UNITED STATES OF AMERICA (2012)

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UNITED STATES OF AMERICA

THE DEPARTMENT OF THE TREASURY

WASHINGTON, D.C.

December 7, 2012

DECISION

KAREN L. HAWKINS, DIRECTOR,

OFFICE OF PROFESSIONAL

RESPONSIBILITY, U.S.

DEPARTMENT OF THE TREASURY,

INTERNAL REVENUE SERVICE

(IRS),

Complainant

(b)(3)/26 USC 6103

Respondent

)

Complaint No. 2012-00002

Motion for Decision by Default Denied as Moot;

Motion for Summary Adjudication Granted In Part;

Order Imposing Sanction of Disbarment

I. Introduction

On May 30, 2012, Complainant Karen L. Hawkins, Director, Office of

Professional Responsibility (“OPR”), U.S. Department of the Treasury, Internal

Revenue Service (“IRS”), initiated this proceeding by filing a Complaint against

Respondent (b)(3)/26 USC 6103 . Now pending before this tribunal 1 are two motions

filed by Complainant requesting: (1) a decision by default and (2) a summary

Under the authority granted by an interagency agreement between the Department

of the Interior’s Office of Hearings and Appeals and the IRS, the undersigned

administrative law judge (“ALJ”) has been assigned to preside over proceedings

related to this Complaint.

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adjudication. Having reviewed the complete administrative record, and for the

reasons set forth in detail herein, the Motion for Decision by Default is denied as

moot and the Motion for Summary Adjudication is granted in part. Furthermore, as

a sanction for the disreputable conduct established herein as a matter of law by clear

and convincing evidence, the Respondent is hereby ordered disbarred from practice

before the IRS.

II. Procedural Background

The Complaint issued pursuant to statutory and regulatory authority set

forth in 31 U.S.C. § 330 and 31 C.F.R. §§ 10.60-10.82. 2 It alleges that Respondent was

engaged in practice before the IRS at all relevant times and is subject to the

disciplinary authority of OPR. In particular, the Complaint charges Respondent

with ten specific counts of misconduct:

Count I

Alleges that Respondent’s disbarment from practice as a

Certified Public Accountant (“CPA”) by the Oregon Board of

Accountancy on or about May 19, 2010, constitutes

incompetence and disreputable conduct pursuant to 31 C.F.R.

§10.51(a)(10) (2008).

Count II

Alleges that Respondent’s conviction in the U.S. District Court

for the District of Oregon on or about April 12, 2010, for the

federal criminal offense of bank fraud involved dishonesty or

breach of trust that constitutes incompetence and disreputable

conduct pursuant to 31 C.F.R. § 10.51(a)(2) (2008).

Count III

Alleges that Respondent’s conviction for bank fraud, based in

part upon the submission of fabricated federal tax returns,

constitutes incompetence and disreputable conduct rendering

The 2011 revisions to the procedural rules governing disciplinary proceedings set

forth at 31 C.F.R. §§ 10.60-10.82, apply to administration of this Complaint which

was filed on May 30, 2012. See also Treasury Department Circular No. 230 (Rev. 82011) (available online at www.irs.gov). As such, citation will be to the 2011 version

of the procedural rules unless otherwise specified. Because past conduct is

governed by the regulatory provisions in effect at the time the conduct occurred,

citations to those non-procedural regulations will include reference to the applicable

version of the code of federal regulations (“C.F.R.”)

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Respondent unfit to practice before the IRS pursuant to 31

C.F.R. § 10.51(a)(3) (2008).

Count IV

Alleges that Respondent’s conviction in the U.S. District Court

for the District of Oregon on or about April 12, 2010, for the

federal criminal offense of money laundering involved

dishonesty or breach of trust that constitutes incompetence or

disreputable conduct pursuant to 31 C.F.R. § 10.51(a)(2) (2008).

Count V

Alleges that Respondent’s voicemail message to an IRS agent on

or about July 19, 2007, attempted to influence the official action

of an IRS employee by the use of threats, false accusations,

duress, or coercion in a manner that constitutes incompetence

and disreputable conduct pursuant to 31 C.F.R. § 10.51(h)

(2005).

Count VI

Alleges that Respondent’s voicemail message to an IRS agent on

or about July 19, 2007, included profane language and the

making of false accusations that constitutes contemptuous

conduct in connection with practice before the IRS pursuant to

31 C.F.R. § 10.51(k) (2005).

Count VII

Alleges that Respondent falsely identified himself as a CPA or a

retired CPA on documents submitted to the IRS in or around

September 2009, during a time when the Oregon Board of

Accountancy had suspended his CPA license and that conduct

constitutes incompetence and disreputable conduct pursuant to

31 C.F.R. § 10.51(a)(4) (2008).

Count VIII

Alleges that Respondent

(b)(3)/26 USC 6103

, which

constitutes incompetence and disreputable conduct pursuant to

USC

31 C.F.R. (b)(3)/26

(2008).

6103

Count IX

Alleges that Respondent

(b)(3)/26 USC 6103

, which

constitutes incompetence and disreputable conduct pursuant to

USC

31 C.F.R. (b)(3)/26

(2008).

6103

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Count X

Alleges that Respondent

(b)(3)/26 USC 6103

which

constitutes incompetence and disreputable conduct pursuant to

USC

31 C.F.R. (b)(3)/26

(2008).

6103

Based upon the alleged violations of 31 C.F.R. § 10.51 (2005 & 2008) described in

these counts, as well as the aggravating factors set forth in the Complaint, the

Complainant requests that Respondent be disbarred from practice before the IRS.

In response to the Complaint, Respondent, appearing pro se, filed a document

on July 18, 2012, entitled “Complaint by Respondent and Response to Allegations”

(“July 18 filing”). According to his cover letter, the enclosed document represented

a “partially completed Retort to the Complaint” and Respondent intended to have a

“completed response” mailed by July 20, 2012. More than a month later, on August

24, 2012, Respondent filed a “completed Rebuttal to the Complaint,” along with

lengthy attachments (“August 24 filing”).

Thereafter, on September 7, 2012, Complainant filed two dispositive motions:

(1) a Motion for Decision by Default, and (2) a Motion for Summary Adjudication.

In accordance with 31 C.F.R. § 10.68, Respondent was provided with an opportunity

to file responses within 30 days following his receipt of these motions. See Amended

Scheduling Order (dated Sept. 10, 2012).

Respondent subsequently wrote two letters to this tribunal, filed on

September 21, 2012 (“September 21 filing”) and October 9, 2012 (“October 9 filing”).

However, neither of his letters responded to any of the arguments or analysis

contained in the respective motions. In his October 9 filing, Respondent wrote that

he could not afford to hire the attorney he had consulted and described his appeal as

being at a “dead-end.” He explained that he was “not educated in your legalese”

and could not meet the “time constraints” set forth, but thanked this tribunal for the

opportunity to do so. See October 9 filing. The deadline for responding to

Complainant’s motions expired the next day, on October 10, 2010. See Amended

Scheduling Order (dated Sept. 10, 2012).

About a month later, Respondent filed a copy of a letter sent to Counsel for

Complainant, dated November 7, 2012, and received on November 13, 2012,

(“November 13 filing”), purporting to dispute allegations in the Complainant’s

exhibits and attaching various newspaper clippings related to Countrywide

mortgages and other political issues. On November 16 and 23, 2012, this tribunal

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received additional newspaper clippings related to vacancies in President Obama’s

administration and deficit reduction efforts along with handwritten commentary by

Respondent.

