Talk Radio Show Prompted IRS Agent To Quit
‘Grudgingly Convinced Himself That The Federal Income Tax Was A Fraud’
-USA Daily Exclusive-Filed March 31, 2004
After hearing a guest on his favorite radio show claim that the federal income tax was voluntary, San Jose California resident and IRS Special Agent, Joseph Banister, of the IRS Criminal Investigation Division, set out to dismiss the claim as frivolous. Devvy Kid made the disturbing claim on the Geoff Metcalf radio show back in 1997 that sent Banister on a journey that would change his life.
Banister recalls, “As an IRS agent I was upset at the claim. I respected Geoff Metcalf. He was a fair and non-partisan host. When he let the charge that the income tax was voluntary go by, I decided that on my own time, and at my own expense, I was going to research and in two weeks or so, disprove the guest’s claim.”
Two years later, Banister grudgingly convinced himself that the “federal income tax was a fraud”. He then went on to write a ninety five-page report that he would present to his immediate supervisor, Bob Gorini, who also was a family friend. Telling his supervisor to forward his analysis up the chain of command, Banister asked the IRS to “show me the error of my analysis or I will have to resign.”
Surprisingly, instead of addressing then Special Agent Banister’s questions and concerns about the IRS code, Paul Varville of the IRS Chief Criminal Investigation Division responded in a memo dated February 17, 1999 by saying, “The Internal Revenue Service will not be responding to your request and will provide you with the necessary paperwork to tender your resignation”.
Banister tells USA Daily, “I came to the conclusion that the IRS was knowingly deceiving the American public with regard to federal income taxes.” Reliving his moral dilemma, Banister stressfully said, “Ethically and morally I had no choice. As a Christian, and as an American that took an oath to protect and defend the Constitution of the United States, I had to resign.”
On February 25, 1999, Joseph Banister resigned from the IRS because of discovering what he called IRS fraud. Bannister, featured in a soon to be released IRS Documentary, that is being promoted by Larken Rose through a website called TaxableIncome.Net, “says that he hasn’t paid federal income taxes directly to the IRS since 2000 and since that time sets the funds aside awaiting answers from the IRS and other government officials.”
Banister has researched the Section 861 issue and agrees with other self described ‘tax educators’ that it provides valuable clues about the true application of the federal income tax to the average American. Pointing to the written law, these ‘tax educators’ claim that Section 861 of title 26 of the US Code (IRS Code) defines a taxable source of income, and that most Americans’ incomes do not fit the criteria.
However, Banister emphasized that he does not tell everybody he sees to stop paying taxes. “We’re just trying to educate people about what the written law says, they have to make their own decisions about whether they legally owe federal income taxes.”
The Controversial Documentary on the IRS featuring Banister, another IRS agent, several attorneys, and CPAs, already has 300,000 copies of Mini-CDs pre-ordered. With DVDs planned for the second distribution, and viewable over the Internet, people will be able to see the video with a simple click on a link embedded in the body of an email. Potentially, tens of millions of Americans may view the documentary over a relatively short period of time.
Banister claims his ‘political activities are being illegally monitored’ as is recently reported on WorldNetDaily: IRS 'enforcers' target ex-agent, Ron Strom reports, “the IRS filed a response to the former agent's appeal that cites as justification for its action a Nixon-era tactic the agency used to punish war protesters.” Some believe the claim ‘justifies near unlimited powers for the agency.’
As for the IRS’s response to 861, an Internal Revenue Bulletin in no uncertain terms attacks it as frivolous:
The Service is committed to identifying taxpayers who attempt to avoid their tax obligations by taking frivolous positions, such as the Section 861 position.
Taxpayers relying on this scheme also may face criminal prosecution for: (1) attempting to evade or defeat tax under section 7201 for which the penalty is a fine of up to $100,000 and imprisonment for up to 5 years; or (2) making false statements on a return under section 7206 for which the penalty is a fine of up to $100,000 and imprisonment for up to 3 years.
While the IRS discredits the 861 issue as frivolous it does not appear to have specifically answered many questions about the code. Banister says that to his knowledge a criminal judicial court has never actually heard and ruled against 861 and sent anyone to jail for tax evasion.
Banister claims the IRS is now attempting to blur the lines between ‘tax evasion’ and ‘tax avoidance’. “Tax Evasion is the attempt to cheat and not pay what you are legally owe in federal income taxes while ‘Tax Avoidance’ means that you try to minimize what you are obligated to pay according to the written law.”
To emphasize the difference between tax avoidance and tax evasion, Banister pointed out an excerpt from the IRS Handbook for Special Agents, specifically Chapter 412 IRS Tax Cases (Evidence and Procedures), which states “Avoidance of taxes is not a criminal offense” and later continues, “One who avoids tax does not conceal or misrepresent. He shapes events to reduce or eliminate tax liability and upon the happening of events makes a complete disclosure.
Banister argues that the IRS should specifically answer questions about its own code, “Nobody promoting the 861 issue is concealing or misrepresenting the facts. They are doing the exact opposite. They are asking the IRS to answer specific questions and the IRS refuses. Who is concealing and misrepresenting here?”
With a stir of passion, Banister says, “The government does not have the luxury not to answer these questions, they have a duty to answer them!” He continues, “None of this, the organizations out there, the grass roots activism, none of it would be necessary if the IRS just answered the questions.”
Speaking about the soon to be released IRS Documentary, Banister references the movie The Wizard of OZ, “Millions will see this video on the Internet and there is nothing the IRS can do but say to the public pay no attention to the man behind the curtain”.
Banister continues his nearly 15 year career as a CPA, now dealing mostly with litigation support services, he also continues to operate his www.freedomabovefortune.com website and says it has welcomed hundreds of thousands of visitors. One wonders if he’s feeling as if he’s walking down a road less traveled as he says that many are aware of what he claims is ‘fraud’ but “they don’t want to ruin their careers and lose those government pensions.”
Sifting through the complexity of the federal income tax code it may not be clear to all whether Banister and his fellow ‘Tax Educators’ or the IRS and their interpretation of the law are right on this issue. Once the IRS Documentary on 861 is streaming across cyberspace, the issue may ultimately be up to time and the court of public opinion to decide, or even someday the U.S. Supreme Court.
However, one thing is for certain, talk radio hasn’t changed much since 1997, but for better or for worse, it has certainly changed the life of Mr. Banister.