You'll notice that the name of this organization is Freedom Above Fortune, not Freedom Without Fortune or
Freedom Instead of Fortune. Rather, Freedom Above Fortune is an organization dedicated to the concept that
no amount of real or perceived economic prosperity or fortune is worth trading for your freedom. This is not
to say that pursuing economic prosperity, in and of itself, is bad. Rather, it is to say that those who are
willing to sell their freedom and their children's freedom for a few pieces of silver, as Judas did when he
betrayed Jesus Christ, are shortsighted and foolish. If you are willing to sell your freedom for short term
financial security, real or perceived, the willingness to sell your very soul can't be far behind.
Freedom Above Fortune was founded by Joseph R. (Joe) Banister, a former IRS Criminal Investigation Division
Special Agent who learned of serious constitutional questions relating to the federal income tax and the federal
banking and monetary systems. Mr. Banister's expertise in the fields of accounting, finance, taxation, and law
enforcement enabled him to not only understand these issues but realize that he could play a role in bringing
the issues into the public arena for analysis and debate.
The federal government's campaign against income tax protesters suffered a major setback yesterday when a federal jury in Sacramento acquitted a former Internal Revenue Service investigator on charges of helping to prepare false tax returns.
The former investigator, Joseph R. Banister, 42, of San Jose, Calif., has become a hero to the tax protest movement, even though two of his clients are serving long prison sentences after following his advice.
Mr. Banister was acquitted on charges of conspiracy and helping to prepare three false tax returns for a small California manufacturer.
"Everything I have done in my entire career at the I.R.S. and after, I've done with integrity and honesty," Mr. Banister said after the verdict. "My clients wanted some answers to questions about what was required."
He added: "As a C.P.A., my duties are to my clients, to make sure they get the best results."
Mr. Banister resigned from the I.R.S. criminal investigation division in 1999 after he wrote a lengthy report asserting that no law requires the payment of taxes and that Americans were being tricked into paying them. The theories he has put forth have been uniformly rejected by the courts.
The I.R.S. declined to comment on the verdict. The prosecutor, Robert Twiss, said the verdict showed only that the jury did not believe the government had proved its case beyond a reasonable doubt.
The jury verdict appeared to reflect the different way criminal tax laws apply to taxpayers and to professional advisers who promote tax cheating, said Jay Adkisson, a tax lawyer in Laguna Nigel, Calif., who tracks tax protesters at the Web site quatloos.com.
"It is hard to convict promoters," Mr. Adkisson said. "Promoters make a lot of money off their marks, watch their marks go to jail for not paying taxes and then take advantage of a loophole that lets them prepare bogus returns that they characterize as protest returns" prepared at the direction of the client.
Mr. Banister was not charged with any failure to pay taxes.
Defense lawyers said that as a certified public accountant, his only duty was to prepare a return that accurately reflected the tax positions of his clients and to disclose them to the I.R.S.
The defense relied heavily on the testimony of the government's main witness, Dennis Brown, a longtime I.R.S. agent, who said it was proper for people to file protest returns as way to get their tax questions answered. The defense said that was what Mr. Banister and his client, Walter Thompson, had done.
Mr. Thompson, who was convicted in January, is serving six years for failure to withhold and turn over taxes from paychecks of workers at his Cencal Aviation Products in Lake Shasta, Calif.
Both men were charged with conspiracy, but acquitted of that charge in separate trials.
Mr. Banister was charged with helping to prepare three false tax returns, which said that no withheld taxes were due, and seeking reimbursement of taxes already paid.
Mr. Banister was greeted by cheers from more than a dozen fellow tax protesters and family members as he emerged from the courtroom of Judge William B. Shubb of United States District Court in Sacramento after the four-day trial ended, according to accounts by people who were there.
Judge Shubb had bailiffs remove two women from the courtroom for outbursts as the four verdicts of not guilty were read.
The verdict stirred concerns that it would encourage more Americans to refuse to pay taxes, which the Treasury, I.R.S. and the Justice Department have all acknowledged is a growing problem. The problem has prompted a renewed effort to seek civil injunctions against promoters like Mr. Banister and in some cases prosecutions of both tax protesters and their professional advisers.
"This is going to encourage thousands more people who were on the fence, who were paying taxes only because they were afraid they would be criminally prosecuted," said J. J. MacNab, a Maryland insurance analyst. She is writing a book about people who deny the legitimacy of the tax laws and attended the trial, which began June 14.
"If too many people do this, the tax system will collapse because it is based on people voluntarily complying" with the law, Ms. MacNab said.
Mr. Banister's lawyer, Robert Bernhoft, said the verdict was a sign that other taxpayers need not be afraid of confronting the government.
He said the case did not set a precedent.
"It just means that Joe Banister is not guilty of misconduct," Mr. Bernhoft said. "But I hope it sends a message to policy makers in Washington that they need to re-evaluate their policies in these cases."
