               IN THE SUPREME COURT OF IOWA
                              No. 10–0425

                         Filed December 17, 2010


IOWA SUPREME COURT ATTORNEY DISCIPLINARY BOARD,

      Complainant,

vs.

THOMAS E. LUSTGRAAF,

      Respondent.



      On review of the report of the Grievance Commission of the

Supreme Court of Iowa.



      Grievance commission recommends attorney receive a public

reprimand. ATTORNEY REPRIMANDED.



      Charles L. Harrington and David J. Grace, Des Moines, for

complainant.



      Thomas E. Lustgraaf of Lustgraaf Law Office, Council Bluffs,

pro se.
                                     2

TERNUS, Chief Justice.

      This matter comes before us on the report of a division of the

Grievance Commission of the Supreme Court of Iowa. See Iowa Ct. R.

35.10. The Iowa Supreme Court Attorney Disciplinary Board alleged the

respondent, Thomas E. Lustgraaf, violated ethical rules by failing to file

income tax returns for four years.       The grievance commission found

Lustgraaf violated our ethical rules and recommended a public

reprimand.   Upon our respectful consideration of the findings of fact,

conclusions of law, and recommendation of the commission, we find

Lustgraaf engaged in ethical violations as a result of his negligent failure

to file tax returns, and therefore, we publicly reprimand him.

      I. Standard of Review.

      The supreme court reviews attorney disciplinary proceedings

de novo. Iowa Supreme Ct. Att’y Disciplinary Bd. v. Wagner, 768 N.W.2d

279, 281 (Iowa 2009). The commission’s findings and recommendations

are given respectful consideration, but we are not bound by them. Iowa

Supreme Ct. Att’y Disciplinary Bd. v. Casey, 761 N.W.2d 53, 55 (Iowa

2009). The board has the burden of proving attorney misconduct by a

convincing preponderance of the evidence.         Iowa Supreme Ct. Att’y

Disciplinary Bd. v. Conrad, 723 N.W.2d 791, 792 (Iowa 2006).             As

frequently stated, “ ‘This burden is less than proof beyond a reasonable

doubt, but more than the preponderance standard required in the usual

civil case.’ ” Id. (quoting Iowa Supreme Ct. Bd. of Prof’l Ethics & Conduct

v. Lett, 674 N.W.2d 139, 142 (Iowa 2004)). Upon proof of misconduct, we

may impose a lesser or greater sanction than that recommended by the

commission. Id.
                                            3

       II. Factual Findings.

       Lustgraaf was admitted to practice law in April of 2004.

Thereafter, he practiced primarily criminal law in Council Bluffs.                     On

September 3, 2009, the board filed a disciplinary complaint against

Lustgraaf alleging he had failed to file income tax returns for the years

2002 through 2007. The board alleged that Lustgraaf’s failure to file the

returns violated Iowa Rules of Professional Conduct 32:8.4(b) (“It is

professional misconduct for a lawyer to . . . commit a criminal act that

reflects adversely on the lawyer’s honesty, trustworthiness, or fitness as

a lawyer in other respects[.]”), 32:8.4(c) (“It is professional misconduct for

a lawyer to . . . engage in conduct involving dishonesty, fraud, deceit, or

misrepresentation[.]”), and 32:8.4(d) (“It is professional misconduct for a

lawyer to . . . engage in conduct that is prejudicial to the administration

of justice[.]”). 1 The board subsequently dropped the charges for tax years

2002 and 2003 because Lustgraaf was not licensed as a lawyer in those

tax years.

       The board contends Lustgraaf’s failure to file tax returns violated

26 U.S.C. §§ 6012(a)(1)(A), 6017, and 6072(a) (2000). Under 26 U.S.C.

§ 6017, an individual who has net earnings from self-employment
exceeding $400 must file an income tax return.                      Under 26 U.S.C.

§ 6072(a), a taxpayer is required to file tax returns based on a calendar

year by April 15 of the following year, unless an extension is obtained.

Schultz v. United States, 92 Fed. Cl. 213, 219 (Fed. Cl. 2010). 26 U.S.C.

