddle.

I am just curious as to why we don't hear more about this guy. Although he was acquitted in connection with someone else's taxes (Walter A. Thompson), I haven't heard anything about Banister being in any kind of hot water (either civilly or crminally) about his own Federal income taxes.

Of course, he could be filing his own tax returns and paying his own taxes.

If he is not filing his own returns and paying his own taxes, he could be somewhere in the system and I would not hear about it until it hits the courts, etc.

Has anybody heard anything about this guy that's not already mentioned above, especially as far any personal Federal income tax problems he might be having, if any?
...why is anyone in this [losthorizons] community paying the least attention to...'Larry Williams' [Famspear], or other purveyors of disinformation from...quatloos? – Pete Hendrickson, former inmate 15406-039, Fed’l Bureau of Prisons

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Doktor Avalanche
Asst Secretary, the Dept of Jesters
Posts: 1767
Joined: Thu May 03, 2007 11:20 pm
Location: Yuba City, CA

Postby Doktor Avalanche » Sun Nov 25, 2007 11:51 pm

Famspear wrote:This guy is something of a riddle.

I am just curious as to why we don't hear more about this guy. Although he was acquitted in connection with someone else's taxes (Walter A. Thompson), I haven't heard anything about Banister being in any kind of hot water (either civilly or crminally) about his own Federal income taxes.

Of course, he could be filing his own tax returns and paying his own taxes.


You just hit the nail on the head, friend Famspear.

Joe Banister does file and does pay income taxes. He's even admitted as much on national television. This is why he continually gets away with it.

Do as I say, not as I do.

I suspect two things about him: he is either a plant for the IRS to smoke out TPs or he's figured out that selling anti-tax "solutions" is far more lucrative than his career at the IRS CID.

I'm leaning heavily toward he's only in it for the money.

I've pointed out this fact to the folks over at YouTube where Aaron Russo's "Freedom To Fascism" video is prominently displayed who believe this guy is the Second Coming. They have ignored it, dismissing me as a agent of the IRS.
The laissez-faire argument relies on the same tacit appeal to perfection as does communism. - George Soros

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Demosthenes
Grand Exalted Keeper of Esoterica
Posts: 5773
Joined: Wed Jan 29, 2003 4:11 pm

Re: Banister, Joe

Postby Demosthenes » Mon Apr 06, 2009 11:37 pm

Banister's Tax Court case:

T .C . Memo . 2008-201
UNITED STATES TAX COURT
JOSEPH R . BANISTER, Petitioner v .
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No . 1356-06 . Filed August 27, 2008 .
P failed to report certain interest and distribution
income that he received in 2002 . R determined a deficiency
and additions to tax pursuant to secs . 6651(a)(1) and (2)
and 6654(a), I .R .C .
Held : P is liable for the deficiency and the addition
to tax pursuant to sec . 6651(a)(1), I .R .C . P is not liable
for the additions to tax pursuant to secs . 6651(a)(2) and
6654(a), I .R .C .
Joseph R . Banister, pro se .
David Sorensen and Wesley J . Wong , for respondent .
SERVED Aug 27 2008
- 2 -
MEMORANDUM FINDINGS OF FACT AND OPINIO N
WHERRY, Judge : This case is before the Court on a petition
for redetermination of an alleged $4,551 deficiency in Federal
income tax and additions to tax that respondent determined for
petitioner's 2002 tax year . Respondent conceded before trial
that petitioner is not liable for an addition to tax under
section 6651 (a) (2) .' The issues remaining for decision are :
(1) Whether petitioner was required to include in his 2002
taxable income a $23,325 distribution from a qualified retirement
plan and $387 of interest income ;
(2) whether petitioner is liable for the 10-percent
additional tax under section 72(t) on an early distribution from
a qualified retirement plan ;
(3) whether petitioner is liable under section 6651(a)(1)
for a $1,023 .97 addition to tax ; and
(4) whether petitioner is liable under section 6654(a) for a
$152 .05 addition to tax .
FINDINGS OF FACT
Some of the facts have been stipulated, and the stipulated
facts and accompanying exhibits are hereby incorporated by
reference into our findings . Using third-party paye r
'All section references are to the Internal Revenue Code of
1986, as amended and in effect for the tax year at issue . The
Rule references are to the Tax Court Rules of Practice and
Procedure .
- 3 -
information, respondent concluded that petitioner had received a
$23,325 distribution from an individual retirement account (IRA)
and $387 of interest income . Respondent issued the notice of
deficiency on October 17, 2005 . Petitioner filed a timely
petition with this Court on January 17, 2006, and filed an
amended petition on March 9, 2006 . Petitioner resided in Nevada
when he filed the petition and the amended petition . A trial was
held on November 6, 2007, in Reno, Nevada .
OPINION
I . Whether Petitioner Had Unreported Income
Generally, the Commissioner's determination of a deficiency
is presumed correct, and the taxpayer has the burden of proving
it wrong . See Rule 142(a) ; Welch v . Helvering , 290 U .S . 111, 115
(1933) . In unreported income cases, however, the presumption of
correctness does not attach unless the Commissioner first
establishes a minimal evidentiary foundation for the deficiency .
See Weimerskirch v . Commissioner , 596 F .2d 358, 360-362 (9th Cir .
1979), revg . 67 T .C . 672 (1977) .
In Weimerskirch , the Court of Appeals for the Ninth Circuit
imposed the evidentiary foundation requirement in light of the
Commissioner's unsupported assertion that the taxpayer had earned
$30,000 selling illegal drugs . Id . at 362 . The Commissioner
sought to include that amount in the taxpayer's income but did
not present any evidence linking the taxpayer to the illegal
- 4 -
sales or reflecting the amount of proceeds the taxpayer actually
received . Id . at 361-362 . The Court of Appeals refused to allow
the presumption of correctness to attach, emphasizing the
unfairness that would result if the Commissioner were allowed to
affix the prejudicial label of drug dealer on the taxpayer
without any evidence to support it . Id . at 362 .
This is not to say that the requirement in Weimerskirch is
difficult to satisfy . The requisite evidentiary foundation is
indeed minimal and need not include direct evidence linking the
taxpayer to an income-producing activity . See Rapp v .
Commissioner , 774 F .2d 932, 935 (9th Cir . 1985) ; Curtis v .
Commissioner , T .C . Memo . 2001-308, affd . in part and revd . on
another issue 73 Fed . Appx . 200 (9th Cir . 2003) .
In Rapp , the Court of Appeals held that the Commissioner had
satisfactorily linked the taxpayers to income-producing
activities--including employment, the sale of their home, and
involvement with a business--where the record contained only the
notices of deficiency, summonses to banks and other third
parties, and other documents prepared by the Commissioner . Rapp
v . Commissioner , supra at 935 . That evidence suggested that the
Commissioner possessed direct evidence linking the taxpayer to
the income-producing activities even if that direct evidence was
not itself in the record . Id .
- 5 -
Further, the taxpayers did not dispute their alleged
connection to the income-producing activities and argued only
that the Commissioner did not consider "legitimate and proper
deductions ." Id . The Court of Appeals concluded that the link
between the taxpayers and the income-producing activity had been
"sufficiently acknowledged to permit the presumption of
correctness to attach to the Commissioner's determination ." Id .
Assuming Weimerskirch applies in this case despite the fact
that petitioner's alleged income was not derived from an illegal
activity,' we conclude that respondent has established,a minimal
evidentiary foundation linking petitioner with the IRA
distribution and interest income at issue . Specifically, the
notice of deficiency indicates that the third-party payers paid
petitioner the amounts in question and reported those payments to
respondent . Although direct evidence of the payments is not in
the record, the notice of deficiency alone suggests, as in Rapp
and Curtis , that respondent possessed such evidence .
2It appears that the Court of Appeals has extended its
holding in Weimerskirch v . Commissioner , 596 F .2d 358, 360-362
(9th Cir . 1979), revg . 67 T .C . 672 (1977), to cases involving
income derived from legal activities . See Palmer v . IRS , 116
F .3d 1309, 1313 (9th Cir . 1997) ; Rapp v . Commissioner , 774 F .2d
932, 935 (9th Cir . 1985) . But see Hardy v . Commissioner , 181
F .3d 1002, 1005 (9th Cir . 1999) ("But even if we were to extend
Weimerskirch to all unreported income cases as the Third and
Fifth Circuits have done, the exception only applies when the
Commissioner has failed to provide any evidentiary foundation for
the deficiency notice ."), af,fg . T .C . Memo 1997-97 .
- 6 -
In addition, petitioner does not deny receiving the income
and instead argues that respondent "failed to recognize,
determine and/or make allowance-for Petitioner expenses, losses
and deductions, and exclusions (both business and non-business) ."
We view that position as an implicit acknowledgment that he
received at least some income during his 2002 tax year . See Rapp
v . Commissioner , supra at 935 ; Curtis v . Commissioner , supra
("Also, as in Rapp , petitioner challenged the amount of related
deductions respondent had allowed her, which we view as an
implicit acknowledgment of the existence of the income-producing
property .") . Accordingly, we conclude that respondent has
established a minimal evidentiary foundation and that the
presumption of correctness may therefore attach to respondent's
deficiency determination . See Rapp v . Commissioner , supra at
935 ; Weimerskirch v . Commissioner , supra at 361-362 .
Petitioner argues that the presumption should not attach
because respondent's concession as to the section 6651(a)(2)
addition to tax was an admission of error that casts doubt over
the entire notice of deficiency . We disagree . See Avery v .
Commissioner , T .C . Memo . 2007-60 n .9 (stating that Commissioner's
concession of section 6651(a)(2) addition to tax did not
invalidate notice of deficiency) .
Petitioner thus has the burden to prove that the deficiency
was arbitrary or erroneous . See Hardy v . Commissioner , 181 F .3d
1002, 1004 (9th Cir . 1999), affg . T .C . Memo . 1997-97 . He
advances three arguments in an attempt to meet that burden .3 He
argues that respondent (1) denied him proper due process--
including an Appeals conference--before issuing the notice of
deficiency ; (2) denied him a proper notice of deficiency "based
upon a true `Deficiency," ; and (3) determined the deficiency
incorrectly by failing to consider his "expenses, losses and
deductions, and exclusions (both business and non-business) . "
These arguments are unavailing . First, we note that "The
providing of a conference before the Appellate Division of the
Internal Revenue Service is not essential to the validity of a
notice of deficiency ." Cupp v . Commissioner , 65 T .C . 68, 83
(1975), affd . without published opinion 559 F .2d 1207 (3d Cir .
1977) . More generally and with respect to petitioner's second
argument, the Court will not look behind a notice of deficiency
to question the Commissioner's procedures leading to the
determination of a deficiency . See Kantor v . Commissioner , 998
F .2d 1514, 1521 (9th Cir . 1993), affg . in part and revg . in part
on another ground T .C . Memo . 1990-380 . Here, respondent
determined a deficiency and issued notice of that deficiency to
petitioner in accordance with applicable law . See secs . 6212 ,
3Although sec . 7491(a) may shift the burden of proof to the
Commissioner in specified circumstances, petitioner did not
satisfy the prerequisites under sec . 7491(a)(1) and (2) for such
a shift .
- 8 -
7522 . Petitioner has not provided any evidence to the contrary .
With respect to his final argument, petitioner has provided no
evidence of any losses, deductions, or other items that might
affect respondent's deficiency determination . See Rapp v .
Commissioner , 774 F .2d at 935 ("The taxpayer has the burden of
proof to substantiate claimed deductions .") . Accordingly, we
conclude that petitioner has failed to prove that respondent's
determination of unreported taxable income was arbitrary or
erroneous .
In addition, we conclude that petitioner is liable for the
10-percent additional tax imposed by section 72(t) on early
distributions from qualified retirement plans, including IRAs .
See secs . 408(a), 4974(c) . Although section 72(t) provides
exceptions to the additional tax, petitioner has the burden to
show that an exception applies, and he has not done so . See
Bunney v . Commissioner , 114 T .C . 259, 265-266 (2000) .
Accordingly, we sustain respondent's deficiency determination .
II . Additions to Tax
Respondent determined that petitioner was liable for
additions to tax under sections 6651(a)(1) and 6654(a) . Pursuant
to section 7491(c), respondent has the burden of production with
respect to these additions to tax and is therefore required to
"come forward with sufficient evidence indicating that it is
appropriate to impose the relevant penalty ." See Higbee v .
- 9 -
Commissioner , 116 T .C . 438, 446 (2001) . Although respondent
would have been relieved of that burden if petitioner had failed
to assign error to the additions to tax, we cannot conclude that
petitioner failed to do so . See Wheeler v . Commissioner , 127
T .C . 200, 206-207 (2006), affd . 521 F .3d 1289 (10th Cir . 2008) .
Section 6651(a)(1) imposes an addition to tax for failure to
file a timely return unless the taxpayer proves that such failure
is due to reasonable cause and not willful neglect . See United
States v . Boyle , 469 U .S . 241, 245 (1985) . Petitioner appears to
concede that he did not file a return . In his petition, he
asserts that he sent the Internal Revenue Service a December 27,
2004, letter "stating why he believed he was not required to file
a return" for his 2002 tax year . Moreover, petitioner has not
presented any evidence to suggest that his failure to file was
due to reasonable cause . Accordingly, we shall sustain
respondent's imposition of the addition to tax under section
6651(a)(1) .
Section 6654(a) imposes an addition to tax on individual
taxpayers who underpay their estimated income tax . The
Commissioner's burden of production under section 7491(c) with
respect to that addition to tax requires the Commissioner, at a
minimum, to produce evidence that a taxpayer was required to make
an annual payment under section 6654(d)(1)(B) . See Wheeler v .
Commissioner , supra at 211 . The amount of any required annual
- 10 -
payment is the lesser of (1) 90 percent of the tax shown on the
individual's return for the year or, if no return is filed, 90
percent of his or her tax for such year, or (2) if the individual
filed a return for the immediately preceding tax year, a fixed
percentage of the tax shown on that return . Sec . 6654(d)(1)(B) .
When, as here, the Commissioner fails to introduce evidence
showing whether a taxpayer filed a return for the preceding tax
year and, if so, the amount of tax shown on that return, the
Commissioner has not satisfied the burden of production because
it is impossible to determine whether the taxpayer had a required
annual payment under section 6654(d)(1)(B) . See Wheeler v .
Commissioner , supra at 211-212 . As a result, petitioner is not
liable for the addition to tax pursuant to section 6654(a) for
his 2002 tax year . See id . at 212 .
The Court has considered all of petitioner's contentions,
arguments, requests, and statements . To the extent not discussed
herein, we conclude that they are meritless, moot, or irrelevant .
To reflect the foregoing and concessions made by th e
parties,
Decision will be entered
under Rule 155 .
Demo.