Mr. Bernhoft said that "American citizens have the right to ask the government questions and the government has a duty to answer in good faith."
He added that "to proceed against Joe Banister with an indictment rather than simply answering his questions is un-American."
Former IRS CID Special Agent Joseph Banister Acquitted of Tax Fraud And Conspiracy
Government Unable To Prove U.S. Law Requires Income Tax Withholding or Filing
Sacramento California -- On Thursday June 23, a federal jury found former IRS Criminal Investigative Division (CID) Special Agent and CPA Joseph Banister not guilty of all counts alleging criminal tax fraud and conspiracy related to actions he took on behalf of a California business owner who had openly defied the IRS over several years by stopping withholding of all income and employment taxes from the paychecks of his workers.
Joseph Banister Trial Day 6, Tuesday June 21, 2005
WOW! What a day this was! It was a good day for Joe. Virtually Joe’s entire family was there; all his brothers and wives, Joe’s wife, mother, grandfather. The courtroom was packed with close to 60 people in the audience. There were Government lawyers or soon to be lawyers (judge’s clerks) in the courtroom. There was one reporter, one Warren Rojas from Tax Notes. out of D.C. (www.taxanalysts.com )who seemed to be open minded and interested. Ross, with us heard Joe give Warren a compliment that Joe appreciated his articles and collected them for the fairness and accuracy. Warren has done reporting on the We The People Petition for Grievances in Wash. D.C.
At 9:30 AM the Government started their closing argument. Mr. Twiss argued the closing statement for the prosecution (P). Twiss argued to the jury that Joe knew the law and knowingly violated the law; that Joe did not ask former IRS lawyer (now Department of Justice lawyer) about his research on the income tax, when he could, to see if he was wrong or not. Therefore, because Joe knew the law, he did willful aiding and assisting in defrauding the G.
Twiss went through some of the evidence of the case and focused on the 1040X returns, which rely on section 861 of the IRS code. Twiss said that Joe intentionally failed to show other sections of the code that show that the 861 section does not exclude other sections of the IRS code and that the law does not exclude other taxes from taxation.
Ronda Bellamy did not testify that Cencal did not have any sales or 1040 returns or 1040X returns, did not claim that Cencal did not have any sales. It obviously did. They just believe that due to the 861 argument that none of it was taxable.
Cencal had over $500,000 of gross receipts and over $100,000 of net profits for one of the years. For another one of the years Cencal gross receipts were over $600,000 and net profits over $70,000. These are all significant amounts that Joe tried to “wipe out” by putting zeros on the 1040X tax returns. How would you know Joe is willful in his actions: 1) Joe is a university graduate, worked in public accounting firms, was a CPA, and a very good IRS special agent at a level GS-13. 2)Gorini said that level 13 was a level that the agents competed for. All evidence shows that Joe was an excellent agent. Gorini said that Joe knew the special agents handbook and knew what was taxable or not.
Next, Twiss started talking about the video about Al Thompson (Al). Twiss acknowledged that Joe on this video did say that “I’m not here to tell you what to do and you have to make your own decisions.” However, does the context of the entire tapes support this? Twiss stated that Joe came to Redding where Cencal was located. His presentation was a tutorial by Joe and Al that their income was not taxable. Joe was not their visiting; he was dressed professionally sitting next to Al.
It was Joe that convinced Al that him and his employees’ wages were not taxable. It was clear Joe was leading Al and not the other way around. Joe drove a long way to Redding to do this.
Now Twiss is going to discuss the conspiracy to defraud the government (G). To have a conspiracy to defraud the G, there must be an overt act to do the conspiracy. There is no need for the conspiracy to be successful or accomplish the goals of the conspiracy. The attempt is enough.
Now Twiss will discuss the alleged overt acts of conspiracy starting with the time line of the acts. In July of 2000, Al stopped withholding from the pay of his employees at Cencal. In January of 2000 Joe prepared 1040X tax returns for Al’s ’96 and ‘98, which Joe and Al signed. The IRS received them in 3/2000. In 4/2000 the IRS rejected these tax returns. Joe’s emails to Al show that IRS has rejected these returns and had assessed frivolous tax return penalties for the returns. At the 7/2000 meeting of Cencal, Joe knew that the IRS had rejected his position on the 861 laws. At the 10/2000 meeting Joe and Al consistent with their position, Al said to his employees that if they get in trouble with the IRS that Joe would be available to help.
Joe did not correct Al or say that what Al said is not correct. Joe said he was there to give Al moral support. Joe said that when you have a CPA or an IRS Special Agent speak about these issues people take notice and Joe was trying to give weight to his tortured arguments on the law. Joe said “the seeds of the truth get spread partly depending on who is spreading it and in a sense that’s why I am here.” Joe says my tax cases at the IRS were about people who file taxes and actually earn more. This is the same thing here. Joe knew that the original taxes were higher.