§ 6012(a)(1)(A) makes it a criminal offense for a taxpayer who has earned


       1The    board also alleged a violation of rule 32:8.4(a) (“It is professional
misconduct for a lawyer to . . . violate . . . the Iowa Rules of Professional Conduct[.]”).
We do not consider a violation of this rule as a separate ethical infraction, Iowa
Supreme Ct. Att’y Disciplinary Bd. v. Templeton, 784 N.W.2d 761, 769 (Iowa 2010), and
so give it no further consideration.
                                           4

sufficient income to require him to file a federal income tax return to fail

to do so. 2 See United States v. Stierhoff, 549 F.3d 19, 25 (1st Cir. 2008);

see also United States v. Kahl, 583 F.2d 1351, 1355 (5th Cir. 1978)

(finding information properly notified defendant of alleged crime when it

specifically stated “that the earnings of the accused were sufficient to

require him to file a return and he failed to do so”).

       At the disciplinary hearing, Lustgraaf testified he had innocently

and mistakenly believed that he had insufficient income to require the

filing of the returns. He testified he was unaware of the requirement to

file a return when self-employment income exceeds $400. 3

       Lustgraaf also presented the testimony of a certified public

accountant from whom he had sought tax advice since 1996.                         This

witness testified that he prepared tax returns for Lustgraaf in the years

preceding Lustgraaf’s law school years, but did not prepare any returns

while Lustgraaf attended law school because Lustgraaf did not have any

income during that time.            The witness testified that, in each year

subsequent to Lustgraaf’s graduation from law school, Lustgraaf came to

the witness’s office to talk about Lustgraaf’s income tax situation. On

these occasions, the accountant would ask Lustgraaf whether Lustgraaf
was “going to have a tax liability.” Lustgraaf always responded that he

“put out more money than [he] took in,” and the accountant “never got

into specifics on those years.” The accountant testified that, if he had

thought Lustgraaf was required to file income tax returns in the years in

question, he would have told Lustgraaf to file.


       2Other  sections of the federal tax code provide for increased penalties when a
taxpayer’s failure to file is willful, but the board did not allege a violation of these
statutory provisions.
       3Lustgraaf testified he did not take an income tax course in law school, and his
work as an attorney was limited to criminal cases.
                                     5

        By the time of the hearing, Lustgraaf had filed all tax returns and

paid all required taxes. These returns showed that, in 2004, Lustgraaf’s

adjusted gross income was negative $6757. Although he owed no income

taxes, he owed the federal government $2 in self-employment tax.

Lustgraaf received a refund from the state of $16 in tax year 2004. In

2005, Lustgraaf’s adjusted gross income was negative $23,833. He owed

the federal government $93 in self-employment taxes and received a

refund of $12 from the state. In 2006, Lustgraaf’s federal adjusted gross

income was negative $21,571. He owed no income tax on this amount,

but did owe $1234 in self-employment tax.       He received an $8 refund

from the state. Lustgraaf had net operating business losses in 2006 that

could be carried forward to 2007. These losses were sufficient to reduce

his 2007 adjusted gross income to zero. Because Lustgraaf had prepared

the 2007 return before he completed the return for 2006, he did not

claim the net operating loss for 2006 in 2007. (He has three years to file

an amended return.) Consequently, his tax returns for 2007 show an

adjusted gross income of $33,043. He owed no federal income tax on

this amount, but did owe $2339 in self-employment tax as well as

penalty and interest of $899.37 on the self-employment tax. The record

does not show whether taxes were owed to the state for the tax year

2007.

        Lustgraaf was not charged with any criminal conduct by any

governmental entity. He has no prior record of discipline, and two local

attorneys testified that Lustgraaf had a good reputation in the legal

community of Council Bluffs.        Lustgraaf also presented evidence of

significant pro bono work.      It appears he fully cooperated with the

disciplinary authorities and did not attempt to shift the blame for his

conduct to anyone else.
                                     6

         The commission found that Lustgraaf had not intended to defraud

the government when he failed to file tax returns and that he “incorrectly

assumed that he did not need to file income tax returns for the years

2004 through 2007.” Upon our review of the record and giving particular

weight to the commission’s assessments of the witnesses’ credibility, we

agree.     See Iowa Supreme Ct. Att’y Disciplinary Bd. v. Marzen, 779

N.W.2d 757, 759 (Iowa 2010) (noting court gives particular weight to the

commission’s credibility findings although court is not bound by them).

While it is true one is presumed to know the law, as a factual matter,

Lustgraaf mistakenly believed he had no obligation to file tax returns

during the years in question. Lustgraaf’s conduct was certainly careless,

but we conclude it was not fraudulent.

