Attorney Grievance v. O'Toole

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Attorney Grievance Commission v. Thomas O Too le, Misc. Docket AG No. 3, September Term 2003. [Maryland Rules of Professional Conduct 8.4(b) & (d) (Misconduct); held: Respondent engaged in conduct that is prejudicial to the administration of justice in violation of Maryland Rule of Professional Conduct 8.4 (d) by failing to timely file Maryland withholding tax returns and federal and state income tax returns over a period of three years. Respondent also committed a criminal act that reflects adversely on his fitness as a lawyer in violation of Maryland Rule of Professional Conduct 8.4(b) by failing to file state and federal income tax returns over a three-year pe riod. For thes e violations, R esponde nt shall be suspended from the prac tice of la w for t hirty days.] IN THE COURT OF APPEALS OF MARYLAND Misc. D ocket A G No . 3 September Term, 2003 ATTORNEY GRIEVANCE COMMISSION OF MARYLAND v. THOMAS O TOOLE Bell, C.J. Raker Wilner Cathell Harrell Battaglia Eldridge, John C. (retired, specially assigned), JJ. Opinion by Battaglia, J. Filed: February 18, 2004 The Attorney Grieva nce Comm ission of Maryland ( Pe titioner or Bar Coun sel ), acting through Bar Counsel and pursuant to Maryland Rule 16-7 51(a), 1 filed a petition for disciplinary or remedial action against respondent, Thomas O Toole, Esquire, on April 4, 2003. The Petition alleged that O Toole, who was admitted to the Bar of this Court on December 19, 1989, violated several Maryland Rules of Professional C onduct ( MR PC ), specifically MRPC 1.15 (Safekeeping Prope rty) 2 and MR PC 8.4 (M isconduct), 3 by failing 1 Maryland Rule 16-751(a) provides: (a) Commencement of disciplinary or remedial action. (1) Upon approval of the [Attorney Grievance] Commission, Bar Counsel shall file a Petition for Disciplinary or Remedial Action in the Court of Appeals. 2 MRPC 1 .15, in pertinent part, states: (a) A law yer shall hold pro perty of clients or third persons that is in a lawyer s possession in connection with a representation separate from the lawyer s own property. Fun ds shall be k ept in a separate account m aintained p ursuant to T itle 16, Chapter 600 of the Maryland Rules. Other property shall be identified as such and appr opriately safeguard ed. Com plete records of such account funds and of other property shall be kept by the lawyer and shall be preserved for a p eriod of five years after termination of the representation. (b) Upon receiving funds or other property in which a client or third person has an intere st, a lawyer shall promptly notify the client or third person. Except as stated in this Rule or otherwise permitted by law or by agreement with the client, a lawyer sh all promptly deliver to the client or third person any funds or other property that the client or third person is entitled to receive and, upon request by the client or third perso n, shall promptly render a ful l accounting rega rding suc h pro perty. Bar C ounse l later aba ndone d its cha rge und er MR PC 1.1 5. 3 MRP C 8.4 states in relevant pa rt: It is professional misconduct for a lawyer to: (a) violate or attempt to violate the Rules of Professional to file various s tate and fed eral tax return s from 19 98 to 2001 and by failing to pay various federal and state taxes for the same period. In accordance with Maryland Rules 16-752(a) and 16-757(c), 4 we referred the petition to Judge T homas W axter, Jr., of the Circuit Court for Baltimore City for an evidentiary hearing and to make findings of fact and conclusions of law . On August 18, 2003 , Judge W axter held that hearing and on August 26, 2003, issued an opin ion in wh ich h e fou nd, b y clear and convincing evidence, that O Toole violated Conduct, knowingly assist or induce another to do so, or do so through the acts of an other; (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 dish onesty, fraud, dec eit or misrepresentation; (d) engage in conduct that is prejudicial to the admin istration o f justice . . . . 4 Maryland Rule 16-752(a) states: (a) Order. Upon the filing of a Petition for Disciplinary or Remedial Action, the Court of Appeals may enter an order designating a judge of any circuit court to hear the action and the clerk re sponsible for m aintainin g the rec ord. The order of designation shall require the judge, after consultation with Bar Counsel and the attorney, to enter a scheduling order defining the extent of discovery and setting dates for the completion of discovery, filing of motions, and hearing. Maryland R ule 16-75 7(c) states in p ertinent part: (c) Findings and con clusions. The judge sh all prepare and file or dictate into the record a statement of the judge s findings of fact, including findings as to an y evidence regarding remedial action, a nd con clusion s of law . . . . -2- MRPC 8.4(d) by failing to file federal and state individual income tax returns for 1998, 1999, and 2000 and by failing to file Maryland withholding tax forms for 1998, 1999, and 2000. Bar Counsel filed several exc eptions to Ju dge Wa xter s findin gs and co nclusions. O Toole did not take any exce ptions. We overru le all but one of Bar Counsel s exceptions and conclude that the appropriate sanction in this case is a thirty-day suspension. I. The Hearing Judge s Opinion Judge Waxter s opinion of August 26, 2003 summarized the case history and presented his findings of fact and conclusions of law: CASE HISTORY A stipulation of the parties was introduced as joint exhibit number one wherein it was agreed that the Respondent, Thomas O Toole, was incorporated as Thomas O Toole P.C., and as such was required to file quarterly withholding tax forms and annual withholding tax consolidation forms, numbers 506 and 508 , with the Comp troller of the State of Maryland, indicating the