ATTORNEY GRIEVANCE COM'N OF MARYLAND v. Atkinson

• Decision Date: 14 February 2000
• Docket Number: Misc. AG No. 27
• Parties: ATTORNEY GRIEVANCE COMMISSION OF MARYLAND v. Rena Vaughn ATKINSON.
• Court: Maryland Court of Appeals

745 A.2d 1086

357 Md. 646

ATTORNEY GRIEVANCE COMMISSION OF MARYLAND v. Rena Vaughn ATKINSON.

Misc. AG No. 27, Sept. Term, 1998.

Court of Appeals of Maryland.

February 14, 2000.

Melvin Hirshman, Bar Counsel and James P. Botluk, Asst. Bar Counsel, for the Attorney Grievance Commission of Maryland, petitioner.

Reginald W. Bours, III, Rockville, for respondent.

Argued before BELL, C.J., and ELDRIDGE, RODOWSKY, RAKER, WILNER, CATHELL and HARRELL, JJ.

RAKER, Judge.

The Attorney Grievance Commission (AGC), through Bar Counsel, charged Rena Vaughn Atkinson, Respondent, with several violations of the Maryland Rules of Professional Conduct, arising out of her failure to pay federal and state income taxes for the years 1986 through 1996. Pursuant to Maryland Rule 16-709(b), we referred the charges to Judge E. Allen Shepherd, of the Circuit Court for Princes George's County, to conduct a hearing and make findings of fact and proposed conclusions of law. After hearing evidence, Judge Shepherd filed a memorandum opinion in which he made detailed findings of fact and conclusions of law. He concluded that Respondent had violated Maryland Rules 8.4(b), (c) and (d). Rule 8.4 Misconduct reads, in pertinent part, as follows:

It is professional misconduct for a lawyer to:

* * * * * *

(b) commit a criminal act that reflects adversely on the lawyer's honesty, trustworthiness or fitness as a lawyer in other respects;

(c) engage in conduct involving dishonesty, fraud, deceit or misrepresentation;

(d) engage in conduct that is prejudicial to the administration of justice....

Respondent filed exceptions to Judge Shepherd's findings of fact and conclusions of law, all of which we shall overrule.

I.

Following an evidentiary hearing, Judge Shepherd, being persuaded by the clear and convincing evidence presented at the hearing, filed the following findings of fact and conclusions of law:

FINDINGS OF FACT

Respondent is a member of the bar in both the state of Maryland and the District of Columbia. She is a 1983 graduate of the Columbus School of Law, Catholic University of America, where she took courses in income tax law.

After she was admitted to the bar of Maryland in 1984, Respondent worked as an associate with the law firm Deckelbaum, Ogens, and Fisher. While employed with the firm, Respondent filed her tax returns¹ and paid any tax liability which exceeded the amount the firm had already withheld on her behalf.

Respondent left the firm in 1988, and has been a sole practitioner ever since. Her practice consists mostly of estate and probate work. Her principal office is in the District of Columbia, however, she sometimes works out of her home in Hyattsville, Maryland. She has no employees.

From 1988 to 1996, Atkinson failed to file joint federal and state income tax returns for herself and her husband. With each passing year, Respondent's tax arrearages grew until they had a "snowballing" effect. Respondent knew that she could not afford to pay the back taxes, and therefore did not file the returns. Instead, Respondent allowed the arrearages to mount, and simply avoided the situation. At all times, Respondent was aware that she had a legal obligation to file tax returns.

In 1994, Respondent and her husband went to the Internal Revenue Service (I.R.S.) Office in Largo, Maryland. They received several forms pamphlets from the I.R.S. help desk assistant, but they did not speak with an agent. Nor did Respondent make any other arrangements to meet with an agent at a later date.

Instead, it was the I.R.S. that brought this matter to light. In early 1997, I.R.S. Agent Bill Rush contacted Respondent. Upon Rush's request, Respondent attempted to gather information so that she could prepare tax returns for the years 1988 through 1996. As she went through her papers, Respondent discovered tax returns for the years 1986 and 1987 that had been prepared, but never mailed. In April of 1997, Rush notified the Attorney Grievance Commission of Respondent's failure to file returns and pay taxes. Respondent has since filed [a] return for each year from 1986 through to the present, except for 1988. Respondent was unable to find sufficient documentation to file her return for that year.

The I.R.S. has determined that Respondent owes approximately $93,000 in back taxes and penalties. Respondent has made one payment of $15,546.61 toward that balance. Respondent has made no other payments toward her federal or state tax arrearages.

