Ethics: Reinstatement after tax suspension

Melody Nashan is staff counsel for the Office of Chief Disciplinary Counsel in Jefferson City.

The state director of revenue is authorized to notify the clerk of the Supreme Court of Missouri of lawyers who are delinquent or who haven’t filed tax returns with the Missouri Department of Revenue (MoDOR).¹ The legislature has a similar provision which applies to many licensed professionals – for example, physicians, accountants, barbers, tattoo artists, and private investigators.² 

Process 

Within 30 days after the clerk of the Court receives notice of lawyers who haven’t filed Missouri tax returns or paid their state taxes, the clerk notifies each lawyer on the list that their license to practice law is subject to automatic suspension unless the matter is “satisfactorily resolved within 30 days of the last notice sent by the Clerk.”³ That notice is sent by first class United States mail.⁴ The clerk sends those letters to the address lawyers have provided on their annual enrollment statement and/or the last address they have provided to the clerk. 

Lawyers may “satisfactorily resolve” the matter in two ways: if MoDOR “revises its report to the Clerk of this Court by removing the name of the lawyer from the report;” or if the lawyer “provides an affidavit setting out facts showing that the liability is being contested in appropriate administrative or judicial proceedings.”⁵ This isn’t a situation where lawyers must pay incorrect tax bills to maintain their licenses. Rather, lawyers must address the tax assessments and formally contest the liability or pay their taxes. Lawyers are removed from the list if they timely enter a payment plan with MoDOR. If the matter is not “satisfactorily resolved” within 30 days, the Court will issue an order suspending the lawyers on the list. 

Often, lawyers report they never received notice their license would be automatically suspended. The clerk, however, forwards the notice to the most recent address the lawyer provided pursuant to Rule 6.01(b). It is the lawyer’s responsibility to provide the clerk “every change” in the lawyer’s mailing address or email address.⁶ If the lawyer did not keep their address updated as required by Rule 6.01(b), the notice might not have reached the lawyer. 

If the notice letter is returned, the clerk will next email it to the email address on file, also pursuant to Rule 6.01(b), or call the phone number, if any, on the official roll of attorneys maintained by the attorney enrollment office of the Court.⁷ 

Reinstatement 

Rule 5.245(c) contemplates actions taken by the lawyer to resolve the tax matter before the Court enters its order. After the order is entered, generally, the only way to be reinstated is via Rule 5.28.⁸ Even if a lawyer obtains a “Certification of Tax Compliance” from MoDOR after being suspended, that alone will not result in reinstatement. The certification is merely a prerequisite. Petitioners usually are not required to pay all tax liabilities before MoDOR issues a certification. The Office of Chief Disciplinary Counsel understands that MoDOR will issue a “Certification of Tax Compliance” if the petitioner has entered into a payment plan with MoDOR.⁹ 

Under Rule 5.28, the reinstatement process begins with a petition filed with the Supreme Court of Missouri “substantially in the form as set forth in Disciplinary Form A,” entitled “Petition for Reinstatement to Practice Law Pursuant to Rule 5.28.” 

Thereafter, the Court refers the petition to OCDC for a character and fitness investigation of the petitioner, a report, and a recommendation.¹⁰ OCDC sends the petitioner an “Application for Character and Fitness Report” to complete and an “Authorization for Release of Information” to execute. The process is similar to the bar admission process and designed to elicit information needed to assess whether the petitioner is of good moral character and fit to practice law, and if the best interests of the public will be served by the reinstatement of the petitioner’s license. 

Reinstatement after tax suspension may differ from other reinstatements in that, if the suspension has been in place for three years or less, the petitioner “shall be reinstated as a matter of course 45 days after the petition for reinstatement is referred to the Chief Disciplinary Counsel for report and recommendation.”¹¹ However, if OCDC determines within the 45-day period that further investigation is necessary, or if the petitioner does not provide OCDC the information required to make a determination as to whether further investigation is required, OCDC will file a motion to respond to the petition for reinstatement, and “the license shall not issue and the matter shall proceed as otherwise provided in” Rule 5.28(k).¹² 

OCDC endeavors to investigate petitions for reinstatement after tax suspension within the 45-day window; however, it can only investigate quickly when it receives all the necessary information from the petitioner. OCDC, therefore, asks petitioners to provide the necessary information within a fairly short time frame. The time frame benefits the petitioner as much as it does OCDC. If OCDC can investigate the petition within the 45-day period, and its findings are favorable, it will inform the Court that it has no objection to the reinstatement of the petitioner’s license to practice. The Court’s turnaround after such a filing of no objection, historically, has been short. If, however, the petitioner does not provide the requested information quickly, OCDC will file the motion to respond with the Court. OCDC will then complete its investigation and prepare a report and recommendation that it will send to the Court. The report and recommendation take time, and when a report and recommendation from OCDC, and possibly a response from the petitioner, are filed, the Court has not ruled as quickly. During this time, the petitioner remains suspended. 