Throughout this process, Respondent has been provided with ample time and

sufficient opportunity to respond to the motions requesting a decision by default

and a summary adjudication. Respondent has failed to respond directly to those

motions in a timely manner. Given that the deadline for responding has expired, the

motions are now ripe for consideration.

III. Motion for Decision by Default Denied as Moot

Complainant has moved for a decision by default pursuant to 31 C.F.R.

§§10.64(d), 10.68(a)(1). Complainant alleges that Respondent failed to file a timely

answer that specifically admitted or denied the allegations of the Complaint as

required by the applicable procedural regulations. It requests, therefore, that this

tribunal enter a decision by default finding, by clear and convincing evidence, that

Respondent engaged in disreputable conduct within the meaning of 31 C.F.R. §10.51

(2005 & 2008) for which he may be sanctioned. Respondent has not filed any

response specific to the arguments and analysis contained in Complainant’s Motion

for Decision by Default.

In the Complaint, served on June 20, 2012, Respondent was notified of his

responsibility to file an answer within thirty (30) calendar days from the date of

service. The Complaint explained that failure to do so could result in a decision by

default. See Complaint at 1-2. As noted in the regulations, an answer must be filed

within the time frame specified in the Complaint, 31 C.F.R. § 10.64(a), and failure to

file an answer within the time prescribed constitutes an admission of the allegations

in the Complaint and a waiver of hearing. Id. § 10.64(d); see also Dir., Office of Prof’l

(b)(3)/26

Responsibility v. USC 6103 , Complaint No. 2008-19 (Decision on Appeal, May 16, 2010)

(concurring in ALJ’s default decision entered after striking an untimely answer). 3

Not only must an answer be filed within the time frame specified in the

Complaint, it must also comply with the requirements set forth in 31 C.F.R.

§10.64(b). In particular, “the respondent must specifically admit or deny each

Copies of final agency decisions in disciplinary cases are available on the internet

at: http://www.irs.gov/Tax-Professionals/Enrolled-Agents/Final-Agency-Decisionsin-Disciplinary-Cases.

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allegation set forth in the complaint” or “state that the respondent is without

sufficient information to admit or deny a specific allegation.” Id. Every allegation

that is not denied in the answer “is deemed admitted and will be considered

proved.” Id. § 10.64(c). The regulations also require that the answer be signed by

the Respondent or his representative and include “a statement directly above the

signature acknowledging that the statements made in the answer are true and

correct and that knowing and willful false statements may be punishable under 18

U.S.C. 1001.” Id. § 10.61(e).

Given that the Complaint was served on June 20, 2012, the deadline for filing

an answer was July 20, 2012 (30 days after service). Respondent’s July 18 filing was

the only timely response to the Complaint, and that filing did not meet the

requirements to affirmatively admit or deny the allegations in the Complaint nor did

it contain the requisite signed acknowledgement. 31 C.F.R. § 10.64(b), (e). However,

the filing did contain a partial, but incomplete, discussion of some of the issues

raised by the Complaint and offered reasoning that could be construed as

affirmative defenses.

On August 24, 2012, Respondent filed a “completed Rebuttal to the

Complaint” along with numerous enclosures totaling more than 200 pages (many of

which contained handwritten comments and explanations). This filing did not cure

the deficiencies in the July 18 filing because it was not filed within 30 days of service,

it lacked the requisite acknowledgement, and it failed to specifically admit or deny

each allegation in the Complaint.

Following receipt of Complainant’s motion for a decision by default on

September 7, 2012, this tribunal informed Respondent that he had 30 days within

which to respond. See Amended Scheduling Order (dated Sept. 10, 2012).

Respondent failed to file any document responsive to this motion, and therefore, is

deemed not to oppose it. See 31 C.F.R. § 10.68(b).

Even though Respondent has provided no opposition to the Motion for

Decision by Default and his letters fail to meet the regulatory requirements set forth

in 31 C.F.R. § 10.64, Complainant has also filed a Motion for Summary Adjudication

on the same issues. Given that this will allow for a decision on the merits, the

Motion for Decision by Default is hereby denied as moot. Nevertheless, to the

extent that allegations in the Complaint have not been specifically denied (nor

directly opposed by Respondent) they will be deemed admitted and considered

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proved for purposes of the Motion for Summary Adjudication. See 31 C.F.R.

§10.64(c).

IV. Motion for Summary Adjudication Granted In Part

Contemporaneously with its Motion for Decision by Default, Complainant

also filed a Motion for Summary Adjudication in accordance with 31 C.F.R.

§10.68(a)(2). Complainant alleges that Respondent failed to dispute the substance of

the material facts contained in the Complaint and that this tribunal should enter a

summary decision finding, by clear and convincing evidence, that Respondent

engaged in disreputable conduct within the meaning of 31 C.F.R. § 10.51 (2005 &

2008) for which he may be sanctioned. Respondent has not filed any response

specifically addressing the arguments and analysis contained in Complainant’s

Motion for Summary Adjudication.

A. Standards for Summary Adjudication

The procedural rules provide that “[e]ither party may move for summary

adjudication upon all or any part of the legal issues in controversy.” 31 C.F.R.

§10.68(a)(2). If the non-moving party desires to oppose a motion for summary

adjudication, a response must be filed within 30 days or in accordance with the time

frame prescribed by the ALJ. Id. However, the rules also provide that:

Unless otherwise ordered by the [ALJ], the nonmoving party is not

required to file a response to a motion. If the [ALJ] does not order the

nonmoving party to file a response, and the nonmoving party files no

response, the nonmoving party is deemed to oppose the motion.

Id. at § 10.68(b). A summary adjudication may be rendered if “the pleadings,

depositions, admissions, and any other admissible evidence show that there is no

genuine issue of material fact and that a decision may be rendered as a matter of

law.” 31 C.F.R. § 10.76(a)(2).

A motion for summary adjudication is analogous to a motion for summary

judgment under Rule 56 of the Federal Rules of Civil Procedure (“FRCP”); therefore,

federal court rulings provide additional guidance when ruling on motions for

summary adjudication in administrative proceedings. Dir., Office of Prof’l

(b)(3)/26

Responsibility v. USC 6103 , Complaint No. 2010-12 at 4 (Decision and Order on Motion

for Summary Judgment, Jan. 13, 2011) (citing Puerto Rico Aqueduct and Sewer Auth. v.

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Envtl. Prot. Agency (“EPA”), 35 F.3d 600, 607 (1st Cir. 1994), cert. denied, 513 U.S. 1148

(1995)), sanction modified by (Decision on Appeal, Oct. 12, 2011). Federal courts

recognize that the moving party bears the initial burden of demonstrating the

absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323

(1986).

Once the moving party has met its burden, the burden then shifts to the nonmoving party to establish the presence of a genuine issue of material fact or that

legally, the moving party is not entitled to judgment. T.W. Elec. Serv. Inc. v. Pac. Elec.

Contractors Ass’n, 809 F.2d 626, 630 (9th Cir. 1987). In making this showing, the nonmoving party must set forth specific facts showing that there is a genuine issue for

trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). “An

issue is ‘genuine’ only if there is sufficient evidence for a reasonable fact finder to

find for the non-moving party.” Far Out Prods., Inc. v. Oskar, 247 F.3d 986, 992 (9th

Cir. 2001). “A fact is ‘material’ if the fact may affect the outcome of the case.” Id.