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Re: Banister, Joe

Postby LPC » Wed Apr 08, 2009 5:53 pm

According to the Tax Court docket, Banister filed a notice of appeal to the 9th Circuit on 3/11/2009, No. 09-70775.
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Re: Banister, Joe

Postby fortinbras » Tue Sep 28, 2010 11:38 pm

Last week (on Sept 21, 2010) the court upheld the decision of the California Accountancy Board in revoking Joe Bannister's CPA license, arising from his promoting bogus tax dodges:

http://www.leagle.com/unsecure/page.htm?shortname=incaco20100921043

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Re: Banister, Joe

Postby The Observer » Tue Mar 08, 2011 4:16 pm

JOSEPH R. BANISTER,
Petitioner - Appellant,
v.
COMMISSIONER OF INTERNAL REVENUE,
Respondent - Appellee.

Release Date: MARCH 04, 2011

NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

Tax Ct. No. 1356-06

MEMORANDUM/*/

Appeal from a Decision of the United States Tax Court

Submitted February 15, 2011/**/

Before: CANBY, FERNANDEZ, and M. SMITH, Circuit Judges.

Joseph R. Banister appeals pro se from the tax court's decision upholding the Commissioner of Internal Revenue's determination of a deficiency and an addition to tax in connection with unreported income for tax year 2002. We have jurisdiction under 26 U.S.C. section 7482(a)(1). We review de novo the tax court's legal conclusions, and for clear error its findings of fact. Hardy v. Comm'r, 181 F.3d 1002, 1004 (9th Cir. 1999). We affirm.

The tax court properly upheld the tax determination because the Commissioner presented the "minimal factual foundation" necessary to link Banister to the receipt of unreported income, Palmer v. IRS, 116 F.3d 1309, 1312 (9th Cir. 1997), and Banister failed to submit any evidence "showing that the deficiency was arbitrary or erroneous," Hardy, 181 F.3d at 1005.

The tax court properly upheld the late-filing addition to tax because Banister did not file a tax return for 2002 or provide any evidence suggesting reasonable cause for his failure to do so. See 26 U.S.C. section 6651(a)(1).

Banister's remaining contentions are unpersuasive.

AFFIRMED.

//*//

This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3.


//**//

The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2).
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"Do you realize I may even be delusional with respect to my income tax beliefs? " - Irwin Schiff

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Re: Banister, Joe

Postby AndyK » Fri Nov 25, 2011 2:48 pm

Joe's back in the 9th Circuit again, this time appealing the California North District ruling upholding revocation of his privilege to practice before the IRS. As usual, he is assisted by The Bernhoft Law Firm.

As of this morning, Tax Notes Today reports his brief (7/21/11), DoJ brief (10/11), and his reply brief (10/31/11).

Joseph R. Banister v. U.S. Dept. of Treasury et al.; No. 11-15961
on appeal from U.S. District Court for the Northern District of California, No. 5:10-cv-02764-JW

I have a suggestion for Joe: If you want ANY of your arguments to have the remotest chance, take down your stupid TP web site.
Taxes are the price we pay for a free society and to cover the responsibilities of the evaders

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Re: Banister, Joe

Postby notorial dissent » Fri Nov 25, 2011 11:50 pm

Yes, but he'll still fall back on them in his arguments and he'll be right back where he was before, without his ticket, whining about being persecuted.
The fact that you sincerely and wholeheartedly believe that the “Law of Gravity” is unconstitutional and a violation of your sovereign rights, does not absolve you of adherence to it.

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Re: Banister, Joe

Postby wserra » Sat Nov 26, 2011 11:40 pm

I didn't get farther than the page early in the brief when Barnes starts arguing Cheek in the context of administrative proceedings.