In an email Al asked Joe if Joe had any objection to the letter that Al had prepared for his employees and Joe did not object. This shows their conspiracy. Agent Breslin from the 941 returns of previous years of Cencal calculated the percentage and amounts of taxes that should have been reported on the 941 forms. These numbers are big and clearly not reporting them obstructed the IRS.
Joe and Al were trying to get the moneys back for ’96, ’97 and not pay the ’98 taxes. They were unsuccessful in their plan. They made false presentations to the IRS, which is deceitful. They tried to trick the IRS in not collecting the taxes. Joe was willful. Joe was a CPA. Joe was a very successful CPA. No one had anything bad to say about Joe. Joe was an outstanding agent. Joe knew what he was doing. Gorini and DeLeonardo say that Joe knew the law, but Joe had rejected the law. Joe intentionally chose not to act in accordance with the law.
This part is about the 10/2000 video: David Kay Johnston of the New York Times flew from New York to be on this video. David presented a question about how you deal with the fact that the courts have rejected these arguments previously. Al said the tax court is a kangaroo court that refuses to accept court decisions, and Joe refused to correct him. Joe and Al set it all up, they knew it was wrong, but they did it anyway.
This part is about the Gorini deposition: 75% of Gorini’s testimony was that Joe knew what the tax law was, and since he was experienced and knowledgeable, he was willful in his acts. Gorini said Joe was honest however Gorini said that if Joe did not file that it would adversely affect his opinion of Joe’s honesty. As to Joe’s tax returns on the other video, Joe said that he had stopped filing tax returns. Twiss asked the jury to find Joe guilty of counts one, five, six, and seven.
At this time it was 10:35AM and the judge declared a 15 minute break.
Before you read Jeff’s closing arguments please take notice of this. It is regretful that we are unable to give you this as we heard it. It stirred such deep emotion in each of us to a greater degree because of what we know is going on. Hearing this is much more moving than just reading it. The emphasis at times is lost in just a casual reading of this. So, as you read this try and keep this in mind. Believe me it brought us to tears and we hope you can capture a part of what we did in hearing every word of this.
At 10:50AM closing arguments of Joe was began by Mr Dickstein (Jeff). Jeff read about a half dozen characteristics with which Gorini described Joe, such as outstanding, superior, professional, competent, moral, and thorough, etc.. And then Joe read a couple sentences from what appeared to us to be a quote from the Declaration of Independence about how the founding fathers petitioned the government for the redress of grievances which were met with repeated insult and injury. And individuals such as Samuel Adams, Patrick Henry, Thomas Jefferson, and other founding fathers of America signed these petitions.
Conspiracy is when people are trying to con other people of things that are not true, like the movie sting. To defraud the U.S. Government means to directly interfere, impede, obstruct, or defeat the IRS in the ascertainment, computation, assessment, or collection of taxes. It does not matter that Joe spoke to Cencal employees. In the U.S. people can say what they want.
Let’s see what this is really about. Joe had the audacity to talk to people. DeLeonardo did not answer Joe’s questions nor did the IRS after getting his report. Neither did the Congress or the White House. In an email of DeLeonardo, the government says that Joe is the most highly publicized tax protestor in America.
Not filing 941 tax returns for employees not filing is not relevant. You have a right in America to protest. This is not Communist Russia, East Germany, or Cuba. You don’t criminalize protest in America. You have to decide who is conning whom.
Not about the conspiracy charges: Employees are not required to pay employers share of taxes. By law they do not owe these taxes. Don’t let them hood wink you with the huge dollar amounts. This case is about paying taxes. The tax amount is irrelevant, it is the agreement.
Read the transcripts of IRS computers, the taxes were assessed, computed, ascertained, and collected way before that for years ’96, ’97. The transcript shows that for the year 1998 there was a hold on collections. Why? Maybe they were interested in bringing criminal charges instead. Maybe Al and Joe were suing the IRS? Use your common sense as to why.
Mr. Brown said that if someone wanted to challenge the tax, they would need to put down zeros on the second column of the 1040X tax return. And you would put your legal explanations on the following pages. Form 8275R is the form you would use to explain your legal position. Your legal position that your 1040X is based on. Joe says in his explanations of the 1040X says that his argument is consistent with the 16th amendment of the Constitution.
Al in an email to Joe says that he went to see his CPA about doing his 1040X tax returns. And the CPA tells Al that he needs to do his 1040X return by 10/15/2000 before the statute of limitations runs out. He doesn’t tell him not to do it. In another email Joe says to Al, that your 1040X returns are almost done. CPA’s are hired for doing that. That’s what CPA’s do. That’s their job.
In another email, Al tells Joe that he spoke with David Bosset about his experience with the IRS. And in this email he said that they wanted to get the 861 issue legally resolved. This is not a conspiracy. They want to use the proper avenues of the IRS.
In the letter to Cencal employees, Al tells his employees that he cannot tell the employees of Cencal what to do. The 1040X’s were not sent to some low level employee of the IRS. They were sent to the chief of the collection branch of the IRS. Not some low level employee that could be tricked.
