Committee on Professional Ethics & Conduct of the Iowa State Bar Ass'n v. Baudino

452 N.W.2d 455, 1990 WL 32220
CourtSupreme Court of Iowa
DecidedApril 16, 1990
Docket89-1225
StatusPublished
Cited by23 cases

This text of 452 N.W.2d 455 (Committee on Professional Ethics & Conduct of the Iowa State Bar Ass'n v. Baudino) is published on Counsel Stack Legal Research, covering Supreme Court of Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Committee on Professional Ethics & Conduct of the Iowa State Bar Ass'n v. Baudino, 452 N.W.2d 455, 1990 WL 32220 (iowa 1990).

Opinions

SNELL, Justice.

Professional ethics violations by lawyers who fail to file their income tax returns on time abound in our case reports. This is another one. Appellant Robert J. Baudino, Jr., appeals the recommendation of the Grievance Commission that his license to practice law be suspended for six months. He argues his case is different from others. From that premise, he questions our purpose, our standards, our notice to lawyers, our consistency and our fairness in imposing sanctions for these violations. Appellant suggests the court should declare “we can do better.”

After a full hearing at which Baudino was represented by counsel, the commission found a failure to timely file his federal and Iowa income tax returns for 1984, 1985 and 1986. The 1984 returns were filed late after he received two extensions. The same is true of the 1985 returns. The 1986 return was filed late after receiving an extension. The commission decided that these acts “adversely reflect on his fitness to practice law and violate EC 1-5 and DR 1-102(A)(1), (5), and (6).” The commission also found Baudino falsely certified that he had filed these returns on the client security questionnaire and thereby violated DR 1-102(A)(1) and (4).

The Iowa Code of Professional Responsibility, Canon I, EC 1-5 states:

A lawyer should maintain high standards of professional conduct and should encourage fellow lawyers to do likewise. He should be temperate and dignified, and he should refrain from all illegal and morally reprehensible conduct. Because of his position in society, even minor violations of law by a lawyer may tend to lessen public confidence in the legal profession. Obedience to law exemplifies respect for law. To lawyers especially, respect for the law should be more than a platitude.

Disciplinary rule DR 1-102 Misconduct states:

(A) A lawyer shall not:
(1) Violate a disciplinary rule.
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(4) Engage in conduct involving dishonesty, fraud, deceit, or misrepresentation.
(5) Engage in conduct that is prejudicial to the administration of justice.
(6) Engage in any other conduct that adversely reflects on his fitness to practice law.

Baudino argued there and here that his acts amounted to a mere misinterpretation of the tax law and a misunderstanding of the questions asked by the Client Security Commission.

Admitted to the practice of law in 1978, Robert Baudino has practiced in Des Moines since then and currently is a shareholder in his law firm. He has been active in professional organizations generally and in his specialty. A lecturer in health care law at seminars and at Drake Law School, he has also generously served his church in several leadership positions.

His problems started when he decided to do his own tax return. He physically set out a big box full of “all the papers and [457]*457things” and then did the returns in handwriting. Some time prior he had read language on an Internal Revenue Service form (form 8176), sent out as a notice to taxpayers as follows:

If you paid tax for this period, had tax withheld from your income or had credits that would give you a refund, you must file a return within three years from the date the return was due to get a refund.

Baudino did some rough calculations to determine his tax liability for 1984 income and figured he had a refund coming. He knew the law corporation in which he was a shareholder had withheld money for taxes from his earnings. The corporation had also filed a corporate tax return, a partnership return, supplied him with copies, gave him W-2 statements and a K-l statement showing investment tax credits. Reasoning that the federal and state governments owed him money and they already had information from his employer regarding his income, he concluded that he did not have to file a personal income tax return for three years. The three years ran from whenever the return was due, he thought.

Notwithstanding this analysis, Baudino applied for and received extensions to file his 1984 returns. An extension to file the federal return was granted to August 15, 1985; a second extension was requested but no copy of a second extension was offered in evidence. The federal return was filed November 26,1985. The State of Iowa granted an extension to August 30, 1985. Baudino thought he got another extension to October 31, 1985. He filed the state return for 1984 on October 31, 1986.

Extensions were sought and obtained for the 1985 federal return to October 15,1986. This return was filed on July 27,1987. The Iowa return for 1985 income had a due date extension first to August 30, 1986, then to October 31, 1986. This return was filed on March 10, 1988.

Baudino acknowledges that all of these returns were filed after the extended due dates. In fact, he stated as “absolutely correct” that he did not even calculate the Iowa tax due on 1984 income until September or October of 1986, notwithstanding the extension granted to him ran out October 31, 1985.

The story surrounding his 1986 return is different. For this year he knew he did not have a refund coming. His law practice had been very profitable, garnering him an adjusted gross income over $100,000. He thought he owed about $14,000 to the federal government in additional tax and about $4000 more to the State of Iowa. He prepared these returns and gave them in envelopes to his secretary in September 1987. He did not enclose any checks in payment of tax, however. His custom was to let the tax authorities calculate the tax and he would pay it when they let him know the final amount due.

Baudino did not hear anything from the tax authorities until March 1988, when someone from IRS informed him the 1986 tax return had not been received. On investigation, Baudino found the tax returns were still in his office. He took them to the postal department March 7, 1988.

Baudino’s explanation for the late filing of the 1986 return is to blame his secretary. He was having trouble with her and eventually she left for other employment. His explanation for seeking extensions, even after deciding he had three years to file a return, is “an extra bit of precaution or safety on my part.” No reason is proffered for abjuring this safety net thought so important.

That aside, Baudino insists that his mistaken interpretation of the tax law was the nonculpable mistake of a lawyer not knowledgeable in the field who relied on language put out by the IRS itself. He fortifies his position by showing that the IRS actually refunded more money to him based on his 1984 income than he had claimed. Later, the IRS recalculated and determined that no refund was due and that $2,298.36 more money for taxes was owed for 1984 income than had been paid.

This brief history of his 1984 income tax liability illustrates the illogic of Baudino’s argument. His idea that he had three years to file a personal return as[458]*458sumes the validity of his judgment that he is entitled to a refund. It also assumes that since a corporate return was filed showing his law practice income that the government had received all the information to which it was entitled. Ignored is the fact that he could have had unreported income from many other sources that would be taxable.

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Cite This Page — Counsel Stack

Bluebook (online)
452 N.W.2d 455, 1990 WL 32220, Counsel Stack Legal Research, https://law.counselstack.com/opinion/committee-on-professional-ethics-conduct-of-the-iowa-state-bar-assn-v-iowa-1990.