[weishaupt1776]

This Sacramento Bee version of events may win the prize for the most biased.

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Verdict cheered by tax evaders
Accountant acquitted of preparing false returns still faces the loss of his license.
By Andrew McIntosh -- Bee Staff Writer
Published 2:15 am PDT Saturday, June 25, 2005
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Tax evaders are crowing over a courtroom victory for accountant Joseph R. Banister, acquitted of helping a client prepare false returns, but the trouble is not over for the former IRS investigator.
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The California Board of Accountancy has charged Banister with two counts of professional misconduct under the state's Business and Professions Code because he failed to file his own personal tax returns between 1999-2002.
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*Banister, a 42-year-old San Jose resident, is facing a second charge after federal Administrative Law Judge William B. Moran disbarred him from practicing before the Internal Revenue Service, saying he was giving taxpayers erroneous advice.
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Board of Accountancy executive officer Carol Sigman signed the five-page complaint on Feb. 25, requesting a hearing to determine whether Banister's certified public accountant's license should be suspended or revoked.
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Banister, a former gun-toting IRS special agent whose Web site carries links that read "The Income Tax is a Hoax," could not be reached for comment but has always denied any wrongdoing.
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The misconduct complaint said that when state officials quizzed Banister about his tax returns at a 2004 hearing in Los Angeles, he declined to answer.
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A licensed accountant since 1991, Banister was forced out of the IRS in 1999 after writing a report in which he questioned the agency's legal authority to impose income taxes on workers.
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Not only did he question the federal tax system's legitimacy, but he also advised business owners that there was no legal requirement for them to withhold taxes from their workers' paychecks.
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In her complaint, the Accountancy Board's Sigman said: "This issue has long been decided to the contrary by federal courts."
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Nevertheless, tax protesters who consider Banister a folk hero celebrated in Sacramento and on the Internet this week after a jury acquitted him of federal charges that accused him of conspiring with a small business client to file three false tax returns.
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Two women in a group of tax protesters who were in the courtroom as the jury read its not-guilty verdicts cheered, and the judge had bailiffs remove them.
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Prosecutors had accused Banister and Redding businessman Walter Thompson of conspiring to defraud the government of about $259,669 in income and employment taxes.
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Thompson was convicted in January. He is now serving a six-year sentence after his company, Cencal Aviation Products in Shasta Lake, failed to withhold and remit taxes from the paychecks of his workers.
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The verdicts in the Banister and Thompson cases raise questions about the administration of justice: How can Banister be acquitted while the business owner he advised and helped goes to jail?
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Bob Petersen, an accountant with Petronovich, Pugh & Co. in San Jose and past president of the California Society of Certified Professional Accountants, said the Banister acquittal does not mean there's a loophole being exploited by tax advisers who collect fees as their clients go to jail.
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"I think this was just a case of the prosecutor failing to make his case to the jury," Petersen said.
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IRS spokesman Bill Steiner and Patricia Pontello, a spokeswoman for federal prosecutor Robert Twiss, both declined comment on the verdict.
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Congressional and California legislators have strengthened laws in recent years to increase penalties for financial professionals who give clients erroneous tax advice, Petersen said.
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He said Banister is not part of his 28,000-member society and isn't welcome.
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"Our group does not condone this type of behavior. We think all people need to pay their fair share of taxes," Petersen added.
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About the writer:
The Bee's Andrew McIntosh can be reached at (916) 321-1215 or amcintosh@sacbee.com