Al saw and met with an IRS agent named Whipple in person. And this agent tells him what to do and how to do it. The only viable option to do seemed to be to do a 1040X return. Al contacted IRS agents Dianna Rossie which gave him the choice of doing an offer in compromise or a 1040X. This is a protest to get their legal issues resolved. And now the government is making a crime of it.
Look at the original 1040 tax returns and compare them to the 1040X returns. See it for yourself. And then look at the IRS letter that penalizes Al for the 1040X returns saying that Al’s argument that wages are not income is frivolous. But that is not what Al argued. This is a typical government argument. They change your question to what they want the question to be. And then they proceed to answer their own question. This is a con and you have to decide what side the con is on!
Mr. Brown says there are many levels of review at the IRS. The letters show that Joe tried to go to several levels of review at the IRS. Can you imagine that!
No W-2’s were in evidence. There is no evidence of W-2’s. Despite the fact that all original 1040 tax return numbers are on the 1040X’s first column and that you must put 0’s on the second column of the 1040X to properly modify the amount of taxes. And everything is out in the open. They are trying to say that it is a conspiracy.
The judge is going to tell you that simply meeting with others, speaking with them, and helping them is not a conspiracy. IRS did not audit the 1040 returns or the 1040X’s, which were protest returns. They could have but did not.
If you read the plain language of the law, and believe that is different from what the government is doing, it is not wrong to ask the government some questions. 1040X is the authorized procedure to protest the taxes.
Now Jeff read the quote of Pastor Nimholler who used to live in Nazi Germany. Pastor Nimholler said: “They first came after Jews, I did not speak up because I was not a Jew. Then they came after Communists, and I did not speak up because I was not a Communist. Then they came after the Union members, and I did not speak up because I was not a union member. And by the time they came after me, there was no one left to speak up for me.”
Next, Jeff read verbatim part of Joe’s speech on the video that was so moving that we did not take good notes of it. But it was really good! This is what we remember Joe said: “When I leave this earth I want to leave them (his children) with a government I can trust.” At the end of his closing arguments, Jeff told the jury: “…where’s the con? You know what the con is. Ladies and gentlemen, do the right thing!”
This concluded Jeff’s arguments at 12:05AM. The judge declared a lunch period until 1PM. At 1PM the government started their rebuttal to Jeff’s closing arguments.
The courts have said that since the G has the burden of proof in a criminal case beyond a reasonable doubt, that they get to argue the case in closing arguments twice and that the defense gets to argue only once. Mr Twiss started off by saying to the jury to not listen to rhetoric by Jeff. Joe is seeing this case about losing and winning and he is willing to do anything to win. Ronda Bellamy testified that until 7/2000 the W-2’s were turned in. Defendant is posturing himself as leader of the protest movement. He compares himself with great American heroes like Samuel Adams, Patrick Henry, Thomas Jefferson, as well as Gallilelo and Rosa Parks.
Joe can stand in front of the IRS or wherever he wants and rant and rave about the income tax or what it should be. A protest return on its face unequivivicly says it is a protest return. The question is, can the IRS figure out the taxes on the face of the return?” That was a lie! Based on the zeros on the tax return, it was a lie. DeLeonardo sent an email to Joe and he tells Joe that you know what the law is. Jeff objects to this. The judge reminds the jury that the argumentation of the lawyers is not testimony. That only the evidence is what they should base their decision on. Twiss says does Joe stop what he is doing? No. He just keeps doing it.
Joe says that due to the application of section 861, the amounts of the second column are zeros. But Joe zeroed out all the deductions as well. Even if 861 were a true belief, how come he put zeros, deductions on the exemption deduction line as well? Twiss said: “He wanted to get the refund. He wanted the money. That is what this is all about is money. It is not about patriotism, or about the American way, it is about money. Willfulness is the key issue. The judge will tell you that if Defendant has honest belief it is not willful. However, you don’t have to accept the assertion his position is correct. You analyze all (facts). He is a CPA, an Special Agent, a high performer who knew what the law was in the case in San Jose (with DeLeonardo).” “You can consider any evidence from any source. He was aware of the courts decisions and of the code sections. They have rejected his position.” “If Defendant who knows what the law is but looks for things to cloud it a bit and protest and not accept what law is does not have good faith.”
“All they say is to get answers to questions.” Income earned by Cencal ¾’s of a million of gross income is subject to tax. Should have taxes imposed. “He is guilty of conspiracy, aiding, and abetting…you should find him guilty on all counts.”
End of Prosecution’s closing argument rebuttal.
Judges Jury Instructions
Summarized not exhaustive: “Duty to follow law.. Indictment is not evidence.. Government has burden of proof. No presumption of guilt.