amount of withholding tax that was to be withheld from any wages. Respondent acknowledged that he failed to file forms 506 for eight quarters (quarters ending September 1998, December 1998, March 1999, June 1999, September 1999, December 1999, March 2000 an d June 20 00), as we ll as the accompanying forms 508 which consolidated the quarterly forms on an annual basis. It is also ad mitted that du e to the Re sponden t s failure to file the -3- required returns, the Comptroller of the State of Maryland, on or about February 7, 2001, filed a notice of lien for unpaid withholding taxes. Add ition ally, on or about October 19, 2001, the Comptroller issued writs of garnishment against the Respondent s bank accounts. On or about December 4, 2001 it is acknowledged that the Respondent paid the Comptroller the sum of $7,354.98 which co nsisted of $ 4,840 in un paid withh olding taxe s, as well as interest and penalties. It is further adm itted that the R esponde nt filed his 1998 withholding tax forms on or about January 16, 2002, his 1999 withholding tax forms on or about September 10, 2002, and his 2000 Maryland withholding tax forms on or about September 10, 2002. The Respondent admits that he failed to file Maryland state income tax returns and federal income tax returns for the years 1998, 1999 and 2000. It is admitted th at all returns were filed in satisfaction by September 2002, and all tax assessments, penalties and interests were paid as of December 2001. Respondent has been in full compliance since 2002. Although there is no specific claim that the Respondent failed to pay his taxes, Petitione r asserts that R esponde nt failed to file his withholding tax forms, and state and federal income tax forms for three years 1998, 1999 and 2000. FINDINGS Following testim ony, the offering of numerous exhibits and tax returns, -4- and argu ment by cou nsel, this Cou rt makes the following findings o f fact: 1. The Respondent is now in joint practice with Neal Baroody, at 201 North Charles Street in Baltimore, Maryland. Prior to M ay, 2003, over an extended period of time, Respondent practiced at 1 East Lexington Street with Mr. Baroody and other individuals. 2. The Respon dent is marrie d, with three children, and is a 1986 graduate of Catholic University Law School. After working for a New York law firm and passing the New York state bar, the Respondent came to Baltimore to work with the firm of Venable, Baetjer & Howard, where he worked for approximately three years. He the n went o ut on his ow n to practice with several individuals from approximately 1994 to date. The form of o rganization was a pa rtnership w ith each of the individual attor neys follow ing a corpo rate form. H is corporation was known as Thomas O Toole, P.C. 3. The Respondent was the only employee of his professional corporation, and since his professional corporation was a Subchapter S corporation, the income charged to his corporation effectively was his personal income on which he was required to pay state and federal income taxes. For much of the time -5- since 1995 to the present, an accountant has assisted Respondent in filing necessary returns. 4. The Respondent claims that he understood his obligation to file withholding tax returns, alth ough he is not a tax law yer and is not intimately familiar with forms 506 (payroll withholding form) and 508 (year end reconciliation form). He testified that he was familiar with his obligation to pay income taxes, and stated that he wa s actually paying un der his socia l security number an estimated income tax for the years 1998, 1999 and 2000. His state and federal income ta x returns, an d his withholding tax returns were not filed for these three years, 1998-2000. When his state income taxes were filed early in the year of 2002, it was clear that in each of the three years he had paid more in estimated tax than was due on each return. It appears that at the time he w as failing to f ile his withholding tax returns and federal and state income tax returns, he was making substantial estimated tax payments to th e state and f ederal tax authorities. 5. Because he failed to file his withhold ing tax return s, the State Comptroller s Office called him, demanded filings and payment, -6- and ultimately sent him a notice of assessment for the estimated payment of $6,898.03, including $913.03 in interest and a penalty of $1,145.00. After receiving no response in the filing of the forms or payment, the Comptroller filed a lien. Thereafter, the Respondent made full payment of $7,354.98 in December of 2001, and the liens and garnishments were eliminated. Early in 2002, the R esponde nt through his accounta nt, filed his delinquent federal and state tax returns as well as the required quarterly returns (form 506) fo r the years 1998-2000. 6. The Respon dent is an active member of the District of C olumbia Bar and the M aryland Bar. H e is inactive in the New York Bar because he has not paid his dues since leaving New York. He testified that he has had no other complaints or charges regarding his profess ional cond uct, and is ac tive in pro bono activities. 7. The Petitioner agrees that this case is a failure to file case, including failure to file withholding tax forms to the State of Maryland, failure to file state income tax to the State of Maryland, and failure to file income tax to the Federal -7- Government for the years 1998-2000. 