When evaluating a motion for summary judgment, all factual inferences must be

viewed in the light most favorable to the party opposing the motion. Matsushita

Elec. Indus. Co., 475 U.S. at 587.

A failure to respond to a summary judgment motion does not mean that the

motion will automatically be granted. Mullen v. St. Paul Fire and Marine Ins., 972

F.2d 446, 452 (1st Cir. 1992); see also Champion v. Artuz, 76 F.3d 483, 486 (2nd Cir. 1996).

Rather, this tribunal must still review the motion and the record to ascertain

whether the moving party has demonstrated the absence of any genuine issues of

material fact and that a decision may be rendered as a matter of law. 31 C.F.R. §

10.76(a)(2); see also Mullen, 972 F.2d at 452.

B. Applicable Treasury Department Statutes and Regulations

Pursuant to 31 U.S.C. § 330, the Secretary of the Treasury may regulate the

practice of representatives appearing before the Department of the Treasury. See 31

U.S.C. § 330(a). In addition,

[a]fter notice and opportunity for a proceeding, the Secretary may

suspend or disbar from practice before the Department, or censure, a

representative who –

(1) is incompetent;

(2) is disreputable;

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(3) violates regulations prescribed under this section; or

(4) with intent to defraud, willfully and knowingly misleads or

threatens the person being represented or a prospective

person to be represented.

Id. § 330(b). The regulatory provisions governing practice before the IRS similarly

provide that:

The Secretary of the Treasury, or delegate, after notice and an

opportunity for a proceeding, may censure, suspend, or disbar any

practitioner from practice before the [IRS], if the practitioner is shown

to be incompetent or disreputable (within the meaning of § 10.51), fails

to comply with any regulations in this part (under the prohibited

conduct standards of § 10.52), or with intent to defraud, willfully and

knowingly misleads or threatens a client or prospective client.

31 C.F.R. § 10.50(a) (2008 & 2011); see also 31 C.F.R. § 10.50(a) (2005). Incompetent

and disreputable conduct for which a practitioner may be sanctioned is described in

31 C.F.R. § 10.51.

Although the current version of the procedural rules, 31 C.F.R. §§ 10.60-10.82,

governs proceedings before this tribunal, an evaluation of past conduct, including

whether a practitioner has engaged in incompetent and disreputable conduct which

may be sanctioned, must be reviewed in accordance with the regulations in effect at

the time the conduct occurred. See 31 C.F.R. § 10.91; 31 C.F.R. § 10.51(b) (2008 &

2011). Respondent’s conduct, as alleged in Counts I-X, occurred prior to the most

recent 2011 regulatory revisions. Therefore, Respondent’s conduct is judged in

accordance with the regulations applicable during the relevant time period.

According to the Complaint, Counts I-IV and Counts VII-X relate to conduct

that allegedly occurred after the Department last amended § 10.51 on September 26,

2007. See 72 Fed. Reg. 54540, 54550-54551 (Sept. 26, 2007). The September 26, 2007,

revisions to § 10.51 remained in effect until the 2011 amendments became effective

on August 2, 2011. See 76 Fed. Reg. 32286, 32308 (June 3, 2011). Thus, all discussions

relating to conduct under Counts I-IV and Counts VII-X will cite the 2007 regulatory

amendments as codified in the 2008 code of federal regulations.

Counts V-VI involve conduct that allegedly occurred in July of 2007, about

two months before the 2007 regulatory amendments. At that time, § 10.51 had been

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last amended in 2002. See 67 Fed. Reg. 48760, 48774-48775 (July 26, 2002). Although

§ 10.51 remained unchanged between July 26, 2002, and September 26, 2007,

surrounding regulatory provisions governing practice before the IRS were modified

again in 2004. 69 Fed. Reg. 75839 (Dec. 20, 2004). Thus, to avoid confusion, all

discussions relating to conduct under Counts V-VI will contain citations to the pre2007 version of § 10.51 codified in the 2005 code of federal regulations.

C. Standard of Proof

When issuing a disciplinary decision, the standard of proof required depends

upon the nature of the sanction.

If the sanction is censure or a suspension of less than six months’

duration, the [ALJ], in rendering findings and conclusions, will

consider an allegation of fact to be proven if it is established by the

party who is alleging that fact by a preponderance of the evidence in

the record. If the sanction is a monetary penalty, disbarment or a

suspension of six months or longer duration, an allegation of fact that

is necessary for a finding against the petitioner must be proven by

clear and convincing evidence in the record. . . .

31 C.F.R. § 10.76(b). The clear and convincing standard is an intermediate standard

generally requiring proof that a factual contention is “highly probable.” See Career

Training Concepts v. United States, 83 Fed. Cl. 215, 218 (2008); Colorado v. New Mexico,

467 U.S. 310, 316-17 (1984); United States v. Owens, 854 F.2d 432, 436 n.8 (11th Cir.

1988); see also Addington v. Texas, 441 U.S. 418 (1979) (explaining that the clear and

convincing evidence standard lies somewhere between proof by a preponderance of

the evidence and proof beyond a reasonable doubt).

D. Analysis

According to the Complaint and supporting documentation, Respondent was

engaged in practice before the IRS at all relevant times and is subject to the

disciplinary authority of OPR. Complaint at 2. Based upon a review of the

documents submitted by Respondent, there is nothing to indicate that Respondent

specifically denies or otherwise disputes that he was engaged in practice before the

IRS during the relevant time periods encompassed by the Complaint. See 31 C.F.R.

§10.2(d) (2005), 31 C.F.R. §§ 10.2(a)(4) (2008 & 2011). Nor does Respondent deny that

he is subject to the disciplinary authority of OPR under 31 U.S.C. § 330. Therefore,

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under 31 C.F.R. § 10.64, these allegations are deemed admitted and considered

proved without the need for further evidence.

Having established jurisdiction, this analysis next turns to the ten separate

counts of misconduct set forth in the Complaint. For the reasons discussed in detail

below, Complainant has demonstrated, based upon the undisputed evidence of

record, that Respondent engaged in disreputable conduct within the meaning of 31

C.F.R. § 10.51 (2005 & 2008) by clear and convincing evidence as alleged in Counts I,

II, VII, VIII, IX, and X of the Complaint. As there are no genuine issues of material

fact related to these six counts, Complainant’s Motion for Summary Adjudication is

granted, in part, as to Counts I, II, VII, VIII, IX, and X.

(1) Count I – Disbarment from Practice by Oregon Board of

Accountancy

According to the undisputed facts set forth in the record, the Oregon Board of

Accountancy granted Respondent a CPA license beginning in 1994. Complaint Exs.

5-6. On May 18, 2009, the Oregon Board of Accountancy voted to suspend

Respondent’s CPA license for a term of three years based upon: (1) use of his CPA

designation while on inactive status; (2) lack of fitness; and (3) professional

misconduct. Complaint Ex. 8 at 6. After learning of Respondent’s guilty plea in the

U.S. District Court for bank fraud and money laundering, the Oregon Board of

Accountancy issued a notice of intent to revoke Respondent’s CPA license, followed

by a revocation on or about May 19, 2010. Complaint Exs. 12-14.

As set forth in the applicable regulation, incompetence and disreputable

conduct for which a practitioner may be sanctioned includes:

(10) Disbarment or suspension from practice as an attorney, certified

public accountant, public accountant or actuary by any duly

constituted authority of any State, territory, or possession of the United

States, including a Commonwealth, or the District of Columbia, any

Federal court of record or any Federal agency, body or board.