“Title 26 section 1, 6012, 6151(a), impose a income tax of employees of Cencal on 1040 due and owing at time of filing.” “Title26 section 3101(a) & (b), 3102(a) & (b), 3111(a), and 6151(a) impose several different employment taxes on employees such as FICA, Social Security, and Medicare. Tax imposed as employers share of SS.. 7.65% of wages paid. The withholding tax is based on tax tables reported on a 941. T26 USC says withholding tax is a credit.
Count one of the indictment Title 18 section 371 conspiracy is what Defendant (is charged with). Must be beyond a reasonable doubt. There was an agreement to impair, impede, obstruct, defeat by deceit. One member did one overt act.. a criminal partnership.. a crime of conspiracy to do something unlawful. There was a plan.. all agree to object of the conspiracy Defendant intends to commit.
Title 26 section 7601, 7610 are 2 lawful methods IRS can investigate or issue summons and calculate (the tax).
This was not quite completed, but have run out of time. At 4:30 P.M. the jury came back and wanted to see both videos and see the whole 26 CFR. The Judge said they cannot get the whole CFR because that was not part of the evidence. He told them they could see all or part of the videos, but only in open court. They will get to see the video portion of Gorini’s at 9 A.M. tomorrow and then the entire Joe/Al video following.
Don’t forget that Peymon started conducting a telephone conference call to report on Banister’s trial, every night that the trial goes on, at 7 PM, Pacific Time. To get on the Conference call to hear the report on Banister’s trial, call (702) 835-5000 and then enter access code 47778257#. In order to make sure that we have reserved enough number of call in spaces for the conference call, please call Freedom Law School at (760) 868-4271 and let them know that you will be calling in.
There is a trial going on in San Jose, California right now that will directly affect more American citizens than any other trial that has ever been held anywhere in the United States at any other time in our history. The importance of the outcome of this trial to the United States Government is so great that no national news media is covering it. This trial is more important than any trial Court TV has ever covered.
As a CPA and former IRS Criminal Investigation Division Agent, Joseph Banister is much more than one of the lead plaintiffs in the Right to Petition lawsuit. He is one of the finest citizens ever to have been raised in America. He is the perfect role model for anyone responsible for teaching others about good citizenship.
From: "Joseph Banister" To: "Angela Stark" Sent: Wednesday, June 14, 2005 Subject: Re: What happened?
The first day went VERY well. We believe a fair and open minded jury was selected. Jeff Dickstein put prosecutor Twiss off balance with his hard- during the direct testimony of the government's first witness, the IRS "expert" who was supposed to testify about the alleged falsity of the amended tax returns that were filed. Then, during cross examination testimony, Jeff got the witness to basically agree that it was appropriate to file an amended return in Al Thompson's circumstances and the information on the amended returns was adequate and proper.
Day 5 started off at 9am with agreement on the jury instructions. All the attorneys had gotten together and agreed to the jury instructions, but the judge wanted to go through them all and talk about some. There was some discussion between the judge and Jeff Dickstein where Jeff wanted jury instruction #20 to stay - (Since there was no external interference with the IRS, there was no impeding them). The judge got angry and said Jeff was getting defensive about keeping this in. The judge said “don’t get defensive with me - I am trying to help you. OK fine we will leave it the way it is.”
Next the judge asked if all attorneys agreed on the jury form. They agreed to Jeff’s version of the jury form. The judge wanted to see if Jeff wanted the individual “overt acts” listed on the jury form and Jeff said no - I don’t need to go there.
Next Jeff made a formal objection to three jury instructions being eliminated:
· 13 about the first amendment right to free speech · 14 about the people’s right to petition for redress of grievances · 17 saying just because Joe was a CPA he should not be presumed to know the law
The judge gave his formal reasons for taking these three instructions out. On instructions 13 and 14, the judge said he did not want the jury to determine 1st amendment or free speech rights, the court should determine free speech rights. On the 17th instruction, he did not need to say #17 because Joe is presumed innocent and he did not need to say Joe was not presumed to know the law. The judge called this a double negative. “It is not necessary for the court to negate a negative”, he said.
Next the judge asked Jeff if he had additional arguments for the Rule 29 and Jeff said he did not have additional arguments for it. The judge said he would let the jury get the case and rule on t he Rule 29 after the jury had reached a verdict.
The judge asked the prosecution how much time they will need for closing arguments and they said 2 hours! They also said they would need 1 hour for rebuttal. When the judge asked Jeff how much time he would need he said originally he thought one hour and he thought that the government would need 40 minutes. But now that he sees that the government is planning to take 2 hours he told the judge he did not know how much time he would need - it would be based on what the government said in it’s closing.
The judge said that if they finish by 3pm he would read the jury the instructions. If they are not done by 3pm then he will read the instructions Wednesday. He wants them to finish closings before 3pm so he can read the jury instructions that afternoon.
We will start at 9:30 am Tuesday with the jury hearing the closing arguments and then jury instructions. Fast and pray tonight.
