Monday, September 14, 2020

No Suspension For Misdemeanor Tax Conviction

An attorney's misdemeanor tax convictions presented a question of first impression in New Jersey, resulting in a  public censure by the New Jersey Supreme Court.

The Philadelphia Business Journal reported on the criminal case. 

The Disciplinary Review Board recommended that result. 

On April 11, 2017, a grand jury for the EDPA charged respondent and her estranged husband, Edward Millstein, with tax offenses. Respondent was charged with two misdemeanor counts of failure to pay taxes to the Internal Revenue Service (IRS), for tax years 2010 and 2011, in violation of 26 U.S.C. § 7203. Millstein, who also is an attorney, was charged with felony tax evasion, in violation of 26 U.S.C. § 7201, and two misdemeanor counts of failure to pay taxes, in violation of 26 U.S.C. § 7203.

The indictment alleged that, in 2010, respondent and Millstein willfully failed to pay $143,473.35 in taxes, and that, in 2011, they willfully failed to pay $153,560.69 in taxes. Only Millstein was charged with tax evasion, however.

The attorney pled guilty to the two misdemeanors

Ultimately, in addressing both respondent and Millstein, Judge Rufe stated that these tax offenses occurred “because you two were so busy fighting, and trying to avoid the inevitable, you paid lip service to the law. Two lawyers paid lip service in law. You should be ashamed of yourselves.”

She was placed on five year's of probation.

Sanction

This is a case of first impression, as respondent noted, because the Court has never disciplined a New Jersey attorney solely for the failure to pay income taxes, in violation of 26 U.S.C. § 7203. In our view, however, both the reasoning and the appropriate quantum of discipline for respondent’s offenses are well-charted by the Court’s precedent for failure to file income tax returns, a violation of the same applicable statute...

In light of the above precedent and the compelling mitigation presented by respondent, we determine that a suspension is not warranted. Respondent has satisfied her outstanding tax liability, and has presented significant mitigation, as in Vecchione. Further, although factual similarities are evident, she does not have a disciplinary history like similarly situated attorneys who received a one-year suspension, as in Hand. Moreover, we note that Williams was decided in December 2001, before censure became a recognized form of attorney discipline, pursuant to R. 1:20-15A(a)(4).

We determine that, on balance, a censure is the quantum of discipline necessary to protect the public and preserve confidence in the bar.

Two board members recommended a six-month suspension. 

Pennsylvania had imposed a public reprimand. (Mike Frisch)

https://lawprofessors.typepad.com/legal_profession/2020/09/an-attorneys-misdemeanor-tax-convictions-presented-a-question-of-first-impression-in-new-jersey-resulting-in-a-public-censue.html

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