31 C.F.R. § 10.51(a)(10) (2008). A license revocation by the state licensing authority is

the functional equivalent of disbarment.

Respondent’s initial July 18 filing makes no mention of the suspension or

revocation of his CPA license in Oregon. Respondent’s August 24 filing, received

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after the time for filing an answer had expired, does appear to challenge some of the

conduct leading to his initial suspension by the Oregon Board of Accountancy. See

August 24 filing at 7, 11-14. However, none of his arguments dispute or otherwise

contradict the evidence showing that his CPA license was suspended and ultimately

revoked in Oregon by the Oregon Board of Accountancy.

Thus, Complainant has established the fact of Respondent’s disbarment from

practice as a CPA in Oregon by clear and convincing evidence based upon the

undisputed record. Disbarment by a state authority constitutes incompetent and

disreputable conduct under 31 C.F.R. § 10.51(a)(10) (2008). On this basis,

Respondent is subject to disciplinary sanction under Count I. See, e.g., Dir., Office of

(b)(3)/26

Prof’l Responsibility v. USC 6103 , Complaint No. 2011-01 at 7 (Order Granting

Complainant’s Motion for Summary Judgment, June 7, 2011) (finding that a

suspension of a CPA certificate by the state board constituted disreputable conduct

warranting discipline).

(2) Counts II, III, and IV – Federal Convictions for Bank Fraud and

Money Laundering

Based upon the undisputed facts set forth in the record, a federal grand jury

indicted Respondent on March 25, 2009, in the U.S. District Court for the District of

Oregon on 12 criminal counts, including bank fraud, making false statements on a

loan application, and money laundering. Complaint Ex. 17. On January 16, 2010,

Respondent entered a plea of guilty on Counts Two and Nine of the Indictment,

involving the crimes of bank fraud under 18 U.S.C. § 1344 and money laundering

under 18 U.S.C. § 1957. Complaint Exs. 18, 21. According to the minutes from the

plea hearing: the plea petition and plea agreement were signed and submitted, the

Respondent was sworn and examined, he was found competent to enter a guilty

plea, and the court accepted the plea as knowing and voluntary. Complaint Ex. 18

at 5. Judgment and sentencing occurred on April 6, 2010, at which time Respondent

was sentenced to imprisonment for a term of twelve months and one day for each

count (to be served concurrently) and ordered to pay restitution. Complaint Exs. 18,

22. Respondent does not deny that he pled guilty, that the District Court convicted

him of bank fraud and money laundering, and that a Federal judge imposed a

sentence involving incarceration and restitution.

In his July 18 and August 24 filings, Respondent attempts to re-argue the

circumstances of his conviction. According to the Indictment, Respondent

fraudulently misrepresented his income to obtain a bank loan by fabricating and

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submitting a false income tax return to the bank that reflected inflated income

figures. Complaint Ex. 17 at 3 (Indictment related to Counts 2-6). Respondent

disagrees, explaining that he filed the paperwork with Countrywide Financial using

the Stated Income Method, today called a Liar’s Loan, from which

each lender charged a minimum of fees, commission, and one years

interest in advance. All of their loan officers highly recommended that

I use the national gross earnings average for a CPA as posted on the

Web-site “Salaries.com” I was an active Certified Public Accountant,

not a professional mortgage broker. I don’t tell them how to prepare a

mortgage loan application; and, they don’t tell me how to prepare a

financial statement or a tax return. I then, at their recommendation,

prepared a Pro Forma tax return reflecting the same national average

income. This Pro Forma 2005 Personal Income Tax Return was used

by the Prosecutor to indict me on a one charge of Fraud and a one

charge of Money Laundering. . . .

July 18 filing at 2 (emphasis in original). Respondent further maintains that the bank

committed “contributory negligence” because it did not obtain his return directly

from the IRS. Id. at 3. According to Respondent, he only pled guilty to avoid the

potential for a less-favorable jury verdict. Id. at 2.

However, this is not the forum to re-litigate the earlier conviction. According

to the applicable regulations, incompetence and disreputable conduct for which a

practitioner may be sanctioned includes:

(2) Conviction of any criminal offense involving dishonesty or breach

of trust.

(3) Conviction of any felony under Federal or State law for which the

conduct involved renders the practitioner unfit to practice before the

Internal Revenue Service.

31 C.F.R. § 10.51(a)(2), (3) (2008). To establish disreputable conduct under

subparagraph (2), Complainant need only prove the fact of the conviction and that

the crime involves dishonesty or breach of trust. It does not require any

examination of the underlying conduct to ascertain fitness to practice as would be

required under subparagraph (3).

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Complainant has proven, based upon the undisputed evidence, that

Respondent entered a voluntary guilty plea and was convicted of bank fraud and

money laundering. Thus, the only outstanding question is whether the criminal

offenses underlying those convictions involved dishonesty or breach of trust.

According to the statutory language, the Federal crime of bank fraud, for

which Respondent pled guilty, requires a finding of fraud. And fraud, by definition,

involves dishonesty.

The U.S. Code defines the crime of bank fraud and the applicable penalties as

follows:

Whoever knowingly executes, or attempts to execute, a scheme or

artifice –

(1) to defraud a financial institution; or

(2) to obtain any of the moneys, funds, credits, assets, securities,

or other property owned by, or under the custody or control

of, a financial institution, by means of false or fraudulent

pretenses, representations, or promises;

shall be fined not more than $1,000,000 or imprisoned not more than 30

years, or both.

18 U.S.C. § 1344. The First Circuit, interpreting the requisite statutory intent, held

that: “the intent element of bank fraud under either subsection is an intent to

deceive the bank in order to obtain from it money or other property. ‘Intent to harm’

is not required.” U.S. v. Kenrick, 221 F.3d 19, 29 (1st Cir. 2000), cert denied, 531 U.S.

961 (2000), and cert. denied, 531 U.S. 1042 (2000) (emphasis added).

Moreover, “defraud” means “to cause injury or loss to (a person) by deceit.”

Black’s Law Dictionary (9th ed. 2009). The term “fraud” includes:

1. A knowing misrepresentation of the truth or concealment of a

material fact to induce another to act to his or her detriment . . . 2. A

misrepresentation made recklessly without belief in its truth to induce

another person to act. . . . 3. A tort arising from a knowing

misrepresentation, concealment of a material fact, or reckless

misrepresentation to induce another to act to his or her detriment. . . .

IRS-2012-00002

Black’s Law Dictionary (9th ed. 2009). An earlier edition of Black’s Law even noted

that “dishonesty” is a synonym for “fraud,” explaining that: “Bad faith” and “fraud”

are synonymous, and also synonyms of dishonesty, infidelity, faithlessness, perfidy,

unfairness, etc.” Black’s Law Dictionary 594 (5th ed. 1979).

Thus, according to the undisputed facts, Respondent was convicted of bank

fraud which is a criminal offense that inherently involves dishonesty. This showing,

by clear and convincing evidence, establishes disreputable conduct under 31 C.F.R.

§10.51(a)(2) (2008) as alleged in Count II for which Respondent may be sanctioned.

Complainant’s additional arguments under Counts III and IV, alleging that the bank

fraud and related money laundering convictions also constitute disreputable

conduct under 31 C.F.R. § 10.51(a)(2), (3) (2008), are rendered moot by this

determination as well as the other findings of misconduct made as part of this

decision which support the sanction imposed. Consequently, Complainant’s

additional allegations under Counts III and IV need not be considered further.

