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Disbarment of Attorney by Tax Court Reversed by D.C. Circuit

Posted on Feb. 10, 2020

In Koresko v. U.S. Tax Court, No. 18-1146 (D.C. Cir. 2019) the court reversed the disbarment of Mr. Koresko from the Tax Court and remanded the case so that the Tax Court could give him the opportunity for a hearing before being disbarred, otherwise disciplined or exonerated. I read the short order from the circuit court remanding this case and became curious why the Tax Court would decline to give him a hearing before taking him off the record of approved attorneys. So, I had my research assistant pull the underlying documents including the briefs.

I will link to the documents so that anyone interested in the matter can easily access them. After quickly reviewing them, I understand what happened at the Tax Court. I found that the Tax Court was incredibly understanding and postponed the matter over a period of years. The new opportunity for a hearing is unlikely to change the outcome here, but the case gives a glimpse at the process for those interested. I wrote about a Tax Court disciplinary proceeding a couple of years ago regarding Aka v. United States Tax Court, 854 F.3d 30, 32 (D.C. Cir. 2017). Bob Kamman wrote about an order setting a hearing for a disciplinary proceeding.

Both the Aka case and the case Bob covered involved failures of petitioner’s counsel in proceedings before the Tax Court. The Koresko case involves the reciprocal disciplinary issue present in the Tax Court when another court or bar disciplines a practitioner. Mr. Koresko did nothing in his practice before the Tax Court to cause the Tax Court to initiate disciplinary proceedings against him the way it did against Mr. Aka. But Tax Court Rule 202 requires that a practitioner notify the Tax Court of any disciplinary action by another court or bar and can base its own disciplinary action on the action of the other venue. The issue here stems from multiple problems between Mr. Koresko and Pennsylvania, their timing and the timing of his failures to respond to the Tax Court’s offers of a hearing.

Here is the Tax Court’s announcement of the disbarment of Mr. Koresko and its explanation of the reason for the disbarment. Here is the Department of Justice brief to the D.C. Circuit which provides the best road map for understanding the case. Here is Mr. Koresko’s brief to the D.C. Circuit. Here is the order of the Pennsylvania Supreme Court and the Report and Recommendations of the Disciplinary Board of the Supreme Court of Pennsylvania. There is more here to read than most will want. I will summarize the issues, drawing heavily from the DOJ brief.

Mr. Koresko’s initial problem with the PA bar (as far as these proceedings go) concerns actions with respect to an ERISA plan. Then he gets in trouble relating to the sale of a home owned by he and his wife to the tenant. When he sold the property he did the legal work for the title policy. The property had two liens against it. One lien was satisfied with the proceeds of the sale. The other lien resulted from a suit against Mr. Koresko. He contested the validity of this judgment lien; however, he failed to mention it in the title report or to the buyer. The existence of this lien came to light when the holder of the lien sued Mr. Koresko and the buyer. Things went downhill from there with a number of his problems with the PA bar stemming from actions in the ensuing litigation. As with the Tax Court disbarment proceedings, the matter before the PA bar took quite some time. If nothing else, Mr. Koresko has definite skills in prolonging proceedings.

Here is a description from the DOJ brief:

The action that gave rise to this appeal arose from orders to show cause issued by the Tax Court due to (1) the Pennsylvania Supreme Court’s December 19, 2013 emergency suspension of Koresko’s license to practice of law, premised on misconduct connected to his fiduciary duties under the Employee Retirement Income Security Act of 1974, 28 U.S.C. §§ 1001, et seq., (“ERISA”) with regard to certain employee welfare benefit plans and (2) the Pennsylvania Supreme Court’s September 14, 2015 disbarment of Koresko, premised on “multiple litigation actions by Mr. Koresko from 2008 through 2013 related to the sale of a home by Mr. Koresko and his ex-wife to a tenant.” (A205-06.) It was also based on Koresko’s failure to inform the Tax Court of these and other disciplinary actions. (A205.) It is the Tax Court’s understanding that (in addition to Pennsylvania Supreme Court), the Florida Supreme Court, the United States Supreme Court, and the Eastern District of Pennsylvania have also disbarred Koresko, and that the Third Circuit has indefinitely suspended him. (See In re Koresko, 136 S. Ct. 2535 (2016) (Mem.); Florida Bar v. Koresko, 2016 WL 4143279 (Fla. 2016); A186.)

The DOJ brief also addressed the efforts of the Tax Court to deal with his case:

the Tax Court issued four orders to show cause, outlining precisely the bases for reciprocal discipline and for finding Koresko had violated Tax Court Rule 202(b) and Model Rule 3.4(a) by failing to alert the Tax Court to disciplinary actions taken by other courts. (A7-8; A97-99; A141-46; A184-87.) These orders provided ample notice of the bases for discipline.

The brief detailed the notice provided and the action taken:

the Tax Court offered the following potential hearing dates, with clear notice deadlines:

Order dateOffered hearing dateRequired notice dateCitation



The D.C. Circuit’s problem is that although Mr. Koresko did not respond timely to the timeframes set by the Tax Court, the Tax Court focused on his failure to request a hearing in early orders that were based on his suspension from the PA bar and not on the orders issued later after the PA bar disbarred him. So, his case will go back to the Tax Court which will offer him another opportunity for a hearing. Assuming that he timely accepts the new hearing, Mr. Koresko then faces the uphill battle to convince the Tax Court that it should not disbar him or take other disciplinary action. I would not expect the matter to move quickly based on what I have seen so far.

I am not sure the case offers many lessons, but it does provide insight into the disciplinary efforts of the Tax Court in a reciprocal discipline matter and serve as a reminder that if any readers have friends or acquaintances who encounter disciplinary problems at the local level, they need to advise their friends and acquaintances to notify the Tax Court. Because the Tax Court is not the only bar with reciprocal discipline, it should also be noted that if you have a problem like Mr. Aka’s that originates in the Tax Court, that problem can impact a practitioner’s ability to practice in other bars to which the practitioner may be a member. The main lesson from reading bar discipline cases is to avoid doing the things that bring these actions down upon you. Only a small minority of practitioners go through this process at the Tax Court. Make sure you are not a member of that minority.

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