8. It is admitted that the Respondent has made payments since the year 2001 and is current on his federal and state tax obligations. It is acknowledged that he cooperated with the representative of the Attorn ey Griev ance C omm ission, that he clearly made mistakes and has acknowledged his failures to file the appropriate documents and his tax returns. He freely ackno wledg es his err or. 9. The Respondent has submitted to this Court several letters from former partners an d professio nal associate s, and from clients which confirm h is high mo ral and prof essional ch aracter and his high prof essio nal a nd perso nal in tegrity. CONCLUSIONS OF LAW After reviewing the evidence, hearing arguments, and reviewing the applicable law, this Court makes the following findings: 1. This Court finds by clear and convincing evidence that the failure to file and pay5 federal an d state incom e tax returns for 5 It appears that the hearing judge included the words and pay although other portions of the findings and conclusions make clear that the hearing judge fou nd only that O Toole failed to file the various returns but did not find a f ailure to pay. See Judge Wax ter s Findings of Fact at Paragraph 7. As Bar Counsel acknowledged in his Exceptions and Recommendation for Sanction, the words and pay should be omitted to make this finding -8- the calender years 1998, 1999 and 2000, until he filed such returns in 2002, constitutes a violation of Rule 8.4(d) of the Maryland Rules of Profe ssional C onduc t. See Attorney Grievance Comm ission vs. Ga vin, 350 Md. 176 (1998); and Attorney Grievance Comm ission vs. Waters, 2001 Md. L EXIS 864. 2. This Court finds by clear and convincing evidence that the failure to file Maryland withholding tax forms for Thomas O Too le P.C. for years 1998, 1999 and 2000, constitutes a violation of Rule 8.4(d) of the Maryland Rules of Professional Condu ct. See Attorney Grievance Commission vs. Thompson, Misc. Docket AG, No. 9, September Term, 2002 (filed August 13, 2003); Attorney Grievance vs. Clark, 363 Md. 169 (2001); and Attorney Grievance vs. Post, 350 Md. 85 (1 998). 3. This Court makes these findings by clear and convincing evidence and finds that the Respondent, an experienced and competent attorney, was aware of the obligation to make such filings and failed to do so de spite warnings from the Comptroller s Office, from at least May of 1999 thro ugh its consiste nt with the hea ring jud ge s oth er findi ngs an d conc lusions . -9- assessment procedure, lien procedure and final garnishment procedure that resulted in the garnishment of his professional accounts in December 2001. While this Court finds no clear and convincing evidence of fraud, the Court has no hesitancy under the facts and the law in finding separate violations of Rule 8.4(d) of the Maryland R ules of Pro fessional C onduct. II. Standard of Review This Court has original and complete jurisdiction over proceedings involving attorney discipline. Attorney Grievance Comm n v. Seiden, 373 Md. 409, 414, 818 A.2d 1108, 1111 (2003). Clear and convincing evidence must suppo rt the hea ring jud ge s fin dings. Attorney Grievance Comm n v. Monfried, 368 Md. 373, 388, 794 A.2d 92, 100 (200 2). Bearing this in mind, we review the re cord independen tly but generally accept the hearing judge s findings of fact unless they are clea rly errone ous. Attorney G rievance C omm n v. Garfield , 369 Md. 85, 97, 797 A.2d 757, 764 (2002). Any conclusions of law made by the hearing judge, such as whether provisions of the M RPC w ere violated, are subject to our de novo review. Attorney G rievance C omm n v. McLa ughlin, 372 Md. 467, 493, 813 A.2d 1145, 1160 ( 2002) . III. Discussion Bar Counsel filed exceptions challenging a number of the hearing judge s findings and conclusions. We shall address each exception in turn. First, Bar Counsel disagrees with the -10- hearing judge s de claration that th is case is merely a failure to file case. In particular, Bar Counsel disputes the hearing judge s statement that there is no specif ic claim that the Respondent failed to pay his taxes, because, according to Bar Counsel, the Petition specifically asserted a failure to file tax returns and pay Maryland withholding taxes. Bar Counsel argues ad ditionally, but alon g the same lines, that the hearing judge s description of the case as a failure to file case cannot be reconciled with the judge s finding of fact that O Too le did not pay Maryland withholding taxes until after the State Comptroller garnished his bank accounts. In Bar Counsel s view, the hearing judge should have concluded that O Too le violated M RPC 8 .4(d) by not on ly failing to file the necessary tax forms but also by failing to pay State withholding taxes when they were assessed.6 We disagree. O Too le formed his professional corporation, Thomas O Toole, P.C., as a so-called Subchapter S corporation or S co rporatio n und er the fe deral tax laws. See 26 U.S.C.A. §§ 1361-137 9 (2003). A Subchapter S corporation allows a company of seventy-five or fewer sharehold ers to enjoy the b enefits of in corporation but avoid th e taxation o f both the corporate entity and its share holder s. Id., § 1361(b)(1)(A) (defining an S corporation and setting forth the elig ibility criteria); see Byrne v. Commissioner, 361 F.2d 939 , 942 (7 th Cir. 1966) (recognizing the purpose of the S corporation, to permit a qualified corporation and 6 Bar Counsel presented no evidence of the status of O Toole s federal withholding tax requirements, and the hearing judge made no finding regarding any federal withholdings. Bar Counsel s exception here involves only O Toole s Maryland withholding returns and related tax payments. -11- its shareholders to avoid the double tax normally paid when a corporation distribute s its earnings and pro fits as div idends ). Thus, with few exceptions, the corporation does not pay tax at the corpo rate level, but its earnings pass through to the shareholders who must report profits or losses on their federa l and state ind ividual incom e tax retu rns. Id., §§ 1363(b) (providing that, with several exception s, [t]he taxab le income of an S co rporation sh all be computed in the same manner as in the case of an individual ), § 1366(a)(1) (providing that the shareholders of an S corporation pay taxes according to the corporation s income or losses). Judge Waxter s findings of fact, w hich wer e not clearly erron eous, dem onstrate that O Too le was the so le emp loyee of T homa s O Toole, P.C . since its f ormatio n in 199 3. As an emplo yer of O Toole , Thom as O T oole, P .C., the corporation , was requ ired to com ply with Maryland Code, § 10-901 et. seq. of the Tax-General Article ( 1957, 1 997 R epl. Vo l., 2002 Supp.), w hich set forth an employer s duties regarding withholding employee taxes. One duty, under Section 10-906 (a),7 required an employer to withhold a specified amount of employee wages p eriodically and then pay that money to the State Comptroller each period. 