Conference bridge pin code not working. Closing arguments were completed today. Case is now in the hands of the jury. Case is now in jury deliberations. No verdict was returned today. No verdict at this time. Case is now in jury deliberations. Keep tying pin code. They are trying to get it working.
UPDATE: Tonight only 712-824-4400 access code 47778257 in progress 7:19 pm PST.
Conference call tomorrow night 7 pm PST (10 pm EST).
Call (702) 835-5000 and then enter access code 47778257. In order to make sure that we have reserved enough number of call in spaces for the conference call, please call Freedom Law School at (760) 868-4271 and let them know that you will be calling in.
We will send out an e-mail report of Banister’s trial after each trial day. If you want to get added on the e-mail list of this report, e-mail email@example.com .
Joseph Banister Trial Day 1, Tuesday June 14, 2005
This trial update is from Sherry Jackson of Georgia, Ken Guthery of Florida, Peymon Mottahedeh and K. Ross Johnston from California.
Today the jury was selected. There was a pool of 60 jurists, but they almost ran out because many were excused due to preplanned/prepaid vacations. A few others had other type hardships, but finally 12 jurors and 2 alternates were selected.
The charges laid against Joseph Banister are:
• Conspiracy to defraud the government. This is based on Joe’s relationship with Northern California businessman Al Thompson. Joe met with Al and his workers and told his story and about his research about the Federal Income Tax. This meeting was videoed. There are two counts of Conspiracy. The government thinks that based on Joe’s involvement with Al Thompson’s non-filing payroll tax returns (941’s) the government lost $176,215. • Filing false tax returns. There are three counts of filing false tax returns because Joe prepared amended tax returns (1040X) for Al Thompson for 1996-1998. The government says that because the amended returns took money off of the original returns and made income zero, they were false. The government thinks that based on Joe’s filing of amended 1040’s they lost $83,454.
Mr. Twiss and Ms. Delaney are representing the government. Please pray that these people are confused and scattered from here on out. There were also two special agents helping these assistant US attorneys.
Jeff Dickstein and Bob Bernhoft are representing Joe. The judge is Shubb.
After jury selection they had to pick two alternates, so after lunch that was done.
The judge then told the jury that Al Thompson’s case was separated and was not part of this case. He also told the jury that the government has the burden of proof beyond a reasonable doubt. The judge said that he will give the law and they must follow the law whether they agree with it or not. He told them not to take anything he said as evidence. He told them that they could take notes but not to let the notes distract them from paying attention to the case.
Next, the government gave their opening statement. They just basically repeated the charges. When Joe’s attorney Jeff Dickstein did his opining he basically blew the conspiracy part away by saying that Al and Joe called the IRS and the IRS told them to file a 1040X if they had a dispute about the amount of tax owed. He also explained that conspiracy is something done in secret and everything they did was taped and that they even had a New York Times reporter in the meeting at Al’s business. Jeff made the point that Joe went to his bosses at the IRS and asked them to show him if he was wrong. Jeff also made the point that Joe had been to DC and talked to the president’s advisor, congress and others about answering questions concerning the misapplication of the income tax. Jeff noted that the government still has not answered the questions and that he hopes we will get answers during this trial. Dickstein told the jurors that “the government has to get through you to get to Banister) the (jury) in this trial, and that is the American way”. He said Joe was born in law enforcement and investigation, just like Tiger Woods was born a golfer. He said that Joe was probably the only person here that has actually read the code, and that the jury will find out who has read the book and who hasn’t, and who wants to open the book and who wants to keep the book closed. The judge said he was being argumentative and at that point Dickstein sat down.
Next, the Government presented their first witness, which was Dennis Brown, IRS agent revenue (audit/examination) agent of 28 years. He has an active CPA, but Jeff ripped him up. This agent had to admit that: • If you made a mistake on your return you need to file a 1040X to correct it (like Banister helped Thompson with.) • The IRS can enforce and collect tax even if you have not filed. • Thompson’s amended 1040 x returns had the proper form attached for stating Thompson’s legal explanation for the changes. • That the 1040X is a voluntary form and not a required form
Jeff asked the revenue agent the definition of individual and the government asked why. Jeff said “because I know it’s not in the code and I am going to impeach him when he does not find it” the judge overruled him.
After this witness the government did not have any more witnesses because they thought the jury selection was going to take all day. So the government wanted to show the tape of Al Thompson and Joe talking to Al’s workers. Al talked about 10 minutes and then Joe started speaking. Joe’s first comment on that video was that he is not there to “tell anyone what to think or what to do.” WOW! Then he got even more credible and humble. They let the video play for about an hour and when they noticed a juror falling asleep the judge called it a day because it was 4:30.
We had about 25 people on our side today. The trial starts Wednesday at 10:30. Stay tuned. We will send out a e-mail report of Banister’s trial after each trial day. If you want your friends to get added on the e-mail list of this report, e-mail firstname.lastname@example.org .
