IRS Office of Professional Responsibility to Disbar CPA

An administrative law judge has issued a decision and ordered that Joseph R. Banister be disbarred from practice before the Internal Revenue Service. Banister is a CPA from San Jose, CA and a former IRS criminal investigation agent.

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.

According to public documents, the judge found that Banister provided erroneous advice to taxpayers, including improperly advising them that they were not required to file returns because the 16th Amendment to the Constitution was not properly ratified. Banister also provided erroneous advice that returns were not required because Sections 861 through 865 of the Internal Revenue Code define “income” in a manner which excluded their earnings. The original complaint against Banister was later amended to charge Banister with not filing his own returns for tax years 1999-2002.

Judge William B. Moran in his Dec. 24, 2003 decision said that “the very significant problem with Banister’s advice to his clients is that it is absolutely wrong.” Judge Moran further noted that “Banister’s assertions have been addressed by so many federal courts that they are no longer afforded the dignity of repeating the explanations as to why the claims are meritless.” The decision followed a public hearing requested by Banister, which was held in San Francisco on December 1, 2003. The judge could have ordered disbarment, suspension or a reprimand, but he determined that nothing short of disbarment was appropriate under the facts. The judge’s decision will become the final decision of the agency unless it is appealed within 30 days.

In an unrelated case, the Department of Justice announced, on Dec. 31, 2003, that a preliminary injunction has been issued barring a lawyer and a certified public accountant, and organizations that they are affiliated with, from representing taxpayers before the Internal Revenue Service, preparing Federal tax returns, and otherwise obstructing IRS tax administration through frivolous and harassing tactics. The Justice Department has sought and obtained injunctions recently against a number of tax-scam promoters. More information about these cases is available on the Justice Department Web site.

As part of the broader effort to strengthen professional standards, IRS Commissioner Mark W. Everson recently selected Cono Namorato as the new Director of the Office of Professional Responsibility. “Cono shares my concern about the erosion of professional standards among some attorneys and accountants,” Everson said. “His appointment should signal an expectation that tax practitioners live up to their professional obligations.”

The IRS has taken several steps recently to enhance the effectiveness of this Office of Professional Responsibility. Over the last year, staff of the office has been doubled and its director now sits on the IRS Enforcement Committee, a panel of senior agency executives who meet regularly to develop strategies on the top compliance problems facing the IRS. The Commissioner also recently asked this office to conduct a broader review of the IRS’ overall relationship with the practitioner community.

You may like these other stories...

For bitcoin users, the taxman cometh. And you best know how to calculate taxes owed on what the IRS calls convertible virtual currency.In March 2014, the IRS issued Notice 2014-21, which declares virtual currency will be...
Majority of House of Representatives urges leadership to preserve cash method of accounting for tax purposesA bipartisan majority of the House of Representatives – 233 members – has signed a letter urging House...
More than 1 million tax payments have been processed so far in 2014 through IRS Direct Pay, a free web-based payment system that debuted earlier this year, the tax agency announced on Wednesday.Available through the Pay Your...

Already a member? log in here.

Upcoming CPE Webinars

Sep 18
In this course, Amber Setter will shine the light on different types of leadership behavior- an integral part of everyone's career.
Sep 24
In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards. A dashboard condenses large amounts of data into a compact space, yet enables the end user to easily drill down into details when warranted.
Sep 30
This webcast will include discussions of important issues in SSARS No. 19 and the current status of proposed changes by the Accounting and Review Services Committee in these statements.
Oct 23
Amber Setter will show the value of leadership assessments as tools for individual and organizational leadership development initiatives.