7 Section 10-906(a) of the Tax-General Article states: Required. Excep t as provide d in § 10-907 of this subtitle, each employer or p ayor shall: (1) withhold the income tax required to be withheld under § 10-908 of this subtitle; and (2) pay to the Comptroller the incom e tax withh eld for a period with the withholding return that covers the period. -12- Section 10-817 of the Tax-G eneral Artic le (1957, 19 97 Rep l. Vol.) 8 required an employer to report all such withholdings and, under Section 10-822,9 the reports must have been completed and filed monthly, quarterly, or annually, depending on the amount of tax reasonab ly expected to be withheld. The parties in this case stipulated that O Toole, on 8 Section 10-817 of the Tax-General Article provides: A person req uired to w ithhold tax und er § 10- 906 of this title sh all file an incom e tax w ithhold ing retu rn. 9 Section 10 -822 of th e Tax-G eneral Artic le states in pertin ent part: (a) Required. (1) Except as provided in paragraphs (2) and (3) of this subsection , each perso n required u nder § 10 -906 of th is title to withho ld income tax shall complete and file with the Comptroller a quarterly income tax withholding return, on or before the last day of the month that follows the calendar quarter in which that income tax was withheld. (2) If the person reasonably expects the total amount of income tax required to be withheld in a quarterly period to be $700 or more, instead of a quarterly income tax withholding return the person sh all complete and file with the Co mptroller a month ly income tax with holdin g return . . . . (3) If the person reasonably expects the total amount of income tax required to be withheld in a calendar year to be less than $250 instead of a quarterly income tax withholding return the person sh all complete and file w ith the Com ptroller an annual income tax withholding return on or before January 31 that follows that calendar year. (b) Contin ued filin g requ ired. A person required to file a quarterly or month ly income tax w ithholding re turn shall continue to file returns, whether or not the person is withholding any income tax, until the person gives the Comptroller written notice that the person no longer has employees or no long er is liable to file the return. (c) Change from monthly to quarterly return. A person who files a written request to chang e to a quarterly return filing because the person withholds less than $700 each quarter may be allowed to change to a quarterly basis at the beginning of the calendar year a fter the requ est. -13- behalf of Thomas O Toole, P.C., was required to make q uarterly reports an d, in addition , file a separate report annually as a year-end reco nciliation. Quarterly reports are made on a Form MW 506 (Employer s Return of Income Tax Withheld), and a Form MW 508 (Annual Employer Withholding Reconciliation Report) is used to report the year-end withholding tax reconc iliation. See COM AR 03.04.01 .01(D)(1), 10 03.04.01.01(E)(2)(a). 11 For a number of quarters prior to the time period at issue in this case, O Toole had withheld amounts from his own salary, filed the withholding returns, and made the corresponding tax paymen ts to the State. During the eight quarters in question in this case, from September of 1998 through June of 2000, O Toole did not file the forms MW 506 quarterly or the MW 508 annually, although he had a continuing obligation to do so. During this same time period, however, O Toole had made substantial estimated state and federal tax payments under his soc ial security number. Because O Toole made his estimated payments to his social security number rather than along with the required withholding return forms, the State Comptroller applied them to him personally instead of to Thomas O Toole, P.C. The money was not credited to the corporation s tax obligations. Therefore, based on O Toole s corporation s previous 10 COMAR 03.04.01.01.D.1 states: Every employer subject to the withholding provisions shall make either a quarterly or monthly return to the Comptroller on Form MW 506. 11 COMAR 03.04.01.01(E)(2)(a) states: (2) On or before February 28 of each year, the employer or payor shall file with the Comptroller the following forms or information: (a) MW 508 E mployer s Ann ual W ithhold ing Re concilia tion Re port. -14- withholding payments from before September 1998, the State Comptroller estimated O Toole s tax liability for the eight quarters at issue, added interest and penalties, and on November 21, 2000, sent him a notice of assessment for $6 ,795.98 . The State Comptroller thereafter filed a lien for the assessment amount and sought garnishment of O Toole s bank accounts. Judge W axter foun d that O T oole mad e a paymen t of $7,354 .98 to the Sta te Comptroller on December 5, 2001. Bar Counse l contends th at the one-year lapse between the assessment of the withholding tax and O T oole s December 5, 2001 payment constituted a failure to pay withholding taxes and a violation of MRPC 8.4(d). The argument misses the mark. O Toole s and his corporation s State tax payment