Washington State

Office of the Attorney General

Attorney General

Bob Ferguson

AGO 1955 No. 133 - Sep 7 1955
Attorney General Don Eastvold


Failure of a C.P.A. to file an income tax return for year in which he had taxable income for which he is adjudged guilty in Federal court of a violation of sec. 145 (a) of the Internal Revenue Code constitutes a crime under the laws of the U.S., an essential element of which is dishonesty or fraud within the meaning of the Public Accounting Act.

                                                                 - - - - - - - - - - - - -

                                                               September 7, 1955

Honorable Roy C. Comer
State Board of Accountancy
2012 Smith Tower
Seattle 4, Washington                                                                                                              Cite as:  AGO 55-57 No. 133

Dear Sir:

            We have your letter of August 12, 1955, in which you advise that the State Board of Accountancy is considering the possible suspension or revocation of a certificate of a certified public accountant who failed to file his own income tax return for two years in which he had taxable income.  You advise that the accountant entered a plea of guilty to two violations of section 145 (a) U.S.C.A. and that he was adjudged guilty by the district court, fined, and imprisoned.  RCW 18.04.300 (6) provides that the board may revoke or suspend any certificate for

            "Conviction of any crime, an essential element of which is dishonesty or fraud, under the laws of any state or the United States;"

            You ask the opinion of this office on whether or not a violation of section 145 (a) U.S.C.A. constitutes a crime under the laws of the United States, an essential element of which is dishonesty or fraud.

             [[Orig. Op. Page 2]]

            We answer in the affirmative.


            Section 145 (a), Title 26, U.S.C.A., reads:

            "Any person required under this chapter to pay any estimated tax or tax, or required by law or regulations made under authority thereof to make a return or declaration, keep any records, or supply any information, for the purposes of the computation, assessment, or collection of any estimated tax or tax imposed by this chapter, who willfully fails to pay such estimated tax or tax, make such return or declaration, keep such records, or supply such information, at the time or times required by law or regulations, shall, in addition to other penalties provided by law, be guilty of a misdemeanor and, upon conviction thereof, be fined not more than $10,000, or imprisoned for not more than one year, or both, together with the costs of prosecution."

            Murrill v. State Board of Accountancy, 218 P. (2d) 569, is a California case almost directly in point.  Section 5100 (b) of the California Business and Professions Code provides that the certificate of an accountant may be revoked upon "* * * conviction of any crime, an essential element of which is dishonesty, deceit or fraud."  The California State Board of Accountancy had revoked petitioner's license to practice public accounting on the ground of conviction in a Federal court on his plea of guilty of violating section 145 (a), Title 26, U.S.C.A., by failing to supply information for income tax assessments in returns prepared by him for certain clients.  The California court held that the appellant was convicted of a crime, an essential element of which was dishonesty, deceit or fraud.

            Rheb v. Bar Association of Baltimore City, 186 Md. 200, 46 A. (2d) 289, was a proceeding for disbarment of an attorney who had pleaded guilty in Federal court to an indictment charging violation of section 145 (a), Title 26, U.S.C.A.  The court stated, at page 291,

             [[Orig. Op. Page 3]]

            "We think it is immaterial whether the Federal crime is to be classed as a misdemeanor or felony, an act of omission or commission.  Such conduct might properly be characterized as fraud or deceit, even if it did not involve moral turpitude."

            See, also,In re Burrus (Mo.), 258 S.W. (2d) 625.

            In re Hallihan (Cal.), 272 P. (2d) 768, involved a disbarment proceeding in which an attorney had been found guilty and sentenced for violating section 145 (b) of the Internal Revenue Code by willfully and knowingly filing false and fraudulent income tax returns.  The supreme court of California,en banc, held that such a conviction does notnecessarily involve moral turpitude and does not justifysummary disbarment.  The court then referred the matter to the Board of Governors of the State Bar to hold a hearing and to make recommendations on whether or not the commission of the offense of which the attorney was convicted involved moral turpitude or other misconduct warranting disciplinary action.

            We believe theHallihan case simply holds that a professional person convicted of income tax fraud is entitled to a hearing on the issue of whether or not the commission of such crime involves moral turpitude for the purpose of license revocation.  "Moral turpitude" is a more nebulous term than "fraud" or "dishonesty."  Accordingly, we advise, on the authority of the Murrill case, that a violation of section 145 (a) of the Internal Revenue Code constitutes a crime, an essential element of which is dishonesty or fraud.

            We believe any doubt as to the validity of this conclusion which may exist by the reason of the holding in the Hallihan case, is removed by virtue of the fact that RCW 18.04.320 requires a hearing in a proceeding for revocation or suspension of an accountant's license.

            We hope this analysis will prove helpful.

Very truly yours,

Attorney General

Assistant Attorney General