Interesting NY Times article about the Joe Banister case (blogged here yesterday) by David Cay Johnston, Protesters Win a Case Over I.R.S.:

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 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…

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.