obligations during the eight quarters at issue were satisfied by his previously made estimated tax payments. Judge Waxter found, in fact, that these payments exceeded his corporate and personal state tax liability at any given time during the period in question. As a result of his estimated payments, whenever tax payments to the State came due during the years of 1998 to 2000, the State Comptroller had in its possession enough of O Toole s money to account for those obligations. Hence, Judge Waxter s conclusion that O To ole did not violate MRPC 8.4(d) by failing to pay taxes is sufficiently supported by the record. We shall overrule Bar Counsel s exception.12 12 We find it impo rtant to note th at Bar Co unsel attem pts to draw a distinction between O Toole s payment of personal tax and payment of his corporation s tax. In other words, Bar Counsel apparently does not consider it relevant that O To ole made estimated tax payments to his social security number because it was O Toole s failure to pay the corporate tax, not his personal tax liability, that gave rise to the failure to pay charge. Bar Counsel s view -15- Bar Counsel also excepts to the hearing judge s finding that [i]t is admitted that the Respondent has made payments since the year 2001. The parties interpret this statement by the hearing judge differently. Bar Counsel seemingly reads this statement to mean that O Too le timely met all of his payment and filing obligations in 2001, which Bar Counsel believes is contrary to the e vidence in the record. On the other hand, O Too le considers this statement to mea n simp ly that, after 2001, he h as made ta x payments. T he finding , in O Toole s view, is not clearly erroneous because Bar Counsel admitted in the record that O To ole ma de paym ents in 2 001 an d 2002 . A plain reading of the hearing judge s statement leads us to agree with O Toole that the hearing jud ge merely fo und that O Toole had made tax payments after 2001. Clear and convincing evidence in the record supports this finding. T he testimon y of the State Comptroller s representative at the hearing indicates that O Toole made full payment of the assessed withholding tax amount in December of 2001 and that O Toole made another payment on April 3 0, 2002. A dditionally, the parties stipulated that, [o]n or about December 4, 2001, Respondent paid the Comptroller the sum of $7,354.98 . . . . Bar Coun sel s exc eption is , therefo re, over ruled. is evident because, midway through the evidentiary hearing, Bar Counsel objected to questions about how much overpayment O Toole made on his previous personal tax returns. Bar Counsel stated that there s no allegation in the Petition for disciplinary action regarding payments to the Ma ryland State and Federal inco me tax es, it s just failure to timely file. Because of the nature of O To ole s Subchapter S corporation, however, any tax liability of the corporation , in essence, a lso would be O T oole s perso nal obligation and includ ed in personal return under h is social security number. -16- Bar Counsel s final exception relates to the hearing ju dge s failure to find a violation of MRPC 8.4(b), which provides that it is profes sional misco nduct for a lawyer to com mit a criminal act that reflects adversely on the law yer s honesty, trustworthiness or fitness as a lawyer in other respects. Bar Co unsel urges that O T oole committed this variety of misconduct by wilfully failing to file an income tax withholding return in violation of Maryland Code, Section 13-1007(a) of the Tax-General Article (1988, 1997 Repl. Vol., 2002 Supp .)13 and by wilfu lly failing to file an income tax return in violation of Maryland Code, Section 13-1001 (d) of the Tax-G eneral Article (1988, 199 7 Repl. Vol., 2002 S upp.). 14 To establish a violation of MRPC 8.4(b), Bar Counsel must prove by clear and convincing evidence that O Toole not only committed a criminal act, but also that the criminal act reflects adversely on the lawyer s honesty, trustworthiness or fitness as a lawyer in other respects. See Attorney Grievance Comm n v. Post, 350 Md. 85, 92, 710 A.2d 935, 938 (1998). In the case b efore us, the hearing jud ge s findin gs make it clear that O T oole 13 Section 13-1007(a) of the Tax-General Article states: Willful failure to file income tax withholding return. A person who is required to file an income tax withholding return and who willfully fails to file th e return as req uired und er Title 10 of this article is guilty of a misdemeanor and, on conviction, is subject to a fine not exceeding $10,000 or imprison ment not to exceed 5 years or both. 14 Section 13-1001(d) of the Tax-General Article states: Income tax. A person who is required to file an income tax return and who willfully fails to file the return as required under Title 10 of this article is guilty of a misdemeanor and, on conviction, is subject to a fine not exceeding $10,000 or imprisonment not exceeding 5 years or both. -17- committed at least two types of criminal acts: the willful failure to file Maryland withholding tax forms and the willful failure to file income tax returns. Thus, the question becomes whether either or both of these types of criminal acts fulfills the second element of an MRPC 8.4(b) violation by reflecting adversely on O Toole s honesty, trustworthiness, or fitness to practice law. First, we consider whether O Toole s failure to file withholding tax forms violated MRPC 8.4(b). Our opinions in Attorney Grievance Comm n v. Post, 350 Md. 85, 92, 710 A.2d 935, 938 (1998) and Attorney Grievance Comm n v. Clark, 363 Md. 169, 767 A.2d 865 (2001), which discuss attorneys failures to file and pay withholding tax returns, guide our analysis here. In Post, we held th at an attorney s f ailure to file and pay w ithholding ta x did not constitute a violation of MRPC 8.4(b) under