During the years in which she failed to file tax returns, Respondent earned as much as $61,000 a year. Due to the nature of her probate and estate practice, however, Respondent's cash flow was irregular. While evidence showed that Respondent has two mortgages on her home and is the primary bread-winner for her family of four, there was no evidence presented that Respondent suffered any extraordinary financial hardship during the years in question. Nor was there any evidence that Respondent suffered from any debilitating physical or mental illnesses or conditions that would have affected her ability to file tax returns or make payments.

CONCLUSIONS OF LAW

Based upon the foregoing Findings of Fact, the Court finds that Respondent willfully, knowingly, and purposely failed to file income tax returns from 1986 to 1996. The willful failure to file timely income tax returns is a crime. The Court need not find that Respondent actually intended to defraud the government; willful failure is sufficient to constitute a crime. Additionally, willful failure to file income tax returns adversely reflects on the lawyer's fitness to practice law. Therefore, Respondent clearly violated Rule 8.4(b) of the Maryland Rules of Professional Conduct.

The willful failure to file timely income tax returns also violates Rule 8.4(c) of the Maryland Rules of Professional Conduct. The rule states that an attorney cannot engage in any conduct involving dishonesty, fraud, deceit, or misrepresentation. In the case at bar, Respondent knew that she had failed to file tax returns when she went to the I.R.S. office in Largo in 1994. She received information on how to handle the situation, and then again failed to act. Her failure to contact an I.R.S. agent to remedy the situation was, at best, dishonest. Had she been more forthcoming, the "snowballing" effect could have been avoided, or at the very least diminished. The Court finds that Respondent's inaction violated Rule 8.4(c) of the Maryland Rules of Professional Conduct.

Finally, the Court finds that Respondent violated Rule 8.4(d) of the Maryland Rules of Professional Conduct. Respondent's willful failure to file her federal and state tax returns was prejudicial to the administration of justice. [All footnotes but first omitted.]

II.

Bar Counsel took no exceptions to Judge Shepherd's findings of fact or conclusions of law, offering only a recommendation as to the appropriate sanction to be imposed. Bar Counsel recommends that Respondent be suspended for a period of three years.

Respondent excepts to two of the hearing court's conclusions of law, specifically that her failure to file and pay income taxes violated both subsections (b) and (c) of Rule 8.4.² Respondent concedes that failure to file is conduct prejudicial to the administration of justice and, therefore, that she violated Rule 8.4(d). Respondent maintains, however, that the hearing court incorrectly found that she violated Rule 8.4(b) merely because she failed to file income tax returns. In this regard, she relies primarily on our decision in Attorney Grievance Comm'n v. Post, 350 Md. 85, 710 A.2d 935 (1998). As we shall explain, we find Post to be significantly distinguishable from the present case.

We first point out that this Court, by Order dated April 15, 1986, adopted the Maryland Rules of Professional Conduct, effective January 1, 1987, along with the comment to each Rule. With respect to failure to file an income tax return, the Comment to Rule 8.4 begins:

Many kinds of illegal conduct reflect adversely on fitness to practice law, such as offenses involving fraud and the offense of willful failure to file an income tax return.

Moreover, this Court had previously held, in Attorney Grievance Comm'n v. Walman, 280 Md. 453, 374 A.2d 354 (1977),

That the crime of which respondent stands convicted [—wilfully and knowingly failing to file his federal income tax return for the year 1968³—] represents conduct prejudicial to the administration of justice and, under the particular circumstances of this case, reflects upon his fitness to practice law is beyond debate.

Id. at 463, 374 A.2d at 360 (citations omitted). See also Attorney Grievance Comm'n v. Baldwin, 308 Md. 397, 407, 519 A.2d 1291, 1296-97 (1987) (noting existence of tax cases involving failure to file that reveal type of disorganized behavior with regard to continuing responsibilities that would alarm any client whose affairs demanded systematic attention).

Turning to our decision in Post, the attorney's misconduct there was that he had failed to file withholding income tax returns in a timely manner, to remit the taxes withheld, and to hold the withheld taxes in trust, resulting in his being charged with a violation of Rule 8.4(b). The hearing court, having noted that it did not believe, and that Bar Counsel did not contend, that Post intended to defraud the State Comptroller or the federal authorities, and being unconvinced that Post's conduct adversely reflected on his honesty or trustworthiness, nevertheless concluded that the conduct reflected adversely on his fitness as an attorney, in violation of Rule 8.4(b). Post, 350 Md. at 94, 710 A.2d at 939. This Court sustained Post's exception to this conclusion by the lower court. Distinguishing the facts in Post from the circumstances in Walman, we found it significant that the hearing court found Post's actions not to have compromised his honesty or trustworthiness, instead identifying the attorney's problem as...