In addition, Peymon started conducting a telephone conference call report on Banister’s trial, every night that the trial goes on, at 7 PM, Pacific Time. To get on the Conference call to hear the report on Banister’s trial, call (702) 835-5000 and then enter access code 47778257. In order to make sure that we have reserved enough number of call in spaces for the conference call, please call Freedom Law School at (760) 868-4271 and let them know that you will be calling in.
Yours in truth, freedom and justice, Ken, Ross, Sherry and Peymon
Joseph Banister Trial Day 4, Friday June 17, 2005*
The trial continued with playing of the edited video taped deposition (testimony under oath) of Robert Gorini, who was Joe Banister’s supervisor at the IRS, which was recorded on May 20, 2005. Only a small portion of the video tape had been deleted by agreement of both parties as not relevant.
Mr. Gorini studied accounting and got a degree in commerce. He got a job with the IRS as a criminal investigator and special agent right out of the university. With his four year degree in hand in December, 1971. In 1996-97 Gorini and Banister served on the finance committee of their church together. He met Joe at the lobby of the building where IRS and Peat Marwick, Joe’s employer, were both housed. They agreed to have lunch on another day together. On that lunch date Joe showed serious interest in becoming a federal officer. Gorini believed that Joe had the potential to be a good IRS special agent. Gorini gave Joe the forms and contact information to apply for a position with the IRS.
Gorini was a group supervisor with the IRS. A group supervisor supervises 12-14 agents. Gorini group emphasized the work of narcotic traffickers. Joe was originally in a group headed by Bridget Marquetta in the San Francisco office of criminal division (CID) of the IRS. Joe ended up in Gorini’s group after Marquetta was assigned to another position with the IRS, and her group members were put in two other groups, one of which was headed by Gorini.
Gorini stated that lower level agents are graded 5-12. Employees with grades 5-9 need assistance, 10 some independence, 11-12 more independence and grade 13 should be able to handle any kind of investigations on their own. When Joe was transferred to Gorini’s group he was already a grade 13 agent. Joe lived in San Jose but worked in the San Francisco Office, but another employee of the IRS worked in San Jose, but worked in San Francisco so they switched offices.
Then exhibit #4 was shown to Gorini which is a September 15, 1998 e-mail from Gorini to Joe. In this e-mail Gorini recommended a performance and special act award be given to Joe. Furthermore, Joe performed above and beyond expectations. Joe was motivated to do his job, accept assignments, worked well with others and got the job done.
Gorini further testified that to become a grade 13 agent, special agents have to perform well and compete with their colleagues for such a grade. Next, exhibit # 5, which is a form that the IRS used to grade candidates for grade 13.
Gorini testified that it was common knowledge that Joe was a good employee. Gorini stated that page 5 of exhibit 5 has a list of criteria for promotion to grade 13, such as application of criminal statutes. Special Agents are given training on criminal tax laws. Most of these criminal tax laws are section 7201 through 7207 as well as section 7212. Gorini stated that agents needed to understand the definition of words such as the term income, and that Joe was very articulate and a good report writer.
At the end of Joe’s career with the IRS, Joe had questions about the legality of the income tax that he read through. Joe had talks with Gorini about his research on these issues and had asked Gorini if he could research these issues on his own time and expense. He stated that if he could not get them addressed he might not be able to continue at his job with the IRS.
Gorini stated that when he had his special agent training, he was taught various things the same as Joe. Gorini was given a copy of the US Constitution, but that the reading and understanding of it was not required. Furthermore, special agents are given minimal legal research training. Instead they usually seek assistance and guidance from legal counsel.
Gorini considers Joe to be an honorable man. At this time exhibit #10, which is a topical law report from the Commerce Clearing House (CCH) was introduced. Gorini stated that Internal Revenue Manuals are the guides for the special agents which direct them in doing their job.
Exhibit #11, which is a Friday, June 6, 1998 e-mail was introduced to Gorini. In this e-mail Gorini had stated that Joe had good writing skills and was most professional.
Exhibit #12, which is a November 10, 1998 letter of DOJ lawyer Thomas DeLeonardo(the same DOJ tax lawyer that testified earlier in this trial about his relationship with Joe). This e-mail was Cc to Gorini as well as to Paul Barville who was the supervisor of the entire CID office of the IRS in San Jose, California. In his e-mail, Mr. DeLeonardo expressed his pleasure to work with Joe and further stated that Joe performed exemplary, enthusiastic and outstanding work.
Exhibit #13was a January 13, 1999 e-mail of Gorini to Joe which mentioned that an organized crime enforcement tax force training was going to take place in the near future. At this training about 125 agents were to get the training. The trainer of this class, Alex, had high regard for Joe’s work and specifically requested to have Joe’s help in teaching this training class.
Gorini stated that it was common knowledge that Joe did good work.
Exhibit #14 was a March 20, 1999 evaluation of Joe, which was very complimentary of Joe’s work.