Perhaps someone else has more tolerance for bullshit.
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Re: Banister, Joe

Postby Pottapaug1938 » Sun Nov 27, 2011 1:10 am

I think that this Banister has more than a few slivers in it.
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Re: Banister, Joe

Postby notorial dissent » Sun Nov 27, 2011 7:11 am

Why Wes, I'm shocked, here all this time I thought you were a hardened criminal attorney, and you're letting a little thing, well admittedly 44 pages of Bannisterian dreck and drivel, like this deter you?????

Although in all fairness, I do see what you mean, gahhh!!!! is it possible they can fine him for wasting the court's time with something like that?

So, as near as I can divine, he is whining that he got punted as a result of an administrative hearing, appealed that, and got punted again by the court when the reviewed the hearing results and sustained them? He's basically whining because the administrative hearing did what administrative hearings are supposed to? And, he's trying to use Cheek to justify his using his imaginary version of the tax code if I read it right? The rest of it is sounding like a collection of tax protester legal arguments, which means he will probably fare as well in his appeal as his returns fared with the IRS.
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Re: Banister, Joe

Postby Kestrel » Sun Nov 27, 2011 9:13 am

wserra wrote:I didn't get farther than the page early in the brief when Barnes starts arguing Cheek in the context of administrative proceedings.

Perhaps someone else has more tolerance for bullshit.

I didn't get through the whole thing either. But I skimed back and forth through it a few times.

I DID finish reading the decision posted above by fortinbras on Sep 28th 2010, BANISTER v. CALIFORNIA BOARD OF ACCOUNTANCY, No. C062435, Court of Appeals of California, Third District, Sacramento. That case spells out clearly why Banister's due process rights were NOT violated in the IRS matters: he admitted to the underlying facts, missed filing deadlines, filed untimely requests, and, in many of the filings he did make (timely or not) such as witness identification, failed to provide the minimum necessary supporting information.

In the current case Banister, of course, overlooks all this. I have to wonder if good Mr. Barnes, in representing him, has even seen the CA Court of Appeals decision.

Banister attempts defend himself in the instant case by claiming he was vilified for willful disregard and neglect when he took patently frivolous tax positions on behalf of his clients, claiming that all he did was "communicate the truth as he knew it." That line has been successfully used as a defense by non-professionals. But Banister, as a licensed professional, was quite properly held to a higher standard. He had a duty to know better.

So it seems to me that the real "willfulness" in this case is not what he wants the 9th Circuit to believe, whether he was exercising Good Faith or willfully violating tax laws. No, the "willfulness" here appears to be Banister's Willful Blindness. First he (as a licensed professional) exercised willful blindness in preparing and signing client tax returns that had patently frivolous material statements. Now he is using the same willful blindness in preparing this appeal, wherein he not only fails to address his little hiccups which CA discovered in the IRS matters, but hopes the 9th Circuit won't notice them either.
"Never try to teach a pig to sing. It wastes your time and annoys the pig." - Robert Heinlein

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Re: Banister, Joe

Postby notorial dissent » Sun Nov 27, 2011 9:44 am

I think “Willful Blindness” is a really good expression of what Bannister is exhibiting, I like that summation.

Bannister is/was supposedly a professional, not only as an accountant, but as a tax preparer, and as such, as you rightly point out, had a duty, and should have been aware that the positions he was presenting were not only “frivolous” but flat out hooey, and as a professional, he has no excuse for not knowing this, any more than a lawyer who practices tax law has any valid excuse for not knowing what the tax laws are or what the IRS stated frivolous positions are. Although Tommy Cryer is trying to pretend he doesn’t.

Bannister’s claims are specious at best, and at worst, flat out self serving lies. If nothing else, this appeal proves once and for all just exactly why he shouldn’t be allowed to practice as either an accountant or a tax preparer.

The only thing I can see is that he is hoping for some reason, again as you point out, that the court will somehow overlook or miss what has gone on before, and take his whinings at face value. I can’t imagine it happening, but he seems to be the current king of wishful thinking as far as the tax laws are concerned.

I somehow just don't see this faring any better than his previous attempts, and rather expect it to shortly go down in flames as have the previous attempts.
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Re: Banister, Joe

Postby LPC » Sun Nov 27, 2011 4:43 pm

wserra wrote:I didn't get farther than the page early in the brief when Barnes starts arguing Cheek in the context of administrative proceedings.

In the opinion of the Secretary of the Treasury the upheld the decision of the Administrative Law Judge, "willfulness" and the Cheek decision are discussed at length, pages 40 to 59. The ultimate holding is that the Cheek decision does not preclude summary judgment in a civil proceeding involving the fitness of a tax professional to practice before the IRS, and I think that the Secretary's decision is correct.

From pages 46-47:
Justice White indicated that:
“Characterizing a particular belief as not objectively reasonable transforms the inquiry into a legal one and would prevent the jury from considering it. It would of course be proper to exclude evidence having no relevance or probative value with respect to willfulness; but it is not contrary to common sense, let alone impossible, for a defendant to be ignorant of his duty based on an irrational belief that he has no duty, and forbidding the jury to consider evidence that might negate willfulness would raise a serious question under the Sixth Amendment’s jury trial provision.”
Id. at 203.

On this basis, the Court vacated the judgment of the Court of Appeals and remanded the case for further proceedings consistent with its opinion. In so doing, however, the Supreme
Court was careful to note:
“Of course, the more unreasonable the asserted beliefs or misunderstandings are, the more likely the jury will consider them to be nothing more than simple disagreement with known legal duties imposed by the tax laws and will find that the Government has carried its
burden of proving knowledge.”
Id. at 203-204.

Accordingly, while the Court found that the question of whether a belief was objectively reasonable was inappropriately inserted in the process to preclude consideration of the matter by the factfinder, Cheek does not stand for the proposition that the objective reasonableness of an argument is irrelevant to the determination of whether a good faith belief exists that the argument is proper. To the contrary, the Court’s opinion makes it clear that objective reasonableness may be a highly reliable indicator of whether an asserted belief is subjectively made in good faith.


Later, at pages 49-:
Applying these precedents regarding “willfulness” and “knowledge” to these proceedings, It is appropriate to note at the outset some significant differences between these
proceedings and the proceedings in Cheek.

