Tax Crimes Draw Indefinite Suspension

Tax violations have led to an indefinite suspension of an attorney by the Kansas Supreme Court

For years, the respondent engaged in the private practice of law in Kansas City, Kansas. The respondent was the sole proprietor of her law office. The respondent employed others at her law office. For an extended period of time, the respondent withheld federal employment taxes from her employees’ paychecks, but did not pay over the withheld funds to the Internal Revenue Service (hereinafter “the IRS’). In total, the respondent withheld but failed to forward more than $238,000 in federal taxes to the IRS.

In 2002 and 2003, while the respondent filed individual federal income tax returns, the respondent failed to pay her individual federal income taxes.

She paid the taxes after charges were filed and self-reported the conviction .

the federal court sentenced the respondent to a controlling sentence of 36 months in prison, 36 months post-release supervision, and restitution in the amount of $70,118.34, for the interest which previously accumulated on the unpaid employment taxes, for the individual federal income taxes, and for the interest on the individual federal income taxes. On May 7, 2014, the United States Court of Appeals for the Tenth Circuit affirmed the respondent’s convictions and sentence.

The root of the problem

The respondent suffers from depression and an addiction to gambling. It is clear that the respondent’s depression and addiction contributed to her misconduct…

The respondent presented compelling testimony that she has been rehabilitated. The respondent has not practiced law for eight years, as her license has been temporarily suspended or transferred to disability inactive status throughout that time period. Also, the respondent has not gambled for eight years. The respondent acknowledged that if she resumes gambling she will ‘literally die.

Sanction

After careful consideration, a majority of the court holds respondent should be indefinitely suspended effective as of October 5, 2011—the date this court first temporarily suspended respondent’s license to practice law. The majority sets this effective date with the understanding respondent will be eligible to apply for reinstatement under Rule 219 as of the date of this decision, which will require a reinstatement hearing. A minority of the court would disbar respondent.

Oral argument video is linked here. (Mike Frisch)