t he circu mstanc es in tha t case. 350 Md. at 99-100, 710 A.2d at 942. Post, the attorney facing disciplinary charges in that case, had maintained a business th at operated with seve ral employees whose in come he had withh eld for tax pur poses. Id. at 91, 710 A.2d at 937-38. Although there was a specific finding that Post did not inten d to defraud the government, it was determined that he willfully neglected his obligation to file and pay withholding tax returns o n behalf o f his business and, instead, applied the money withheld from his employees to pay other business expenses. Id. at 93-94, 710 A.2d at 939. To assess whether this conduct violated MRPC 8.4(b) as the hearing judge had found, w e focused on the seco nd eleme nt of the inq uiry: whether failure to file and pay withhold ing tax return s reflects ad versely on his fitness as a lawyer. Id. at 99, 710 A.2d -18- at 942. Chief Judge Bell, writing for the majority of the Court, stated: We do not believe that, under the circumstances of this case, that the respondent s conduct reflects adversely on his fitness as a lawyer. The only basis for the [hearing judge s] conclusion that it does reflect adversely on his fitness as a lawyer is that failure to practice what one preaches underm ines one s credibility as a provider of legal c ounsel. Bu t that is simply another way of saying that the administration of justice may be prejudiced. The [hearing judge] was specific in rejecting any suggestion that, by [Post s] actions, the re sponden t s honesty and trustworthiness was compromised, the conclusion that one could mos t logically be expected to draw. Moreover, the [hearing judge] also diagnosed the problem as one involving the respondent s office m anagem ent skills rather th an his performance or abilities as an attorney. Id (footnote omitted). This Court further observed that Post had never before been the subject of attorney disciplinary proceedings and that the evidence suggested that he was a man of good character, a truthful person, and a good attorney who has given his clients good advice and has served them well. Id. In Clark, we agree d with the h earing judg e s conclus ion that Clar k had viola ted MRPC 8.4(b). Id. at 179, 767 A.2d at 871. Clark had em ployed a secretary whose income he had withheld for ta x purpose s. On repe ated occas ions from Septemb er of 199 2 until January of 1999, Clark neglected to file the appro priate withh olding tax f orms and frequently did not make the required quarterly payme nts of his se cretary s w ithheld w ages. Id. at 17577, 767 A.2d at 868-69. D uring this ex tended pe riod, Clark d id make o ccasional p ayments to lessen the amount of delinquent tax he owed, but his tax arrearage grew noneth eless. Id. Clark s habitual refusal to co mply with bo th the filing an d payment re quiremen ts while -19- continuing to withho ld his secretary s wages c onstituted a c riminal act ref lecting adv ersely on his honesty, trustworthiness, or fitness to prac tice law in violation of M RPC 8.4(b). Under the circumstance of the case at hand, O Too le s failure to f ile withholding tax forms does not reflect adversely on his honesty, trustworthiness, or fitness to practice law. This case differs from Post and Clark in two very important respects. First, Post and Clark appraise the conduct of attorneys who not only have failed to file withholding tax forms but also have failed to make the required tax paymen ts on time. O Toole, by co ntrast, had pa id enough state tax to cove r withh olding tax resp onsibilitie s. Furthermore, the attorneys in Post and Clark used the income withheld from employees of their businesses to pay business or personal expenses, while O Toole did not; he quite sim ply had n o other emplo yees. In light of these facts, we hold that O Toole s failure to file withh olding tax f orms doe s not constitu te a violatio n of 8.4 (b). Next, we must determ ine whether O Toole s separate criminal act of willfully failing to file income tax returns reflects adversely on his hon esty, trustworthin ess, or fitness to practice law. For the following reasons, we conclude that it does. The Comment to MRPC 8.4 states: Many kinds of illegal conduct reflect adversely on fitness to practice law, such as . . . the offense of willful failure to file an income tax return. (emphasis added). T his Comment was emphasized in Attorney Grievance Comm n v. Atkinson, 357 Md. 646, 745 A.2d 1086 (2000). There, we sustained the hearing judge s conclusion that Atkinson had violated MRP C 8.4(b) b y failing to file income tax returns for ten consecutive years. Id. at -20- 655, 745 A.2d at 1091. Distinguishing Atkinson s conduct from the facts in Post, where the attorney had not steered himself completely clear of the taxing authorities, we stated: Atkinson, on the other han d, purpose fully avoided almost all contact with both the state and federal income taxing authorities and at no point exhibited, over a period of eleven years, any real intention to fulfill her duties of filing the required returns and paying the taxes due, until the authorities discovered her delinqu ency and contac ted her. Id. at 654, 745 A.2d at 10 90. We a lso noted tha t the hearing judge had concluded specifically that Atkinson s conduct was dishonest but that there was no finding of an intent to defrau d. Id. at 655, 745 A.2d at 1 091. Atk inso n, ho wev er, di d w illfu lly, kn owingly, and purposef ully fail[] to file income tax returns from 1986 to 1996, again the w illful failure to file being a crime that adversely reflects on a lawyer s fitness to practice law. Id.