First, Cheek involved a criminal proceeding and this case does not. This becomes an important distinction both because these proceedings do not raise questions of rights secured by the Sixth Amendment and for the broader reason that the division of functions between the trial judge and the jury in Cheek do not exist here. In disciplinary proceedings under Treasury Circular 230, all such functions are performed by the Administrative Law Judge. See §10.70(b) of Treasury Circular 230. For this reason, these proceedings do not raise the issue of whether Respondent’s belief is objectively reasonable in a manner that prevents the issue from being considered by the factfinder. Here, the determination of the objective reasonableness of Respondent’s beliefs is only considered as the Supreme Court indicated in Cheek it should be considered – as relevant and probative evidence indicating whether Respondent is credible in asserting his subjective good faith but mistaken belief, and in assessing the nature of that belief.

Second, the Supreme Court’s decision in Cheek v. United States, supra, involved an ordinary taxpayer, not an experienced tax professional. This factual distinction may be relevant for four reasons.

Ordinary Taxpayers v. Tax Practitioners. in light of the distinctions made in United States v. Boyle, supra, between the nature of responsibilities assumed in our tax system by ordinary taxpayers, on the one hand, and experienced tax practitioners, on the other, it is unclear whether the rationale underlying the Supreme Court’s decision would apply at all to an experienced tax practitioner, even in a criminal tax prosecution. At the very least, the rationale would appear not to apply with equal force in the case of an experienced tax practitioner.

[Snip discussion of United States v. Alt, 996 F.2d 827 (6th Cir. 1993).]

No Denial of Consideration by the Factfinder. Even if a court were to determine that Cheek’s underlying rationale applied, albeit in modified form, in the case of a criminal tax proceeding against an experienced tax practitioner, it would appear clear from Cheek that a factfinder could consider both the absence of objective reasonableness of the argument advanced by the practitioner and the nature and extent of his familiarity with federal tax matters in assessing the practitioner’s credibility in asserting a good faith mistake defense.

Purpose of the Proceeding. Unlike criminal tax prosecutions such as the one in Cheek, these proceedings have as their purpose determining Respondent’s fitness to practice before the Internal Revenue Service. Even if one were to conclude that an objective reasonableness limitation placed on the scope of a factfinder’s factual inquiry in a criminal tax prosecution was an unwarranted limitation on the factfinder, it would not necessarily follow that the same would or should be true in a disciplinary proceeding under Treasury Circular 230. Given the duties and responsibilities respectively assigned to taxpayers and tax practitioner in our tax system (see discussion of United States v. Boyle, supra), it is appropriate that the higher standards of competence required of experienced tax practitioners at the least be accompanied by a correspondingly greater skepticism in disciplinary proceedings under Treasury Circular 230 when such practitioners seek to establish good faith mistake defenses with respect to positions that are not objectively reasonable.

Inapplicability to Respondent’s Sixteenth Amendment Argument. Under Cheek, the “honest mistake” defense, whether based on an objectively honest belief or not, is not available with respect to mistakes involving the constitutionality of the income tax. Taxpayers and practitioners alike are conclusively presumed to have knowledge of the constitutional law. As a consequence, Cheek offers Respondent no comfort whatsoever with respect to his statements to Taxpayer C in the course of his representational activities that the Sixteenth Amendment had not been properly ratified.

Turning to the Decision of the Administrative Law Judge (including the Orders of the Administrative Law Judge incorporated by reference) and to the administrative record, I find that Judge Moran had ample reason for finding that Respondent’s conduct was willful and knowing under the standards discussed above and that his conduct, as alleged in the Initial Complaint, had been proven by clear and convincing evidence and justified disbarment from practice before the Internal Revenue Service.
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Re: Banister, Joe

Postby fortinbras » Mon Nov 28, 2011 5:30 am

Banister pretty much conceded his case when he tried to use the Cheek case. The Cheek case did not uphold any peculiar notion of tax law, it simply permitted the jury to consider the defendant's purported good faith in clinging to a bogus legal position. By citing the Cheek case, Banister admitted that his "source" argument against taxes was bogus.

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Re: Banister, Joe

Postby notorial dissent » Mon Nov 28, 2011 6:23 am

Well, when you got nothin' to start with, you pretty well have to grasp at any straws you can find, and these aren't going to get him very far.
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Re: Banister, Joe

Postby wserra » Mon Nov 28, 2011 12:16 pm

LPC wrote:In the opinion of the Secretary of the Treasury the upheld the decision of the Administrative Law Judge, "willfulness" and the Cheek decision are discussed at length


Now that you point it out, I see that - but I have no idea why.

After discussing Cheek in considerable detail - almost twenty pages worth - the Secretary manages in a sentence or two to show why it doesn't apply. First, the proceedings are so different as to render Cheek irrelevant - does the ALJ instruct himself on the law? Second, and perhaps more important - where is the "willfulness" requirement in Circular 230? If I tell a client that the law permits him to rob a bank, does the disciplinary committee really have to determine that I knew that this was false in order to discipline me? The issue is the competence of the professional, not whether s/he drinks her own Kool-Aid. As fortinbras says, logically Banister at least concedes incompetence in citing Cheek.

Maybe the Secretary had nothing else to do that week other than to expand a five page opinion to one hundred five pages.
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Re: Banister, Joe

Postby LPC » Mon Apr 30, 2012 1:16 pm

For some reason, Tax Notes has published (or re-published) the district court opinion issued in 2011. (And looking it now, I'm not sure how, or why, a 2004 decision by the Secretary can be appealed in 2010.)

Joseph R. Banister v. U.S. Dept. of Treasury et al., No. 5:10-cv-02764 (U.S.D.C. N.D. Cal. 3/10/2011)

JOSEPH R. BANISTER,
Plaintiff,
v.
U.S. DEP'T OF THE TREASURY, ET AL.,
Defendants.

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA
SAN JOSE DIVISION

ORDER GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT;
DENYING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

I. INTRODUCTION

Joseph Banister ("Plaintiff") brings this action against the United States Department of the Treasury and Timothy F. Geithner, in his official capacity as Secretary of the Treasury, pursuant to the Administrative Procedure Act, 5 U.S.C. §§ 702, 704. Plaintiff appeals an adverse ruling against him in a disbarment proceeding before an Administrative Law Judge ("ALJ"), where Plaintiff alleges he was disbarred from practicing as a Certified Public Accountant before the Internal Revenue Service ("IRS") in violation of his due process rights and without evidentiary basis.

Presently before the Court are the parties' Cross-Motions for Summary Judgment.1 The Court conducted a hearing on March 7, 2011. Based on the papers submitted to date and oral argument, the Court GRANTS Defendants' Motion for Summary Judgment and DENIES Plaintiff's Motion for Summary Judgment.

II. BACKGROUND

On April 18, 2001, the Office of Professional Responsibility ("OPR") sent Plaintiff a letter notifying him of the OPR's concerns regarding Plaintiff's eligibility to practice before the IRS in light of possible violations of 31 C.F.R. § 10.2 On May 14, 2001, Plaintiff replied to the OPR letter, denying all allegations that he provided false information or knowingly counseled clients to evade federal taxes. (Id.) Further, Plaintiff requested copies of all evidence upon which the OPR had based its allegations of potential violations. (Id.) On June 22, 2001, the OPR sent Plaintiff approximately two hundred pages of documents in response to his request. (Id. at DJ01321-22.)

On October 1 and October 28, 2002, the OPR sent Plaintiff a letter informing him that he had been referred to the Director for disciplinary action, reiterating the charges against him, offering voluntary resolution of the matter should Plaintiff consent to a thirty-six (36) month suspension and offering Plaintiff an opportunity to conduct a conference or to submit a written response. (AR at DJ02115.) Plaintiff retained counsel and, on December 20, 2002, Plaintiff's counsel requested a conference. (Id.) On February 24, 2003, a conference was held; however, no resolution was reached in the matter and Plaintiff would not agree to voluntary suspension in lieu of formal charges. (Id. at DJ02115-16.)

On March 19, 2003, the OPR filed an administrative complaint against Plaintiff alleging that: (1) Plaintiff had signed, as the preparer, federal income tax returns that were clearly frivolous in violation of 31 C.F.R. § 10.34; (2) Plaintiff had failed to exercise due diligence in advising taxpayers of positions that had no basis in law or fact in violation of 31 C.F.R. §§ 10.22, et seq.; and (3) Plaintiff had engaged in disreputable conduct by knowingly, recklessly, or through gross negligence providing false opinions to taxpayers in violation of 31 C.F.R. §§ 10.51, et seq. (AR at DJ0077780.) On April 30, 2003, Plaintiff filed an answer, wherein he admitted: (1) to engaging in federal tax practice before the IRS; (2) that he had advised a taxpayer that the taxpayer would not be subject to federal tax liability, as the Sixteenth Amendment was not properly ratified; (3) that he had advised taxpayers that they would not be liable for federal tax as Internal Revenue Code ("IRC") §§ 861-865 and its derivative regulations defined source of income as to exclude the taxpayers' income; and (4) that he had signed as the preparer for a taxpayer's forms, submitted to the IRS, claiming that the taxpayer was not liable for federal tax based on the IRC §§ 861-865 definition. (Id. at DJ00788.) Further, Plaintiff answered that he was entitled to an affirmative defense based on extensive research into the tax code and that, at the time of the signing and advising, no published source held that the IRC §§ 861-865 definition interpretation was incorrect. (Id.) On August 8, 2003, the OPR filed an amended complaint incorporating all allegations put forth in the initial complaint, but adding allegations that Plaintiff further violated 10 C.F.R. § 10.50 by failing to file federal income tax returns for years 1999-2002. (Id. at DJ00998-1000.) On October 29, 2003, Plaintiff filed an amended answer incorporating all answers and affirmative defenses set forth in his prior answer and denying the new allegations in the amended complaint. (Id. at DJ01254-56.)

On October 31, 2003, the OPR moved for summary judgment. (AR at DJ00001-53.) Plaintiff filed a timely opposition to the motion. (Id. at DJ00160-90.) On November 23, 2003, the ALJ granted summary judgment for the OPR and held that Plaintiff had committed the misconduct stated in the complaint and that sanctions were warranted. (Id. at DJ00342.) On December 1, 2003, the ALJ held an evidentiary hearing on sanctions. (Id. at DJ00065.) Counsel for both parties were present at the hearing. (Id. at DJ00064.) On December 23, 2003, the ALJ issued his decision, disbarring Plaintiff for willfully failing to follow the Circular 230 regulations in violation of 31 C.F.R. § 10.50. (Id. at DJ00547-48.)

On January 23, 2004, Plaintiff appealed the ALJ's decision to the Secretary of the Treasury. (AR at DJ02195-2244.)3 On June 25, 2004, the Secretary of the Treasury issued its opinion: (1) affirming the ALJ's findings with respect to the charges for advising frivolous tax positions lodged in the initial complaint; (2) vacating, without remand and without prejudice, the ALJ's findings with respect to the charges for failure to file tax returns first made in the amended complaint; and (3) affirming, on the basis of the charges in the initial complaint, and adopting the ALJ's decision to disbar Plaintiff. (Id. at DJ01846-1949.)

On June 24, 2010, Plaintiff filed a Complaint appealing the final administrative decision by the Secretary of the Treasury pursuant to the Administrative Procedure Act, 5 U.S.C. §§ 702, 704, on the grounds that: (1) the decision to disbar Plaintiff was arbitrary, capricious, an abuse of discretion, and not supported by evidence; and (2) Plaintiff was deprived of due process in his administrative disbarment proceedings by the ALJ's denial of discovery, confrontation, or admission of evidence in Plaintiff's defense. (Docket Item No. 1 at 4.)


III. STANDARDS

Summary judgment is proper if "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The purpose of summary judgment "is to isolate and dispose of factually unsupported claims or defenses." Celotex v. Catrett, 477 U.S. 317, 323-24 (1986). "In a case involving review of a final agency action under the [APA], 5 U.S.C. § 706, however, the standard set forth in Rule 56(c) does not apply because of the limited role of a court in reviewing the administrative record." Sierra Club v. Mainella, 459 F. Supp. 2d 76, 89 (D.D.C. 2006). In an action for review of administrative action pursuant to the APA, "the function of the district court is to determine whether or not as a matter of law the evidence in the administrative record permitted the agency to make the decision it did." Occidental Eng'g Co. v. Immigration and Naturalization Svc., 753 F.2d 766, 769-70 (9th Cir. 1985); see also Northwest Motorcycle Ass'n v. United States Dep't of Agriculture, 18 F.3d 1468, 1472 (9th Cir. 1994) ("[T]he court's review is limited to the administrative record."). Specifically, the reviewing court may set aside the judgment of an administrative action should it find the decision to be: (1) "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law"; (2) "contrary to constitutional right, power, privilege, or immunity"; (3) "in excess of statutory jurisdiction, authority, or limitations, or short of statutory right"; (4) "without observance of procedure required by law"; (5) "unsupported by substantial evidence in a case . . ."; or (6) "unwarranted by the facts to the extent that the facts are subject to a trial de novo by the reviewing court." 5 U.S.C. § 706. "Summary judgment thus serves as the mechanism for deciding, as a matter of law, whether the agency action is supported by the administrative record and otherwise consistent with the APA standard of review." Sierra Club, 459 F. Supp. 2d at 90.