(3) Counts V and VI – Dealings With Treasury Personnel

Counts V and VI of the Complaint relate to Respondent’s dealings with

Treasury Personnel and, in particular, a voicemail message left by Respondent on or

about July 19, 2007, at the telephone number for Special Agent (“SA”) Clint Kindred.

Complaint at 4, 16-18; see also id. Ex. 4. As transcribed, the message stated:

USC

Yeah Clint, this is (b)(3)/26

, Certified Public Accountant,

6103

representing [Criminal Investigation Subject] [sic]. Um, I’m calling on

his behalf to find out why you are knocking on his door and harassing

him, when anything can be done by, by correspondence through the

mail, and if you do it again, I’ll have the police come out there and

arrest your ass as quickly as I possibly can. You can call me at [phone

number] [sic] and I want to know who your managing supervisor is

too, so don’t call me unless you have that information available and a

detailed explanation of why you were there. Okay? Bye bye.

Complaint Ex. 4.

The Complaint alleges that this voicemail message violates 31 C.F.R.

§§10.51(h), 10.51(k) (2005) which defines incompetence and disreputable conduct to

include:

IRS-2012-00002

(h) Directly or indirectly attempting to influence, or offering or

agreeing to attempt to influence, the official action of any officer or

employee of the Internal Revenue Service by the use of threats, false

accusations, duress or coercion . . .

....

(k) Contemptuous conduct in connection with practice before the

Internal Revenue Service, including the use of abusive language,

making false accusations and statements, knowing them to be false, or

circulating or publishing malicious or libelous matter.

In particular, the Complaint alleges that Respondent’s message was an improper

attempt to dictate the manner of the investigation by the use of threats, false

accusations, duress, or coercion and that the message’s profane language and false

accusations of harassment constituted contemptuous conduct in connection with his

practice before the IRS. See Complaint at 16-18.

In his letters responding to the Complaint, Respondent makes a number of

statements about Mr. Kindred, presumably by way of defense, including the

following:

. . . The word UNPROFESSIONAL can ONLY fit the majority of the

IRS personnel within the Audit and Collection Departments.

Example of Unprofessional: Clint Kindred, and employee of your

Criminal Investigation Department, the cesspool of the IRS.

5) Incompetence: Lack of sufficient ability, incapability, ineffectuality.

This looks like Unprofessionalism. Like the IRS audit department.

The antonym is efficient, strength and talent. This describes me

exactly. So far, I have described your having used your letter to paint

my Character Assassination through unfounded, spurious

assumptions and allegations.

8. Clint Kindred, Criminal Investigation Department, an immature,

new agent, who at the time, October 27, 2007, was put in charge of

investigating my involvement with a client due to his 3 corporations

and voluminous number of auto/truck loans. Kindred had only 16

months of training and limited experience in the field with

questionable Department comprehension, objectives or discipline. This

description fits the definition of “UNPROFESSIONAL” (see above

paragraph under Incompetence.)

IRS-2012-00002

July 18 filing at 6 (emphasis in original).

In a subsequent letter, filed after the deadline for answering, Respondent

wrote:

10. The next few paragraphs are loaded with key words, i.e.

“attempted to dictate; threaten the agent; contemptuous conduct;

could be interpreted as a threat against the agent’s physical safety, job

security and reputation; use of profane language; false accusation; false

represented; etc. This usage of these terms is dramatic and designed to

represent a character that does not exist. These representations are

interpretations made by a person who lacks maturity, is overly

sensitive to criticism, and obviously has a very low self esteem. These

terms also fit the Attorney computerized Template.

....

2. Section #4 is a compilation of recorded telephone calls between me

and C. Kindred a young, immature, Criminal Investigation

Department employee. First, the Criminal Investigation Department,

by its’ own admission, is not a tax or tax audit group, and has little

knowledge of tax law or its regulations; Second, the Department

assumed, after two years of document research, that I had understated

my gross annual, business income by over $500,000. After I introduced

them to witnesses and some more objective information, in the third

year of their investigation, they issued a letter, to me, stating that the

IRS has accepted my tax returns as originally filed. It was obvious to

all concerned that Clint Kindred had made numerous fundamental errors in

judgment, unproven assumptions, and numerous allegations that were

fundamentally inaccurate.

August 24 filing at 7-8 (emphasis in original).

Finally, in a letter filed more than 30 days after the time for responding to

Complainant’s motions, Respondent wrote:

Another argument resurrected by you, the Clint Kindred events, of the

criminal investigation. C. Kindred, who has no personality, who had

IRS-2012-00002

graduated from college with a B.S., and had only 8 months training as

an IRS investigator just prior to being assigned to my case. He

admitted to me, up front, that he knew little or next to nothing both

about auditing (one course in college) and the IRS Code. But, he

passed the course of rummaging through trash cans, miscellaneous

garbage containers and mailboxes. He also specialized in

misinterpreting any and all documents that relate to any semblance of

a tax return. Example: after reviewing 3 years of my tax returns,

Kindred estimated that I had that I had (sic.) understated my gross

income, each year, by about $500,000 (years 2004-2006). Two years

later, I received a letter from the IRS stating that my year 2005 tax

return was accepted as filed. I had, after all that time, proved that the

assumptions made by the Criminal Investigation Department were

completely INCORRECT. This type of review happens quite often,

and, once again proves that the IRS makes demands upon the T/P for

documentation within 15 days from the date of their announcement

that they are going to perform an audit, but cares less about the length

of time they consume to fulfill their responsibilities under the

“Taxpayer Bill of Rights.”

November 13 filing at 2-3 (emphasis in original).

Nowhere among those various submissions does Respondent deny leaving

the voicemail message nor does he dispute the content of his message. As

Complainant correctly points out as part of the Motion for Summary Adjudication,

Respondent has not specifically denied the allegations set forth in Count V.

However, whether Respondent was attempting to influence SA Kindred

through the use of threats under 31 C.F.R. § 10.51(h) (2005) requires further

information not available in the record. Respondent’s letters can be construed as

raising genuine issues about SA Kindred’s interactions with Respondent such that it

is not possible to rule as a matter of law how this voicemail should be interpreted

absent additional context about the surrounding circumstances.

In regards to the allegations of contemptuous conduct in connection with

practice before the IRS, 31 C.F.R. § 10.51(k) (2005), the excerpts from Respondent’s

letters exhibit a level of disrespect for IRS agents, and SA Kindred in particular,

which raise doubts about Respondent’s professionalism. Nevertheless, the charge in

the Complaint relates solely to the July 2007 voicemail message. According to the

IRS-2012-00002

Complaint, Count VI rests on Respondent’s use of profane language and a false

accusation that SA Kindred was “harassing” his client. Absent information about

SA Kindred’s interactions with that client, which have not been fully developed as

part of the record, it is not possible to reach a decision as a matter of law that

Respondent demonstrated contemptuous conduct by making a false accusation.

Thus, genuine issues of material fact preclude entry of a summary

adjudication with respect to Counts V and VI.

(4) Count VII – False Identification as a CPA

As previously discussed with respect to Count I, the Oregon Board of

Accountancy voted to suspend Respondent’s CPA license for a term of three years

on May 18, 2009. Complaint Ex. 8 at 5-6; see also id. Ex. 9. 4 Although Respondent has

offered arguments appearing to challenge the basis for that suspension, he does not

dispute that he was in fact suspended.

