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Failing to Respond to the IRS and the Tax Court

Posted on Sep. 8, 2022

I occasionally write about Tax Court disciplinary matters.  The most recent post on this subject describes the disbarment of a former Chief Counsel attorney after his conviction for tax evasion.  That post contains links to a few prior posts on disciplinary matters.  On August 25, 2022, the Tax Court issued a press release announcing the reprimand of an attorney who did not respond to court orders.  The discipline seems light but comes with a stern warning that if it happens again stronger measures will follow.  The case shows what happens when you ignore the court for a sufficient number of times.  As discussed below, I wonder if there might be a better way of alerting the public in these situations.  Not every Tax Court disciplinary matter involves someone who engages in bad practices in the Tax Court.  Cases of this type may make future members of the public looking to hire an attorney even more vulnerable.

One thing that surprised me about the case was the mention that the attorney had failed to communicate with Chief Counsel during the Branerton process of the primary case that caught its attention.  I was surprised because failing to communicate with Chief Counsel during the Branerton process seemed like the norm when I worked for Chief Counsel.  I was excited to see the Court cite to this failure as a part of the overall pattern of failures.  Perhaps the Court has cited to this type of failure in the past in disciplinary matters but I do not remember it.

The failure to respond to the Chief Counsel attorney during informal and formal discovery is an important factor when the IRS seeks to dismiss a case for failure to properly prosecute. The Court alluded to Mr. Barrett’s failure to work with Chief Counsel in a prior case in footnote 1 noting that this is at least the second case in which the Court entered a dismissal following his failure to response to Chief Counsel or to the Court.

The Court detailed his failures to respond to its show cause orders before moving on to prior disciplinary actions taken against him by the Louisiana State Board of CPAs, which revoked his CPA license for failure to respond to clients, and the Board of Tax Appeals of the State of Louisiana which discussed his history of unresponsiveness. Attorneys authorized to practice before the Tax Court are required to notify the Tax Court if their state bar takes action against them. Here, because the revocation of his license to practice occurred by the CPAs rather than the bar, I think he avoids sanctions for failing to notify the Tax Court; however, the actions taken by the Board of CPAs and the similarity of issues causing him trouble there and in the Tax Court must have influenced the Tax Court in some fashion.

I was a bit surprised that Mr. Barrett only received a reprimand. The Court found that the evidence before it did not support a finding that he “intentionally or knowingly failed to respond to the Court’s orders” in the primary case at issue. It also found that his actions did not cause injury to his clients. By not responding he caused injury to Chief Counsel’s office that had to prepare for trial and to the Court for having to deal with a hearing he failed to attend and sort out the aftermath.

My concern after reading this case relates to future potential clients of Mr. Barrett. Based on the actions in the Tax Court cases described and in the CPA and Board of Tax Appeals of the State of Louisiana cases, it would seem likely that he might fail to respond again. How does a future client with a Tax Court case learn of this likelihood in deciding whether to retain Mr. Barrett? I don’t think Angie’s List covers this situation. The Tax Court lists its disciplinary matters on its web site under the heading Rules and Guidance and the subheading Guidance for Practitioners. This might alert a diligent practitioner seeking to recommend a local attorney or partner with a local attorney but it would not be as likely to alert a taxpayer who probably would not go to this subheading. Under the heading Rules and Guidance and the subheading Guidance for Petitioners, no reference to disciplinary matters exists.

I have not done an exhaustive search of state bar web sites to determine how those entities alert the public to attorney disciplinary matters but I think at least some of them put this information in a place where it is relatively easily found by members of the public who want to do this type of due diligence.  Most state bars now have client reimbursement funds for fleeced clients and want to make sure that they don’t have to pay any more than necessary out of those funds – of course, they also don’t want people to be fleeced by attorneys as a general matter.  The Office of Professional Responsibility at the IRS states on its website that “Disciplinary Decisions are published in the Internal Revenue Bulletin at Disciplinary Sanctions – IRB.”  I wonder if there might be a better way for the Tax Court to advertise to members of the public the disciplinary matters that it takes.

Christine pointed out to me the way the Pennsylvania bar lets interested parties know about the discipline of attorneys in that state.  PA has a tab that lists any disciplinary action.  That’s the kind of consumer facing information delivery about attorneys with disciplinary problems that I think could assist the public as people look for representation.

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