A former IRS agent who believes citizens are not required to pay federal income taxes will appear in U.S. District Court in Sacramento tomorrow to face charges for numerous alleged tax crimes.
Joseph Banister, 41, a leading figure in the “tax honesty” movement, was taken into custody Nov. 19 by IRS agents and released on $25,000 bond after pleading not guilty.
A Certified Public Accountant in San Jose, Calif., Banister has been telling his clients they don’t need to file federal income tax returns because the 16th Amendment, which gives Congress “power to lay and collect taxes on incomes,” was never properly ratified.
But IRS spokesman Anthony Burke insisted Banister’s reasoning already has been thoroughly vetted.
“Many constitutional or legal arguments have been tried in the courts, and without fail, they have been held to be without merit,” he told WorldNetDaily.
Asked if Banister’s apparently sincere belief that he is following the Constitution makes his case different from other fraud indictments, Burke said he could not comment directly but pointed to Banister’s remarks in a New York Times article after his arrest, implying that the California accountant knows tax payment is required.
Banister told the paper that while he does not file a Form 1040, he has advised the government of his income and deductions and has turned over sums equal to what he would owe in taxes.
The IRS spokesman said many courts are getting fed up with lawsuits brought by people who contend federal tax law is fraudulent and are slapping them with frivilous-lawsuit penalties.
In response to another common argument, the Department of Justice website says, “courts have both implicitly and explicitly recognized that the 16th Amendment authorizes a non-apportioned direct income tax on United States citizens and that the federal tax laws as applied are valid.”
Banister’s attorney Robert E. Barnes did not respond by press time to a request for comment.
Banister’s website offers a defense of his views, including an 85-page report titled “Investigating The Federal Income Tax: A Preliminary Report.”
The federal indictment accuses Banister and co-defendant Walter A. Thompson, 57, of Redding, Calif., of conspiring to defraud the United States of approximately $259,669 in income and employment taxes.
Banister is charged with three counts of aiding and assisting the filing of false tax returns for Thompson, owner of Cencal Sales, manufacturer of aviation travel bags. Thompson is charged with one count of filing a false income tax return and 10 counts of failing to collect and pay more than $176,000 in taxes from his employees.
If convicted of all counts, Banister could be sentenced to 14 years in prison and a fine of $1 million. Thompson could receive 68 years and a fine of $3.5 million.
In a statement, U.S. Attorney McGregor W. Scott said Banister and Thompson were guilty of “blatant and far-reaching defrauding of honest taxpayers,” warranting aggressive prosecution.
“This case should serve as a stark reminder to our citizens that caution should be heeded when approached by those advocating wild theories as to why one does not have to obey federal tax laws,” he said.
Banister left public practice as a CPA in 1993 to become an armed, criminal investigator in the IRS Criminal Investigation Division. But he says he resigned after six years because he was “unable to resolve conflicts” between the way the IRS administered the federal income tax and his oath of office.
As WorldNetDaily reported in March, Banister claimed the IRS was illegally using “enforcers” to monitor his political activities and build its case against him. The IRS filed a complaint March 19, 2003, and began what he calls the agency’s “mission to silence and discredit me.”
In an e-mail to supporters yesterday, Banister said, “In obvious desperation, the IRS has had to hunt around its slimy cave for a bigger club because the ones the agency had used in the past were not working as planned. The club now being swung against me is an attempt to take away my personal freedom.”
Banister, noting he is married with two teenage boys, said he recognizes the personal price he is paying but believes his case has broad implications.
“In order to mount the best defense possible, a defense necessary to protect every conscientious American who yearns for honesty in taxation and honor in our public officials, I dearly need your spiritual and financial support,” he said. “I believe those who wish to throw me in this lion’s den have made one mistake – they do not realize that I am not alone there.”
In 1996, while working for the IRS, Banister says his view of tax law was jolted when he heard radio talk host Geoff Metcalf interview activist Devvy Kidd on KSFO in San Francisco.
After receiving information from Kidd, Banister used his spare time over two-and-a-half years to compile a report for his superiors, telling them that if they cannot find anything wrong with his analysis, he would have to resign.
Banister said his superiors refused to respond to his report and told him they would facilitate his resignation.
Kidd told WND she views Banister as a “man of honor and courage.”
“He didn’t have to explore what I said on Geoff Metcalf’s radio show, and then, when he did find out the whole income tax system is just one gigantic fraud, he could have kept quiet and continued to draw his $80 grand a year paycheck,” she said.
“Instead, he choose the path of most resistance because as a man, he could not live with himself if he did otherwise.”
Thompson was arrested Nov. 19 after a car chase at speeds of 80 to 100 miles per hour. The California Highway Patrol finally stopped him after laying a strip of spikes to flatten the tires of his car.
According to the New York Times, Thompson placed a call to associate Cindy Neun while the chase was under way. Neun, reporting to members of the movement in an e-mail, quoted Thompson saying, ”I’m going to make them take me.”
Thompson refused to leave his car for 10 minutes, said Lt. Jeff Lee of the California Highway Patrol, according to the Times. ”Eventually we persuaded him to come out and he was arrested without incident or injury.”
Thompson has been jailed four times for refusing to cooperate with state tax auditors or file returns and pay federal taxes, the Times said.