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IR-2004-93, July 13, 2004
CPA’S APPEAL OF DISBARMENT DENIED
WASHINGTON — The Treasury Department has denied the appeal of Joseph
Banister from an administrative law judge’s decision that Banister be
disbarred from practice before the Internal Revenue Service. Banister is a
Certified Public Accountant from San Jose and former IRS criminal
The IRS Office of Professional Responsibility, in a complaint against
Banister, alleged that he was misrepresenting the law to taxpayers and
that he failed to file his own federal income tax returns for tax years
1999-2002. OPR investigates allegations of disreputable conduct and
incompetence against tax practitioners and enforces the standards of
practice for those who represent taxpayers before the IRS, as detailed in
Treasury Department Circular 230.
Judge William B. Moran in a Dec. 24, 2003, decision found that Banister
provided erroneous advice to taxpayers, including improperly advising them
that returns were not required because Sections 861 through 865 of the
Internal Revenue Code define “source of income” in a manner which
the income of U.S. citizens residing in the U.S. from U.S. tax. Banister
also provided erroneous advice that they were not required to file returns
because the 16th Amendment to the Constitution was not properly ratified.
The original complaint against Banister was later amended to charge
Banister with not filing his own returns for tax years 1999-2002.
Banister filed an appeal of the judge’s decision with the Department
the Treasury, citing numerous alleged errors. In a decision dated June 25,
2004, David F.P. O’Connor, acting under a delegation from the Secretary
the Treasury, affirmed Judge Moran’s decision regarding erroneous advice
to taxpayers. O’Connor found that the Office of Professional Responsibility
had not met its burden of proof with respect to the charge
that Banister had failed to file his own returns. He did not send the case
back to Judge Moran for further proceedings, during which the Office of
Professional Responsibility could have introduced the required additional
evidence, because O’Connor agreed with Judge Moran that the charges
related to erroneous advice to taxpayers alone warranted disbarment from
practice before the IRS.
In rejecting Banister’s claim that his advice to clients was protected
speech, and that sanctions under Circular 230 should not restrain zealous
advocacy on behalf of taxpayers, O’Connor said “zealous advocacy
constitute license for the assertion of frivolous positions.” O’Connor
noted a number of court decisions in which Banister’s positions on Section
861 and the 16th Amendment have been rejected. He agreed with the spirit of
Judge Moran’s statement that “the 861 argument and the non-ratified
Sixteenth Amendment argument share a related lunacy in that, for differently
concocted reasons, neither accomplishes the presumed goal of creating a Federal
income tax on U.S. citizens.”
In addressing the charges related to Banister’s failure to file his
tax returns, O’Connor found that the Office of Professional Responsibility
had not met its burden of proof. The missing element was evidence that Mr.
Banister had gross income sufficient to trigger a filing obligation in
each of the cited tax years.
O’Connor considered and rejected a number of claims that Banister raised
regarding the fairness of the discipline process and his opportunity to
present his case to the Administrative Law Judge. As a result of this
decision, Banister has been disbarred from representing taxpayers before
the IRS. He may appeal the decision to U.S. District Court.
Links on IRS.gov: