Opinion ID: 1976978
Heading Depth: 1
Heading Rank: 1

Heading: Alleged Willful Failure to File Income Tax Returns.

Text: Our review in proceedings of this kind is de novo. Committee on Professional Ethics and Conduct v. Martin, 375 N.W.2d 235, 237 (Iowa 1985); Committee on Professional Ethics and Conduct v. Rogers, 313 N.W.2d 535 (Iowa 1981). The findings and recommendations of the Grievance Commission are not binding, but we accord them respectful consideration. Committee on Professional Ethics and Conduct v. Rabe, 284 N.W.2d 234, 235 (Iowa 1979). The latter proposition is of limited applicability in the present case as a result of the absence of any findings of fact by the Commission. The Committee urges that the evidence establishes without question that appellee was knowledgeable concerning the dates that his 1982 income tax returns were required to be filed, that he had no reason to believe he had any extension of time within which to file his Iowa return, and that he knew that the extension of time for filing his federal income tax return had expired. The Committee contends that, under the principles which we applied in Crawford, this knowledge is sufficient, in the absence of insurmountable obstacles, to establish that the failure to file was willful. Appellee responds to these contentions by pointing out that the facts in Crawford involved multiple years and a twenty-nine-month delay in filing, as contrasted with the single year and less than six-month delay in filing in the present case. Apart from the fact that appellee's contention is factually inaccurate with respect to the filing of his 1982 Iowa income tax return, for which no extension of time had been obtained, it is also unpersuasive for other reasons. One may obviously be guilty of a willful failure to file the required return for a single tax year. It therefore may not seriously be argued that proof of willful failure to file for one year requires proof of failure to file for two years. Similarly, while the length of time involved in the filing delay may be significant if the elements of willfulness are not otherwise clearly present, it is not particularly significant where these elements are otherwise apparent. Appellee's arguments in the present case that his conduct was not willful are all premised upon facts indicating that he had no intent to avoid payment of his tax liability. As our decision in Crawford makes clear, however, an intent to avoid payment of the tax need not be shown in order for a nonfiling to be deemed willful for purposes of lawyer discipline proceedings. Appellee also contends that our decision in Crawford resulted from our disbelief of the reasons which were given in that case for the late filing. Inherent in this argument, is the suggestion that we should find his version of the facts in the present case to be fully believable. The clear answer to this argument, however, is that appellee's reasons or justifications appear to be legally insufficient on their face to overcome his knowing failure to perform a legal duty that was within his power to perform. The only colorable excuse offered by appellee is his reliance on a certified public accountant to protect his interests. The record only shows that the accountant advised appellee concerning potential civil penalties for the late filing. The accountant had no knowledge of the effect of the late filing under the standard of professional responsibility applicable to appellee. Nor did appellee have any justifiable expectation that the accountant was knowledgeable in this area. One striking similarity between the facts in Crawford and the facts of the present case is present. We found that the excuses offered in Crawford were somewhat diluted by the fact that he promptly filed the delinquent returns soon after a visit to his office by an auditor of the Client Security and Disciplinary Commission. As we have indicated in the present case, appellee's 1982 federal and state income tax returns were mailed the day following a visit from an auditor of that agency. We find on our de novo review of the record that the Committee has established by a convincing preponderance of the evidence that appellee's failure to file his 1982 federal and Iowa income tax returns within the time required by law was willful and a violation of DR 1-102(A)(5), (6).