         III. Ethical Violations.

         A. Rule 32:8.4(b): Criminal Conduct. Rule 32:8.4(b) prohibits

the commission of a criminal act that reflects adversely on the lawyer’s

honesty, trustworthiness, or fitness as a lawyer in other respects.      A

lawyer may be found in violation of this rule, even though he has not

been charged or convicted of a crime. See Iowa Supreme Ct. Bd. of Prof’l

Ethics & Conduct v. Bell, 650 N.W.2d 648, 651–52 (Iowa 2002)

(discussing comparable DR 1–102(A)(3) of the Iowa Code of Professional

Responsibility for Lawyers and citing cases); Comm. on Prof’l Ethics &

Conduct v. Hall, 463 N.W.2d 30, 33, 35 (Iowa 1990) (holding respondent’s

commission of theft constituted violation of DR 1–102(A)(3), even though

respondent was not charged with or convicted of a crime). In this case,

Lustgraaf failed to file tax returns for years 2004 through 2007 by

April 15 of the following calendar year despite having sufficient income to

trigger the filing requirement. This evidence is sufficient to establish a

violation of 26 U.S.C. § 6012. In addition, we think Lustgraaf’s conduct
                                      7

reflects adversely on his fitness as a lawyer.      Iowa Supreme Ct. Att’y

Disciplinary Bd. v. Fields, 790 N.W.2d 791, 796 (Iowa 2010). Therefore,

we agree with the commission that Lustgraaf violated rule 32:8.4(b).

      B. Rule 32:8.4(c): Misrepresentation.         We have stated that a

lawyer makes a misrepresentation in violation of our ethical rules when

his income exceeds the sums requiring the filing of a tax return and he

fails to file a return. Id. at 795; Iowa Supreme Ct. Att’y Disciplinary Bd. v.

Iversen, 723 N.W.2d 806, 810 (Iowa 2006).        In the cases in which we

have found the existence of a misrepresentation, the respondent had

willfully failed to file returns, had committed a fraudulent practice, or

had made a false statement.        See, e.g., Fields, 790 N.W.2d at 797

(attorney pleaded guilty to two counts of fraudulent practice in the

second degree); Iversen, 723 N.W.2d at 809–10 (attorney pleaded guilty to

crime of fraudulent practice); Comm. on Prof’l Ethics & Conduct v.

Humphreys, 524 N.W.2d 396, 397 (Iowa 1994) (jury convicted respondent

in federal court of willful tax evasion); Comm. on Prof’l Ethics & Conduct

v. Clauss, 445 N.W.2d 758, 760 (Iowa 1989) (respondent provided false

answers about federal and state income tax filings on client security

questionnaires). These cases are consistent with the general rule that

“misrepresentation requires intent to deceive to support an ethical

violation.” Iowa Supreme Ct. Att’y Disciplinary Bd. v. Sobel, 779 N.W.2d

782, 787 (Iowa 2010).

      In the instant action, however, the board did not allege or present

any evidence that Lustgraaf’s failure to file the returns was willful, done

with an intent to defraud, or otherwise deceitful.       Nor did the board

present evidence that Lustgraaf made any false statements in connection

with his failure to file tax returns. Lustgraaf mistakenly believed he was

not required to file returns, making his failure to file negligent. We hold
                                    8

this evidence does not support a finding that Lustgraaf engaged in

misrepresentation, and therefore, the board failed to prove that Lustgraaf

violated rule 32:8.4(c).

       C. Rule 32:8.4(d): Conduct Prejudicial to the Administration

of Justice.   We hold that Lustgraaf’s mistaken belief that he was not

required to file tax returns does not constitute conduct prejudicial to the

administration of justice.    “ ‘Whether conduct is prejudicial to the

administration of justice is not subject to a precise test.’ ” Iowa Supreme

Ct. Att’y Disciplinary Bd. v. Monroe, 784 N.W.2d 784, 788 (Iowa 2010)

(quoting Iowa Supreme Ct. Att’y Disciplinary Bd. v. Buchanan, 757

N.W.2d 251, 255 (Iowa 2008)). “Generally, acts that have been deemed

prejudicial to the administration of justice have ‘hampered the efficient

and proper operation of the courts or of ancillary systems upon which

the courts rely.’ ” Iowa Supreme Ct. Att’y Disciplinary Bd. v. Borth, 728

N.W.2d 205, 211 (Iowa 2007) (quoting Iowa Supreme Ct. Bd. of Prof’l

Ethics & Conduct v. Steffes, 588 N.W.2d 121, 123 (Iowa 1999)); accord

Monroe, 784 N.W.2d at 788.      “Examples of conduct prejudicial to the

administration of justice include paying an adverse expert witness for

information regarding an opponent’s case preparation, demanding a

release in a civil action as a condition of dismissing criminal charges,

and knowingly making false or reckless charges against a judicial

officer.”   Iowa Supreme Ct. Att’y Disciplinary Bd. v. Templeton, 784

N.W.2d 761, 768 (Iowa 2010). The mere commission of a criminal act

will not constitute a violation of rule 32:8.4(d) unless that conduct

somehow impedes the operation of the justice system. Id.