IV. DISCUSSION

Plaintiff moves for summary judgment to reverse the Secretary of the Treasury's decision on the grounds that: (1) the administrative proceedings violated Plaintiff's due process rights in that Plaintiff was not provided sufficient notice of the allegations against him of misconduct and Plaintiff was not allowed to testify, conduct discovery, present witnesses, conduct an evidentiary hearing, and cross-examine his accusers; and (2) the ALJ's decision was not supported by evidence, as the ALJ must prove intent, and was, thus, capricious and an abuse of discretion.4 (Plaintiff's Motion at 4-17.) Defendant moves for summary judgment to affirm the decision on the grounds that: (1) Plaintiff was provided adequate notice in a number of letters as well as a hearing; (2) Plaintiff's due process rights were not violated, as there is no fundamental right to irrelevant discovery and unnecessary hearings, and Plaintiff admitted to the conduct at issue in his Answer; (3) the ALJ's findings were not arbitrary and capricious as Plaintiff admitted in his answer to counseling clients to take "objectively unreasonable" tax positions universally rejected by the courts. (Defendants' Motion at 12-24.) The Court addresses each ground in turn.

A. Sufficient Notice

Plaintiff contends that he was not provided sufficient notice of the allegations against him or provided the opportunity to comply on the grounds that: (1) the complaint lodged against Plaintiff by the OPR failed to state Plaintiff's allegedly frivolous and objectively unlawful advice with sufficient specificity; and (2) the OPR initiated proceedings against Plaintiff without sufficient notice to allow Plaintiff to correct or clarify the conduct. (Motion at 4-7.)

Title 31 U.S.C. § 330(b) provides, in pertinent part:
After notice and opportunity for a proceeding, the [Secretary of the Treasury] may suspend or disbar from practice before the [IRS], or censure, a representative who . . . (1) is incompetent; (2) is disreputable; (3) violates regulations prescribed under this section; or with intent to defraud, willfully and knowingly misleads or threatens the person being represented or a prospective person to be represented.


Here, Plaintiff was provided with two warning letters and a meet-and-confer session between the OPR and Plaintiff, along with Plaintiff's counsel. (AR at DJ01326-27, DJ02115-16.) Following the meet-and-confer, the OPR then served Plaintiff with an administrative complaint. (Id. at DJ00777-80.) While Plaintiff contends that Defendant failed to plead allegations of fraud with particularity, Plaintiff did not move for a more definite statement regarding the complaint and was able to address all allegations and assert affirmative defenses in his answer. (Id. at DJ00788.) Moreover, Plaintiff, in his answer, conceded to the conduct on which the ALJ based his decision to disbar and on which the Secretary of the Treasury affirmed the disbarment. (Id.) Further, the ALJ considered and denied Plaintiff's motion to dismiss the complaint for failure to plead facts with particularity sufficient to provide Plaintiff with fair notice. (Id. at DJ00341-42.) The Secretary of the Treasury also considered the sufficiency of the allegations on appeal, and upheld the ALJ's decision that the insufficiency contention was without merit. (Id.) Thus, the Court finds that the administrative proceeding did not violate Plaintiff's due process rights by failing to provide sufficient notice.

B. Discovery

Defendant contends that the ALJ's disallowance of discovery during the administrative disbarment proceeding into whether Plaintiff had properly notified the IRS of his client's controversial positions and whether the litigation against Plaintiff was retaliatory following his media appearances as a whistle blower against the IRS, deprived Plaintiff of his right to due process. (Motion at 7-11.)

The Administrative Procedure Act provides no specific provisions for pretrial discovery for administrative proceedings. Silverman v. Commodity Futures Trading Commission, 549 F.2d 28, 33 (7th Cir. 1977). Thus, courts have held that "[t]here is no basic constitutional right to pretrial discovery in administrative proceedings." Id. In order to assert a claim for deprivation of due process rights resulting from the denial of discovery during such a proceeding, a party must demonstrate that they were "clearly prejudiced" from the denial of discovery. N.L.R.B. v. Martin A. Gleason, Inc., 534 F.2d 466 (2d Cir. 1976).

Here, Plaintiff has failed to demonstrate how his defense was prejudiced by the ALJ's holding that no material issues of fact were in dispute and, as consequence, the ALJ's denial of discovery. In particular, Plaintiff conceded in his answer to undertaking the conduct for which he was disbarred; namely, that he advised his clients on two objectively unreasonable tax positions: (1) that the Sixteenth Amendment was not properly ratified; and (2) that under the "Section 861" position, his clients' income was not "income" for calculation of tax liability. (AR at DJ00788.) The ALJ did not abuse its discretion in finding, under Plaintiff's own concessions, that further discovery was not warranted and that it could rule as a matter of law that Plaintiff had violated Circular 230. (Id. at DJ00335-36.)

Courts have universally discredited both of Plaintiff's theories on which he advised clients that they held no tax liability long before Plaintiff proffered his advice.5 The ALJ did not abuse his discretion to find Plaintiff's positions, which Plaintiff purports were based on extensive knowledge and research, so objectively unreasonable that it would be impossible to hold them in good faith. (AR at DJ01084-85.) Further, the ALJ highlighted case law that distinguished a good faith misunderstanding of the law from a good faith disagreement with the law for a finding of willfulness. (Id. (citing Niegringhaus v. C.I.R., 99 T.C. 202 (1992).) Thus, the Court finds that the administrative proceeding did not violate Plaintiff's due process rights by failing to provide discovery.