Exhibit 15, was a document that showed Joe and Gorini to be members of the NRA and that both attended city counsel meetings about gun issues.
Exhibit #16 is a two-page declaration of Gorini dated March 20, 1998 in which he states that he has never known Joe to be dishonest or lie.
Exhibit #18 is a February 8, 1999 four-page letter from Joe to Gorini which was attached to Joe’s report about the federal income tax which was written to the commissioner of Internal Revenue. Gorini was not happy about receiving this letter even though the night before Joe had told Gorini that it would be forthcoming and would be on his chair in the morning.
At these times Gorini had become a friend of Joe. In addition to working together, they ran together and visited each other’s homes. Joe was an excellent worker, nice guy, moral and ethical. Joe took his oath his office as seriously as anyone he has known. Joe asked Gorini to forward his letter and his report to the commissioner of the Internal Revenue. Gorini gave the above documents along with his own cover letter to his supervisor to Paul Varville.
No one at the IRS answered Joe’s questions. IRS counsel advised Gorini to put Joe on administrative leave.
Gorini was asked “Do you recall saying that if you had twelve special agents like Joe that they wouldn’t need a supervisor.”
At first Gorini said “I don’t remember saying that.”
Dickstein asked ”Is that something you could have said.”
Gorini said “ I could have.”
Dickstein said “Would you have meant it?”
Gorini said “If I said it, I would have meant it.”
Gorini stated that he had recommended overall performance awards for Joe and he believes Joe is an honest person. Gorini stated that the IRS special agents handbook guides the actions of IRS special agents. He stated that IRS special agents were required to be familiar with it and Joe was familiar with it. When asked what section of the code someone in Joe’s position was required to file a tax return , Gorini stated that 30-35 years ago he might have studied the issue, but he certainly doesn’t remember it now. Gorini stated that Joe was an honest man.
Then the government lawyer Twiss asked Gorini “What is your definition of an honest man.”
Gorini said “Someone who is honest and moral.”
Twiss asked “Would it change your opinion of Joe if you heard that he stopped filing income tax forms?”
Gorini said “Other than that he is an honest man.”
Twiss asked ”Would it change your opinion of this honest man if he was a CPA and he stopped doing that?”
Gorini said “I would have reservations about that.”
Dickstein said “Would it change your opinion if you knew he had sent the money in to the IRS to hold?”
Gorini said “Yes” It seemed he was surprised to learn Joe had sent in the money.
The video finished at 10:40 a.m. and there was a break until 10:55 a.m.
At 10:55 a.m. the trial resumed and Joe Banister’s lawyers, to every one’s surprise, stated the defense rests (no more defense will be presented to the jury). The judge was very surprised too.
The judge inquired of Joe’s lawyers if they had consulted with Joe about this. They told the judge yes and then the judge said “Why didn’t you give us more notice?”
Dickstein replied “We hadn’t made that decision until late last night.”
The judge said at that time that this afternoon and Monday they would work on the jury instructions and Tuesday at 9:30 a.m. jury instructions and closing arguments would be given to the jury.
The judge brought the jury in and gave his previous admonitions such as, not making up their mind about the case, not discussing the case with anybody, not seeking any information about the parties in the case in the media or on the internet.
There was a lunch break until 1:30 p.m. When we started at 1:30 p.m. both sides had previously given the Judge their prepared jury instructions. The jury instructions describe to the jury the laws that apply to this case. The jury needs to know these laws so that they can properly apply the facts that they find about this case to the applicable law. Judge Shubb expressed his displeasure with the poor quality of the jury instructions proposed by the government.
After some attempts to correct the jury instructions both parties proposed they take an hour break to sit down together and hash out the final jury instructions. The cleaning up and finalizing of the instructions was concluded at 4:45 p.m. and both parties agreed to print out a corrected version of the agreed jury instructions to bring to court on Monday. On Monday in addition to reviewing jury instructions one more time, Joe Banister’s rule 29 Motion to dismiss will be heard one more time.
Yours in truth, freedom and justice, Ken, Ross, Sherry, Peymon and Harry
For mailed donations, send to:
Joseph Banister Legal Defense Fund P.O. Box 90239 San Jose, California 95109-4239
This report was prepared by Joseph R. Banister, who graduated in 1986 from San Jose State University with a
Bachelor's Degree in Accounting. He spent three years at KPMG Peat Marwick on their professional staff as a
senior tax specialist and staff auditor. He then spent nearly two years in the venture capital industry during
which time he became a licensed Certified Public Accountant (CPA) in the State of California. Mr. Banister left
public practice as a CPA in 1993 when he accepted appointment as a Special Agent (criminal investigator) in the
Department of the Treasury, IRS Criminal Investigation Division (IRS-CID). Unable to resolve conflicts between
the way the IRS administered the Federal Income Tax and Mr. Banister's oath of office, he resigned from IRS-CID
on February 25, 1999.