The Complaint alleges that after this suspension, on September 17, 2009, and

then again on September 24, 2009, Respondent submitted forms to the IRS, including

(b)(3)/26 USC 6103 . Complaint Ex. 15-16. He signed the (b)(3)/26 which listed

USC 6103

(b)(3)/26 USC

Respondent under the preparer block as “

, CPA” and listed his firm name

6103

(b)(3)/26 USC

as “

, CPA Retired.” Complaint Ex. 16. The Complaint further alleges that

6103

at the time he submitted these forms, Respondent knew, or should reasonably have

known, that the Oregon Board of Accountancy had suspended his license.

Complaint at 19. In doing so, the Complaint alleges that Respondent falsely

represented to the IRS that he was a CPA in good standing. Id.

According to the applicable regulations, incompetence and disreputable

conduct for which a practitioner may be sanctioned includes:

(4) Giving false or misleading information, or participating in any way

in the giving of false or misleading information to the Department of

the Treasury or any officer or employee thereof, or to any tribunal

authorized to pass upon Federal tax matters, in connection with any

matter pending or likely to be pending before them, knowing the

information to be false or misleading. Facts or other matters contained

Although Respondent also held a CPA license in California at one time, the

undisputed evidence of record shows that it expired in 1994. Complaint Ex. 10.

IRS-2012-00002

in testimony, Federal tax returns, financial statements, applications for

enrollment, affidavits, declarations, and any other document or

statement, written or oral, are included in the term “information.”

31 C.F.R. § 10.51(a)(4) (2008).

Respondent’s initial response to the Complaint made no mention of the

license suspension. See generally July 18 filing. Later, Respondent offered a confused

explanation for his actions:

As to my alleged license suspension (page 19, paragraph 59 and 60), I

had attempted to renew it for the 10th year, and I had no expectations

of a decline. I had asked for a restricted license due to my lack of any

reoccurring Audit Clients, my objective being to focus on my tax and

consulting practice. Thirty days later, May 18, 2009, I received a letter

of suspension for the Oregon Board of Accountancy. Forty-five days

thereafter, I received my renewed license. During the interim, a

representative of the Board, complained that I still had the designation,

CPA, listed on both the office building directory and on the door to

my office. I am now, and will always be, a Retired CPA. (age 73). As to

the remark about “falsely representing my client,” they were my

clients for many years and I was given the Power of Attorney by them

a few years prior to this incident. Knowing full well that any

suspension would be only momentary and not having expected a

delay in the reversal, I continued to represent the client as he

requested.

August 24 filing at 7. This response is problematic in that it appears Respondent has

confused the period of time when his license was inactive but reinstated (between

August 26, 2008, and December 16, 2008) with his later three-year suspension

(beginning on or about May 18, 2009). Compare Complaint Exs. 6 & 7 with Exs. 8 & 9.

Even though Respondent’s response reflects some confusion about the exact time

period at issue, his response acknowledges using his CPA credentials during a time

when he knew his license had been suspended.

According to the Oregon Board of Accountancy meeting minutes,

Respondent attended the meeting when the Board voted to suspend his license for

three years on May 18, 2009. Complaint Ex. 8 at 6. As such, Respondent had

knowledge of his suspension and he offered no evidence or argument to suggest

IRS-2012-00002

otherwise. Even so, Respondent continued to cite his CPA credentials (albeit with

the qualification that he was “retired”) on official forms submitted to the IRS. In

fact, Respondent has continued to use the “Retired CPA” designation on documents

submitted to this tribunal even after his CPA license was revoked. See July 18 filing

at 1; see also August 24 filing at 1.

Thus, the undisputed facts establish that Respondent gave false or misleading

information to the IRS regarding his CPA status during a time when he knew his

license had been suspended. This showing establishes disreputable conduct under

31 C.F.R. § 10.51(a)(4) (2008) by clear and convincing evidence as alleged in Count

VII for which Respondent may be sanctioned.

(5) Counts VIII, IX, and X –

The Complaint alleges that Respondent

(b)(3)/26 USC 6103

. See Complaint at 3, 20-21. In support of these

(b)(3)/26 USC 6103

allegations, Complainant provided

(b)(3)/26

USC 6103

(b)(3)/26 USC 6103

(b)(3)/26

USC 6103

(b)(3)/26 USC 6103

SAME

(b)(3)/26 USC 6103

SAME

(b)(3)/26 USC 6103

Complaint Exs. 1-3. Respondent does not dispute or otherwise deny that (b)(3)/

26 USC 6103

(b)(3)/26 USC 6103

as set forth in

. Instead, he argues:

There is no law in this nation that states that all taxpayers

(b)(3)/26 USC 6103

As a CPA, I made every attempt to file all clients’ returns

(b)(3)/26 USC 6103

, while

(b)(3)/26 USC 6103

have been

(b)(3)/26 USC 6103

most cases I

July 18 filing at 3.

. I may

, but in

IRS-2012-00002

Under the applicable regulation, incompetence and disreputable conduct

includes:

(6) Willfully failing to make a Federal tax return in violation of the

Federal tax laws . . . .

(b)(3)/26 USC 6103

31 C.F.R. § 10.51(a)(6) (2008).

(b)(3)/26

. See Dir. Office of Prof’l Responsibility v. USC

, Compliant No. 2010-08 (Order

6103

Granting Decision by Default, June 15, 2010), sanction modified by (Decision on

(b)(3)/26 USC 6103

Appeal, June 2, 2011).

. See Complaint Exs. 1(b)(3)/26

USC

6103

3. Respondent’s assertion that

(b)(3)/26 USC 6103

Having demonstrated that Respondent

, Complainant must also show that Respondent’s actions were

“willful” in order to warrant discipline. Case law has defined “willful” to mean “a

voluntary, intentional violation of a known duty.” Dir., Office of Prof’l Responsibility

USC

, Complaint No. 2007-10 at 5 (Decision on Appeal, June 2008); see also

v. (b)(3)/26

6103

Cheek v. U.S., 498 U.S. 192, 201 (1990). As a CPA engaged in practice before the IRS,

(b)(3)/26 USC 6103

Respondent

. As noted by

the appellate decision-maker in (b)(3)/26 USC 6103 :

Given that the

(b)(3)/26 USC 6103

since I began practicing tax law (in 1971) have

clearly set forth

(b)(3)/26 USC 6103

(b)(3)/26 USC

6103

at 6 (Decision on Appeal, June 2008). Respondent’s

(b)(3)/26 USC 6103

None of the arguments propounded by Respondent raise genuine issues of

material fact that would excuse (b)(3)/26 USC 6103 . Specifically, Respondent’s claim

(b)(3)/26 USC 6103

that he attempted to file client returns

while

IRS-2012-00002

(b)(3)/26 USC 6103 , only further demonstrates

(b)(3)/26 USC 6103

Respondent’s additional

comments in his November 13 filing also fail to provide any legal justification for

(b)(3)/26 USC 5

(b)(3)/26 USC 6103

. In that letter he noted that

6103

and argued that over 22 million taxpayers

(b)(3)/26 USC 6103

. Whether or not other taxpayers (b)(3)/26 USC 6103

(b)(3)/26 USC 6103

does not excuse or justify

. In addition, Respondent never submitted any documentation or other

(b)(3)/26 USC 6103

evidence showing that

nor

(b)(3)/26

USC

6103

does the record reflect that

. These types of

unsupported assertions are insufficient to overcome a properly supported motion

for summary adjudication. See Podobnik v. U.S. Postal Serv., 409 F.3d 584, 594 (3d Cir.