(emphasis added). The sam e holds true in the present c ase. Notw ithstanding th e fact that O Toole had made substantial deposits on his income tax liability and that his criminal act arose from a failure to file individual income tax forms only, O Toole, with full knowledge of his legal responsibilities, willfully failed to file his individual income tax returns for three consecutive years. He filed his delinquent returns only after learning that he was the subject of Bar Counsel s investigation. We conc lude that O Toole s willful three-year individual income tax filing lapse re flects adversely on O Toole s fitness to practice law and constitutes a violation of MRP C 8.4(b). Atkinson, 357 Md. at 655, 745 A.2d at 10 91; Attorney Grievance Comm n v. Walman, 280 Md. 453, 463, 374 A.2d 354, 360 (1977) (stating that the attorne y s -21- crime of failing to f ile tax returns reflected upon his fitness to practice law ); see also In re Lawrence, 31 P.3d 1078 (Or. 2001) (holding tha t an attorney had violated Oreg on s equivalent to MRPC 8.4(b) by failing to file income tax returns o ver a three-year period, even though the attorney had caught up on his tax payment obligation). 15 Bar Counsel s exception is sustained. IV. Sanction We turn now to the appro priate sanction for O Toole s violations of MRPC 8.4(b) and 8.4(d) for failing to file Maryland withholding returns and for failing to file federal a nd state income tax returns. The appropriate sanction for a violation of the MRPC depends on the facts and circ umstan ce of e ach ca se, including consideration of any mitigating factors. Attorney Grievance Comm n v. Awuah, 374 M d. 505, 5 26, 823 A.2d 6 51, 663 (2003); Attorney Grievance Comm n v. Clark, 363 Md. 169 , 184, 767 A.2d 8 65, 873 (2001). Nonetheless, the principles guidin g our determ ination of a n approp riate sanction are well established. Attorney G rievance C omm n v. McC lain, 373 Md. 196, 211, 817 A.2d 218, 227 (2003). Primarily, we seek to protect the pu blic, to deter other lawyers from e ngaging in violations of the Maryland Rules of Professional Conduct, and to maintain the integrity of 15 In In re Lawrence, the accuse d failed to f ile his income tax returns for 1992, 1993, and 1994. 3 1 P.3d at 1081 . By the time the Bar of Oregon filed its formal complaint against Lawrence in 1997, mo re than a year h ad passed since he ha d paid all back taxes, penalties, and interest. Id. Although there were no longer payments due, the Supreme Court of Oregon held that Lawrence s failure to file the tax returns at the times required by law constituted a crimina l act that re flects ad versely on a lawyer s fitnes s to prac tice law . Id. at 1083. -22- the legal profession. Awuah, 374 Md. at 526, 823 A.2d at 663 (quoting Attorney Grievance Comm n v. Webster, 348 Md. 662, 678, 705 A.2d 1135, 1143 (1998)). To achieve the goal of protecting th e public, w e impose a sanction tha t is commensurate with the nature and gravity of the viola tions and the intent with w hich they we re comm itted. Id. (quoting Attorney Grievance Comm n v. Awuah, 346 Md. 420 , 435, 697 A.2d 4 46, 454 (1997)). Where we hav e found m isconduc t for an attorn ey s failure to meet his or her tax obligations, the sanctions have ranged widely depending on the circumstances in each case. See, e.g., Attorney Grievance Comm n v. Tayback, __ Md. __, 837 A.2d 158 (2003) (imposing suspension with right to reapply after 60 days for willful failure to timely file and timely pay federal and state income tax returns); Attorney Grievance Comm n v. Thompson, 376 Md. 500, 830 A.2d 474 (2003) (suspending attorney indefinitely with the right to reapply after one year for, inter alia, failing to pay federal and state w ithholding ta xes); Clark, 363 Md. at 183-85, 767 A.2d at 873-74 (suspending with immediate right to reapply for repeated failures to file and p ay withholdin g tax returns ); Attorney Grievance Comm n v. Atkinson, 357 Md. 6 46, 745 A.2d 10 86 (2000 ) (imposing indefinite su spension w ith right to reap ply after one year for willful failures to file and pay state and federal tax returns over at least ten years); Attorney Grievan ce Comm n v. Gavin , 350 Md. 176, 711 A.2d 193 (1998) (issuing a reprimand for failure to correct tax p ayment and filing delinqu encies); Post, 350 Md. at 100-01, 710 A.2d at 942-43 (suspending indefinitely with right to reapply in thirty days for failing to timely file and timely pay state withhold ing taxes); Attorney Grievance C omm n -23- v. Breschi, 340 Md. 590, 667 A.2d 659 (1995) (imposing 180 day suspension for failure to timely file and pay fed eral incom e tax returns f or two years); Walman, 280 Md. at 465-66, 374 A.2d at 36 2 (suspending attorney for three years for failing to file and pay returns). Bar Counsel recommends that we presc ribe a sixty-day susp ension. In su pport of this recommendation, Bar Counsel relies on other attorney discipline cases in which we imposed sanctions of suspension upon attorneys who failed to file timely tax returns and timely pay taxes. See Post, 350 M d. 85, 710 A .2d 935; Breschi, 340 Md. at 590, 667 A.2d at 659. The circumstances in these cases differ somewhat from the situation in the present case, which involves a failure to file tax forms rather than a failure to pay taxes. In Breschi, we imposed a 1 80-day suspension for a violatio n of M RPC 8.4(d). The violation arose from Breschi s failure to file and pay federal income tax returns for which he was prosecuted and convicted in fed eral cou rt. Id. at 594, 667 A.2d at 661. Breschi was extremely remorseful and presented mitigation evidence of hardship in his life, but we concluded that the violation warranted a suspensio n, because a repriman d would minimize the ser ious n ature of the misc onduc t. Id. at 605, 667 A.2d at 666. In Post, the attorney violated MRPC 8.4(d) by not paying or filing the required withholding tax returns when they came due, even though he had withheld wages from his several employees for tax purposes. 