So, while petitioners may chafe at a requested 10-day turnaround for submission of the requested information, that short period is to their benefit. The petitioner may take longer but that extends their suspension and makes it more likely the character and fitness investigation cannot be accomplished within 45 days. 

The reinstatement rule also includes a twist regarding continuing legal education credits. Rule 5.28(d) requires that, “within one year prior to the date of the filing of the petition for reinstatement, the [petitioner] has completed at least 15 hours of continuing legal education credit, including at least three hours of ethics credit, one of which must be on the elimination of bias.” Yearly MCLE compliance through the preceding June may not be enough because the credits must have been completed within the year prior to the date the petition for reinstatement was filed. For example, if a lawyer petitions for reinstatement Oct. 1, 2024, pursuant to Rule 5.28(d), they need to have earned the required CLE credits between Sept. 30, 2023, and Oct. 1, 2024. Even if they were compliant for the July 1, 2023, through June 30, 2024, annual reporting year, they still need the Rule 5.28(d) required CLEs to have been between Sept. 30, 2023, and Oct. 1, 2024. If a lawyer attended CLEs between July1, 2023, and Sept. 29, 2023, those credits would not count toward the Rule 5.28(d) requirement. 

OCDC reviews petitions for reinstatement after tax suspension (and for three years or less) on an expedited bases, but the burden of proof to establish fitness remains on the petitioner. Requirement 11 of “Disciplinary Form A” reads: “I understand that I carry the burden to establish, by clear and convincing evidence, that I have good moral character and that the best interest of the public will be served by my reinstatement to practice law.” Rule 5.28(i) provides that a petitioner for reinstatement “must establish, by clear and convincing evidence, that the person is of good moral character, is fit to practice law, and the best interest of the public will be served by reinstatement of the person’s license to practice law.” 

Subsection (i) of Rule 5.28 also provides 11 factors to consider in determining whether the petitioner has met this burden. These factors, applicable after the tax suspension and in all disciplinary reinstatement cases, include: 

– Acceptance of responsibility for wrongdoing with sincerity and honesty; 
– The extent of rehabilitation as shown by good current reputation for character and moral standing in the community; 
– The nature and severity of the misconduct leading to discipline; – The person’s conduct since discipline; 
– The time elapsed since discipline; 
– Other instances of dishonesty, criminal behavior, professional discipline, unauthorized practice of law, academic and employment misconduct, financial responsibility or involvement in or neglect of legal and professional matters; – The cumulative effect of all misconduct; 
– The person’s current competency and qualifications to practice law; 
– Restitution; 
– Candor in the discipline and reinstatement processes; and 
– Positive social contributions since the misconduct. 

Of course, application of these factors is on a case-by-case basis. Many tax-suspended lawyers obtain a “Certification of Tax Compliance” the same day or same week the order is handed down. In that instance, “conduct since discipline,” or “positive social contributions since the misconduct” aren’t particularly telling; however, other misconduct, criminal behavior, professional discipline, unauthorized practice of law, and financial responsibility are scrutinized. Further, “candor in the discipline and reinstatement process” is key. 

Rule 5.28(c)(2) also provides: “A person automatically suspended under Rule5.245 for three years or less who is reinstated under this Rule 5.28(c) is retroactively reinstated if the person is then in compliance with Rules 6.01 and 15.” Tax-suspended lawyers, however, must still comply with Rule 5.27 and may not continue practicing law while suspended.¹³ 

Conclusion 

Perhaps the biggest takeaway here, other than “file and pay your taxes,” is that lawyers must keep the clerk of the Court updated as to their current addresses – don’t wait until the next enrollment period, don’t count on someone forwarding your mail, and don’t register a mailbox that isn’t checked regularly. Getting the notice provides lawyers time to address the issue and, hopefully, prevent the suspension. Lawyers who fail to complete the easy task of updating their address may end up with a suspension.

Endnotes

1 Rev.Mo.Stat. § 484.053 (2003). 

2 Rev.Mo.Stat. § 324.010 (2004). 

3 Rule 5.245(b).

4 Id.

5 Rule 5.245(c).

6 Rule 6.01(b).

7 Rule 5.245(b).

8 There have been exceedingly rare instances where the Court amends its order to remove a lawyer from the tax suspension list. OCDC is not involved in such a removal and is only notified after the fact. OCDC is aware of the removal of a lawyer from the tax suspension list when MoDOR confirmed to the clerk that MoDOR incorrectly included the lawyer on the suspension list, and when a notice from the clerk of the Court was returned to clerk by the U.S. Postal Service after the suspension order was entered and after the lawyer had resolved their tax issue. 

9 OCDC has been informed by petitioners that they had entered a tax payment plan with MoDOR. OCDC is not involved in the preparation or details of such agreements.

10 Rule 5.28(k).

11 Rule 5.28(c)(2).

12 Rule 5.28(c)(2).

13 See also, Office of Legal Ethics Counsel Informal Opinion 2022-03.