2005) (noting that a party cannot rely on bare assertions or conclusory allegations to

show the existence of a genuine issue).

(b)(3)/26 USC 6103

Accordingly, Respondent’s

has been established by clear and convincing evidence based upon

the undisputed factual record. These actions demonstrate disreputable conduct

(b)(3)/26 USC 6103

under

(2008) as alleged in Counts VII, IX, and X for which

Respondent may be sanctioned.

E. Conclusion

In sum, Complainant has demonstrated, based upon the undisputed evidence of

record, that Respondent engaged in disreputable conduct within the meaning of 31

C.F.R. § 10.51 (2008) by clear and convincing evidence as alleged in Counts I, II, VII,

VIII, IX, and X of the Complaint. As there are no genuine issues of material fact

related to these six counts, Complainant’s Motion for Summary Adjudication is

granted, in part, as to Counts I, II, VII, VIII, IX, and X.

V. Sanction

The issue in an IRS disciplinary proceeding is essentially whether the

practitioner in question is fit to practice. See Harary v. Blumenthal, 555 F.2d 1113,

1116 (2d Cir. 1977). “Practice before the IRS is a privilege, and one cannot partake of

Notably, this letter, received more than a month after the deadline for responding

to Complainant’s motions, is itself untimely and indicative of Respondent’s lack of

concern for deadlines.

IRS-2012-00002

that privilege without also taking on the responsibilities of complying with the

(b)(3)/26

regulations that govern such practice.” Dir., Office of Prof’l Responsibility v. USC 6103 ,

Complaint No. 2011-01 at 7 (Order Granting Complainant’s Motion for Summary

Judgment, June 7, 2011). Discipline, including disbarment and suspension, is

“imposed in furtherance of the IRS’ regulatory duty to protect the public interest

and the Department by conducting business with the responsible persons only.” Id.

When determining the sanction to be imposed, “all relevant facts and

circumstances” shall be taken into account. 31 C.F.R. § 10.50(d) (2008), 31 C.F.R.

§10.50(e) (2011). Although the regulations do not provide any more specific

standards for determining when to impose one particular sanction (censure,

suspension, or disbarment) as opposed to another, prior adjudications in other

disciplinary proceedings offer useful guidance. In addition, this tribunal may

consider any mitigating factors proven by the Respondent or aggravating factors

proven by Complainant.

A. Adjudications in Other Disciplinary Proceedings

When considering an appropriate sanction, the discipline imposed by the

state licensing authority warrants consideration. For instance, in Dir., Office of Prof’l

(b)(3)/26

Responsibility v. USC 6103 , Complaint No. 2011-01 at 7-8 (Order Granting Complainant’s

Motion for Summary Judgment, June 7, 2011), the ALJ suspended a CPA from

practice before the IRS until his license was restored, or he became otherwise

qualified to practice, as a sanction for the suspension of his certificate by the North

(b)(3)/26

Carolina Board of CPA Examiners. In USC 6103 , as in this case, the CPA failed to

respond to the motion for summary adjudication with any facts that would mitigate

his sanction and the ALJ found that he could not rest merely on allegations or

denials to establish a genuine issue of material fact. Although the ALJ determined

that the regulations governing practice before the IRS did not dictate actions in the

disciplinary process, see 31 C.F.R. §§ 10.2(a)(2), 10.3(b) (2008), 31 C.F.R. §§ 10.2(a)(2),

10.3(b) (2011), the ALJ noted that the length of a state suspension would guide any

(b)(3)/26

attempt to re-apply to practice before the IRS. See USC 6103 at 7 n.3 (Order Granting

Complainant’s Motion for Summary Judgment, June 7, 2011).

Under the circumstances presented here, the Oregon Board of Accountancy

revoked Respondent’s CPA license after previously issuing a three-year suspension

based upon a pattern of professional misconduct. Complaint Exs. 8, 9, 12, 13, 14.

Revocation is a more severe state agency penalty than suspension and reflects upon

the seriousness of Respondent’s actions. Consequently, the revocation of

IRS-2012-00002

Respondent’s CPA license by the Oregon Board of Accountancy supports imposition

of the sanction of disbarment from practice before the IRS.

When considering Respondent’s criminal conviction, both the seriousness of

the offense as well as the fraudulent nature of his crime warrant a more severe

sanction. See, e.g., Dir., Office of Prof’l Responsibility v. Everett, Complaint No. 2009-27

at 4-8 (Order on Complainant’s Renewed Motion for Summary Adjudication

Regarding Sanctions, July 22, 2010). In Everett, the ALJ imposed the sanction of

disbarment on an attorney who had been convicted of the felony crimes of making a

false declaration, bankruptcy fraud, and money laundering and concealment for

which he was disbarred from the practice of law in Arizona. Id. at 7-8.

Respondent’s criminal conviction for bank fraud is similarly serious and likewise

involved dishonesty. Thus, Respondent’s conviction, coupled with his license

revocation, lends further support to the sanction of disbarment from practice before

the IRS.

(b)(3)/26 USC 6103

has been characterized as a serious offense

The

by other ALJs who have adjudicated similar conduct. According to the U.S.

Supreme Court, tax deadlines are essential to the proper functioning of government:

Deadlines are inherently arbitrary; fixed dates, however, are often

essential to accomplish necessary results. The Government has

millions of taxpayers to monitor, and our system of self-assessment in

the initial calculation of a tax simply cannot work on any basis other

than one of strict filing standards. Any less rigid standard would risk

encouraging a lax attitude toward filing dates. Prompt payment of

taxes is imperative to the Government, which should not have to

assume the burden of unnecessary ad hoc determinations.

United States v. Boyle, 469 U.S. 241, 249 (1985). Citing Boyle, the appellate decisionUSC

(b)(3)/26 USC 6103

maker in (b)(3)/26

concluded that

imposes a

6103

considerable cost, in terms of time and expense, that is born [sic] by the IRS and

fellow citizens who comply with the tax laws and as such constitutes a serious

USC

offense for a tax professional. See Dir., Office of Prof’l Responsibility v. (b)(3)/26

6103

Complaint No. 2007-10 at 9 (Decision on Appeal, June 2008). In addition to costs,

(b)(3)/26 USC 6103

Respondent’s

demonstrates a disregard for the tax laws that all tax preparers,

including CPAs, must follow.

IRS-2012-00002

(b)(3)/26 USC 6103

The appropriate sanction for

varies

depending upon the circumstances. See, e.g., Dir., Office of Prof’l Responsibility v.

(b)(3)/26 USC

, Complaint No. 2007-10 at 9 (Decision on Appeal, June 2008) (suspension

6103

(b)(3)/26 USC 6103

of 48 months for

); Dir., Office of Prof’l

(b)(3)/26

Responsibility v. USC 6103 , Complaint No. 2010-08 (Decision on Appeal, June 2, 2011)

(b)(3)/26 USC 6103

(suspension of 24 months for

(b)(3)/26

); Dir., Office of Prof’l Responsibility v. USC 6103 , Compliant No. 2009-07

(Decision on Motion for Default Judgment, July 1, 2009) (disbarment imposed for

(b)(3)/26 USC 6103

); Dir., Office of Prof’l Responsibility v.

(b)(3)/26

USC 6103 , Complaint No. 2007-20 (Decision on Motion for Summary Judgment, May 9,

(b)(3)/26 USC 6103

2008) (suspension for 48 months for

); Dir.