350 Md. at 93-94, 710 A.2d at 939. We described Post s conduct as serious but f ound it to be mitigated by the hearing jud ge s explicit finding that Post had no intent to defraud the State and that he maintained a ledger even -24- when not remitting taxes as and when due. Id. at 101, 710 A.2d at 943. We suspended Po st indefin itely with th e right to reapply a fter thirty d ays. Id. Because O Toole did not fall behind on tax payments, the conduct at issue in this case is clearly not as egregious as what we add ressed in Post or Breschi. O Toole paid estimated taxes to cover his state tax ob ligations and merely failed to file the appropriate withholding and income ta x returns on time. Durin g the period in question, O Toole also made substantial estimated p ayments to the federal taxing authorities but did not file the appropriate income tax forms. 16 O Too le s violations w ere not com mitted with an intent to defraud the govern ment. In ad dition, O T oole readily adm its his errors, cooperated with the representative of the Attorney Grievance Commission during its investigation, and is now current on all of his federal and state tax responsibilities. Other members of the Bar and clients alike have attested to O Toole s high moral and profes sional character as well as his hig h prof essiona l and pe rsonal in tegrity. Emphasizing these circumstances, O Toole argues that a reprimand would be a sufficient sanctio n. He invokes our opinion in Gavin, in which we reprimanded an attorney for failing to correct certain tax delinquencies. The respondent in Gavin arranged w ith his wife that she would have the sole responsibility of preparing the couple s tax returns. 350 Md. at 181, 711 A.2d at 196. Gavin discov ered in Decem ber of 1988 that his tax re turns 16 The estimated p ayments to the federal go vernmen t kept O Toole cu rrent on his payment obligations except for the year 2000, when he slightly underestimated his tax liabi lity. -25- from 1985 through 1988 had not been filed, but, notwithstanding this discovery, did not correct his tax deficiencies until years later, eventu ally catchin g up in 1 994. Id. at 186, 711 A.2d at 198. W e agreed w ith the hearing judge that, alth ough G avin did not fall behind on his taxes willfu lly, he willfully failed to rectify the prob lem in a time ly manner. Id. at 193, 711 A.2d at 201. This, we held, constituted conduct prejudicial to the administration of justice and vio lated M RPC 8.4(d). Id. at 193, 711 A.2d at 201-02. In considering the appropriate sanction, w e recogniz ed that mo st our attorney discipline cases in which we imposed suspensio n for tax vio lations involved th e attorney s w illful failure to f ile his returns or avoid his taxes initially. Id. at 19 8, 71 1 A.2d at 204 . Bec ause Gav in, in itially, did not evade his ta x obligation s intentionally bu t only failed to rectify h is proble ms time ly, we de clined to suspen d him a nd issu ed a rep rimand . Id. O Toole s conduct warrants a sanction m ore severe than a reprim and, howeve r. Unlike the attorney in Gavin who did not fall beh ind on his tax es willfully because he believed his wife had com pleted the task , O Too le willfully ignored his filing obligations as they came du e. Moreo ver, O To ole s failure to file his federal and state income tax forms over a three-year period along with the willful neglect of his withholding tax filing obligations re presents serio us miscon duct. As w e stated in Walman: An attorney s willful failure to file income tax returns may seriously impair public confidence in the entire profession. The need, therefore, to maintain public respect for the bar is a vital consideration in the imposition of disciplinary sanctions. The lawyer, after all, is intimately associated with administration of the law and should rightfu lly be expected to set an exa mple in -26- observing the law. By willfully failing to file his tax retur ns, a lawyer appears to the public to be placing himself above the law. 280 Md. at 464-65, 374 A.2d at 361. We also have stated that [o]ne of the most relevant considerations in determining a sanction for failure to file income tax returns is the intention and motive of the respondent. Gavin, 350 Md. at 197-98, 711 A.2d at 204 (quoting Breschi, 340 Md. at 601, 667 A.2d at 665). O T oole knew of his filing obligations to both the federal and state taxing authorities, yet he began complying with them only after the Comptroller s repeated demands and after a lien had been filed against his bank account. As we determined above, O Toole s tax neglect reflects adversely on his fitness to practice law. Describing the seriousness of an attorney s willful disregard of tax filing responsibilities, one court stated: [T]he willful failure to file tax returns in a timely manner warrants a significant suspension from the practice of law. Moreover, repeated failure to do so . . . ordinarily would justify even a longer period of suspension. In re Lawrence, 31 P.3d at 1086. O Toole s intentional noncompliance with a k nown legal du ty, therefo re, deserves a sanction of suspension. Considering all of the circumstances in this case, we conclude that, to protect the public and deter other lawyers from misconduct, the appropriate sanction is suspension for a period of thirty days. O Toole shall stand suspended from the practice of law in this State for a period of thirty days from the date of the filing of this Opinion; he shall stand suspended beyond that time unless a ll costs incurred in connec tion with this p roceeding are paid in f ull. IT IS SO ORDERED; RESPONDENT SHALL PAY ALL COSTS AS TAXED BY T H E CLERK OF THIS COUR T, -27- INCLUDING THE COSTS OF ALL TRANSCRIPTS, PURSUANT TO MARYLAND RULE 16-715(C), FOR WHICH SUM JUDGMENT IS ENTERED IN FAVOR OF THE ATTORNEY GRIEVANCE COMM ISSION AGAINST THOMAS O TOOLE. -28-

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