C. Hearing

Plaintiff contends that the ALJ's disallowance of an evidentiary hearing during the administrative disbarment proceeding deprived Plaintiff of his right to due process and that the ALJ's hearing post-judgment was insufficient to cure the defects in the proceedings. (Motion at 14.)

The Administrative Procedure Act does not require the Secretary of the Treasury to conduct formal hearings. C.K. v. Shalala, 883 F. Supp. 991, 1004 (D.N.J. 1995) (citing Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 417 (1971) abrogated on other grounds by Califano v. Sanders, 430 U.S. 99, 105 (1977)). Further, an individual, subject to disbarment proceedings before the Secretary of the Treasury, is not entitled to a full hearing on the merits; only "due notice and the opportunity for hearing." Washburn v. Shapiro, 409 F. Supp. 3, 9 (S.D. Fla. 1976) (quoting 31 U.S.C. § 1026).

Here, Plaintiff has failed to demonstrate prejudice arising from the ALJ's denial of a full hearing in his disbarment proceedings. While Plaintiff contends that he was unable to present evidence at a hearing that his prosecution was retaliatory in nature and resulted from his recent appearance on 60 Minutes,6 the ALJ explicitly disbarred Plaintiff for conduct that he admitted to in his Answer. (AR at DJ00335-36.) Thus, the Court finds that the administrative proceeding did not violate Plaintiff's due process rights by denying Plaintiff's request for an evidentiary hearing where there were no factual allegations in dispute.

D. Limitations on Evidence

Plaintiff contends that the ALJ's limitations on evidence, including the exclusion of all of Plaintiff's proposed witnesses and the disallowance of Plaintiff's ability to cross-examine witnesses called against him, violated Plaintiff's due process rights. (Motion at 15-17.)

Title 5 U.S.C. § 556 provides that "[a] party is entitled to present his case or defense by oral or documentary evidence, to submit rebuttal evidence, and to conduct such cross-examination as may be required for a full and true disclosure of facts." However, the code also provides that, in a disciplinary proceeding, the Administrative Law Judge has the authority to "rule on offers of proof," "regulate [hearing] course and conduct," and to "receive relevant evidence." 31 C.F.R. § 10.70(B) (emphasis added).

Here, Plaintiff has failed to demonstrate how presentation of evidence was required and how the ALJ's limitations on his proffered evidence for lack of relevancy prejudiced his defense. The ALJ did not abuse his discretion in limiting evidence in the case to evidence that was relevant to the material facts at issue and timely, so as to avoid prejudice. (AR at DJ01924-25.) Further, contrary to Plaintiff's contentions, the record demonstrates that Plaintiff was afforded the right to cross-examine the sole witness presented by the government at the sanctions hearing. (Id. at DJ00093, DJ00125.) Thus, the Court finds that the administrative proceeding did not violate Plaintiff's due process rights by limiting admission of evidence based on relevance.

E. Plaintiff's Testimony

Plaintiff contends that the ALJ's decision barring Plaintiff from testifying regarding the diligence of his research, the community standard for his practice, his knowledge of others taking the same position successfully, and his history of never willfully violating any federal law during the administrative disbarment proceeding deprived Plaintiff of his right to due process. (Motion at 1114.)

Although Plaintiff contends that he was denied the right to testify on his own behalf, the record shows that the ALJ afforded Plaintiff the opportunity to make an unsworn statement and read it into the hearing record. (AR at DJ000130-143.) Plaintiff was being investigated at the time on criminal charges for the same conduct at issue in these proceedings, and thus an unsworn statement was appropriate. (Id. at DJ01915-18.) The Secretary of the Treasury considered and upheld the ALJ's decision to allow an unsworn statement on appeal as proper. (Id. at DJ01925.) Thus, the Court finds that the administrative proceeding did not violate Plaintiff's due process rights by failing to allow Plaintiff to testify.

Accordingly, the Court GRANTS Defendant's Motion for Summary Judgment and DENIES Plaintiff's Motion for Summary Judgment.

V. CONCLUSION

The Court GRANTS Defendant's Motion for Summary Judgment and DENIES Plaintiff's Motion for Summary Judgment.

Judgment shall be entered accordingly.

DATED: March 10, 2011

James Ware
United States District Chief Judge
FOOTNOTES

1 (Defendants' [sic] Notice of Motion and Motion for Summary Judgment, hereafter "Plaintiff's Motion," Docket Item No. 23; United States' (1) Opposition to Plaintiff's Motion for Summary Judgment and (2) Cross-Motion for Summary Judgment, hereafter, "Defendants' Motion, Docket Item No. 24.)

2 (Certificate of Administrative Record at DJ01326-27, hereafter, "AR," Docket Item Nos. 16-22.)

3 The Court notes that page DJ02217 of Plaintiff's Appeal to the Secretary of the Treasury is illegible. However, the content of that page may be readily determined from the balance of the document.

4 (Plaintiff's Reply in Support of Motion for Summary Judgment and Opposition to Cross-Motion for Summary Judgment at 1-9, hereafter, "Reply," Docket Item No. 26.)

5 Brushaber v. Union Pac. R. Co., 240 U.S. 1, 20 (1916) (holding that Congress may properly exercise its legislative power as granted by the Sixteenth Amendment to lay income tax); U.S. v. Stahl, 792 F.2d 1438, 1441 (9th Cir. 1986) ("We conclude that the Secretary of State's certification under authority of Congress that the [S]ixteenth [A]mendment has been ratified by the requisite number of states and has become part of the Constitution is conclusive upon the courts.");Williams v. C.I.R., 114 T.C. 136, 138-39 (2000) ("Petitioner's arguments [including "Section 861" contentions] are reminiscent of tax-protester rhetoric that has been universally rejected by this court and others."); Great-West Life Assur. Co. v. United States, 678 F.2d 180, 183 (Ct. Cl. 1982) ("The determination of where income is derived or 'sourced' is generally of no moment to either United States citizens or United States corporations, for such persons are subject to tax . . . on their worldwide income.").

6 (Motion at 14-15.)

END OF FOOTNOTES
Dan Evans
Foreman of the Unified Citizens' Grand Jury for Pennsylvania
(And author of the Tax Protester FAQ: evans-legal.com/dan/tpfaq.html)
"Nothing is more terrible than ignorance in action." Johann Wolfgang von Goethe.


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