(b)(3)/26

Office of Prof’l Responsibility v. USC 6103 , Complaint No. 2009-09 (Decision on Appeal,

(b)(3)/26 USC 6103

June 16, 2011) (suspension of 40 months for

(b)(3)/26 USC 6103

). Thus, Respondent’s

would warrant a significant period of suspension even absent any other

incidents of disreputable conduct.

As discussed herein, Complainant’s Motion for Summary Adjudication has

been granted with respect to six separate counts of disreputable conduct. His

criminal conviction for bank fraud and the revocation of his state CPA license alone

would warrant the sanction of disbarment. In addition, Respondent also made false

and misleading statements about his status as a CPA during a time when he knew

(b)(3)/26 USC 6103

his license had been suspended and

. Based upon the adjudications in other similar proceedings, this

conduct collectively warrants the sanction of disbarment.

B. Mitigating and Aggravating Factors

Even though other adjudications involving similar instances of disreputable

conduct justify imposition of the sanction of disbarment, mitigating and aggravating

factors are also appropriately considered. As noted, Respondent failed to provide

any response specific to the motions filed by Complainant and none directly

discussing the sanction that should be imposed.

Nevertheless, his letters could be construed as requesting a lesser__sanction

_____ (b)(6)

___ ____

based upon several alleged factors, including: (1) his age ( or years of age), (2)

(b)(6)

his health conditions (

), (3) his competent representation of tax payers for over 37 years, (4) the

fact that he has already served his allotted period of incarceration for the crimes he

IRS-2012-00002

committed; and (5) the instability in the economy. See generally July 18 filing; August

24 filing; September 21 filing; October 9 filing. Upon a thorough review of the entire

record, these unsupported allegations do not warrant mitigation of the sanction of

disbarment.

As to age and health, Respondent failed to submit any evidence documenting

the described medical conditions. Assuming his health problems are as reported,

those conditions as well as his age could potentially be mitigating factors. However,

Respondent has not alleged or demonstrated in any way how those conditions (or

his age) led to, resulted in, or should excuse any of the disreputable conduct proven

herein. While this tribunal is not unsympathetic, merely claiming poor health and

advanced age, without supporting evidence or argument, does not raise a genuine

issue of material fact regarding the appropriate level of sanction to be imposed.

With respect to his representation of clients over the last 37 years, Respondent

also failed to submit any evidence or documentation to substantiate the quality of

his representation. Instead, he relies solely on his own general assertions which are

conclusory and generally inadequate to overcome a properly supported motion for

summary adjudication. See, e.g., Podobnik, 409 F.3d at 594 (noting that a party cannot

rely on bare assertions or conclusory allegations to show the existence of a genuine

issue). Moreover, Respondent’s disreputable conduct, as established by clear and

convincing evidence, relates to recent behavior over the last several years showing a

pattern of misconduct. Absent any supporting evidence, Respondent has not

demonstrated a genuine issue of material fact about the appropriate type or length

of the sanction that should be imposed based upon his prior history of client

representation.

Respondent also argues that a disciplinary sanction in this proceeding will

punish him yet again for a crime that has already resulted in his incarceration.

However, IRS proceedings do not exist solely to punish. Sanctions also serve to

protect the public interest and to deter future incompetent and disreputable

conduct. Respondent’s incarceration reflects the seriousness of his crime and the

conviction for bank fraud demonstrates his dishonesty in dealings with others.

Assuming that Respondent’s previous incarceration is an appropriate mitigating

factor, Respondent has failed to raise a genuine issue showing how his incarceration

is material to the sanction imposed in this disciplinary proceeding – a sanction that

rests upon multiple counts of disreputable conduct of which only one count relates

directly to his incarceration.

IRS-2012-00002

Finally, Respondent has argued generally about the state of the economy and

the actions of various financial institutions as reported in the national media. While

he supplied numerous newspaper clippings with handwritten comments and

analysis, he has failed to raise a genuine issue showing how the state of the economy

or the actions of large financial institutions are material to any of the issues in this

disciplinary proceeding which is necessarily focused on the individual actions of

Respondent.

Respondent had ample opportunity to respond directly to Complainant’s

motions which requested the sanction of disbarment, and he chose not do so. The

unsupported assertions contained in Respondent’s letters fail to raise genuine issues

of material fact that would justify modification of the sanction of disbarment.

In further support of its request for disbarment, Complainant offers evidence

of other aggravating factors, including Respondent’s (b)(3)/26 USC 6103 and a

report prepared by the U.S. Treasury Inspector General for Tax Administration

(“TIGTA report”). See Complaint Exs. 30-32. Events preceding the counts set forth in

the Complaint may be considered as aggravating factors if substantiated by clear

(b)(3)/26

and convincing evidence. See generally Dir., Office of Prof’l Responsibility v. USC 6103 ,

Complaint 2010-19 at 7 (Decision on Appeal, Oct. 14, 2011). However, based upon

Respondent’s failure to raise a genuine issue of material fact that would mitigate the

sanction of disbarment, it is unnecessary to consider Complainant’s assertions

regarding aggravating factors or Respondent’s arguments related thereto.

C. Conclusion

The Complainant has demonstrated, based upon the undisputed factual

record and by clear and convincing evidence, that Respondent engaged in

disreputable conduct within the meaning of 31 C.F.R. § 10.51 (2008) as alleged in

Counts I, II, VII, VIII, IX, and X of the Complaint. Given the sanctions imposed in

other adjudications involving similar disreputable conduct and the lack of any

supporting evidence or argument by Respondent raising a genuine issue with

respect to any mitigating factors, the sanction of disbarment is deemed

commensurate with the seriousness of Respondent’s conduct. See 31 C.F.R. §§ 10.79,

10.81 (describing effect of disbarment).

IRS-2012-00002

VI. Order

For the foregoing reasons, it is hereby ORDERED that:

1. Complainant’s Motion for Decision by Default is denied as moot;

2. Complainant’s Motion for Summary Adjudication is granted in part.

Specifically, Respondent is found to have engaged in disreputable conduct

within the meaning of 31 C.F.R. § 10.51 (2008) as alleged in Counts I, II, VII,

VIII, IX, and X of the Complaint; and

3. Based upon that disreputable conduct, Respondent is disbarred from practice

before the Internal Revenue Service.

_____ _/s/________________________

Harvey C. Sweitzer

Administrative Law Judge

Appeal Information

Pursuant to 31 C.F.R. § 10.77, this Decision may be appealed by filing a Notice

of Appeal within thirty (30) days from the date that this Decision is served on the

party. The Notice of Appeal must be filed in duplicate with the Director of the

Office of Professional Responsibility and shall include a brief that states the

exceptions to the Decision of the Administrative Law Judge and supporting reasons.

A copy of the Notice of Appeal and supporting brief must be served on any nonappealing party’s representative.

See page 30 for distribution.

IRS-2012-00002

Distributed

By Fax and Certified Mail:

Emily Urban, Esq.

Internal Revenue Service

100 First Street, Floor 18

San Francisco, California 94105

(For Complainant)

Fax: 415-281-9506

By Certified Mail (no fax number provided):

(b)(3)/26 USC 6103

[Redacted]

(b)(3)/26 USC 6103

[Redacted]

(Respondent)

By First Class Mail:

Internal Revenue Service

Director, Office of Professional Responsibility

SE: OPR, Room 7238/IR

1111 Constitution Avenue NW

Washington, DC 20224

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.