       The record does not establish that Lustgraaf’s failure to file his

personal income tax returns prejudiced the administration of justice.

There was no evidence Lustgraaf’s actions affected any particular court
                                            9

proceeding or any ancillary system supportive of any court proceeding.

Consequently, Lustgraaf’s behavior, even if criminal, is not the sort of

conduct that prejudices the administration of justice within the meaning

of rule 32:8.4(d).

       IV. Sanctions.

       “ ‘There is     no    standard     sanction     for   a   particular     type   of

misconduct, and though prior cases can be instructive, we ultimately

determine      an     appropriate      sanction      based       on   the     particular

circumstances of each case.’ ” Wagner, 768 N.W.2d at 287 (quoting Iowa

Supreme Ct. Att’y Disciplinary Bd. v. Earley, 729 N.W.2d 437, 443 (Iowa

2007)); accord Casey, 761 N.W.2d at 61. In tailoring a sanction to the

specific circumstances of a particular case,

       “we consider the nature of the violations, the attorney’s
       fitness to continue in the practice of law, the protection of
       society from those unfit to practice law, the need to uphold
       public confidence in the justice system, deterrence,
       maintenance of the reputation of the bar as a whole, and any
       aggravating or mitigating circumstances.”

Casey, 761 N.W.2d at 61 (quoting Iowa Supreme Ct. Att’y Disciplinary Bd.

v. Ireland, 748 N.W.2d 498, 502 (Iowa 2008)); accord Wagner, 768

N.W.2d at 287.

       In prior reported disciplinary cases involving failure to file tax

returns, we have imposed suspensions ranging from sixty days to three

years. 4 Iversen, 723 N.W.2d at 810; Iowa Supreme Ct. Bd. of Prof’l Ethics


       4In Iowa Supreme Court Attorney Disciplinary Board v. Johnston, 732 N.W.2d 448
(Iowa 2007), we noted the respondent’s prior disciplinary history included a public
reprimand in 1991 for failing to file state and federal income tax returns for five years.
732 N.W.2d at 450. Because this reprimand was not the subject of a disciplinary
opinion rendered by this court, we assume the public reprimand was issued by the
board in accordance with its authority under Iowa law. See 16 Gregory C. Sisk &
Mark S. Cady, Iowa Practice Series: Lawyer and Judicial Ethics § 2.6(a), at 47 (2010)
(noting under Iowa Court Rules effective prior to July 2005, the “Board . . . had the
authority to issue a public reprimand that became final if not objected to by the
                                        10

& Conduct v. Doughty, 588 N.W.2d 119, 120 (Iowa 1999) (citing cases);

Comm. on Prof’l Ethics & Conduct v. Crawford, 351 N.W.2d 530, 531–32

(Iowa 1984) (citing cases). In our prior cases imposing a suspension for

failing to file tax returns, the attorney engaged in a willful failure to file, a

fraudulent practice, or other more serious misconduct involving issues of

dishonesty. See, e.g., Iversen, 723 N.W.2d at 809 (noting attorney had

pled guilty to crime of fraudulent practice in the second degree); Iowa

Supreme Ct. Bd. of Prof’l Ethics & Conduct v. O’Brien, 690 N.W.2d 57, 57

(Iowa 2004) (stating respondent had been convicted of fraudulent

practices in the third degree); Humphreys, 524 N.W.2d at 397 (noting

respondent had been convicted of willful tax evasion); Clauss, 445

N.W.2d at 760 (stating attorney had falsely stated on client security

questionnaires that he had filed his tax returns); Crawford, 351 N.W.2d

at 532 (rejecting commission’s finding that respondent’s failure to file

was negligent, holding instead that attorney’s conduct was willful). An

element of dishonesty is lacking in the instant action in which the board

proved only Lustgraaf’s negligence.          Lustgraaf’s less culpable state of

mind in failing to comply with the requirement to file income tax returns

is a significant distinguishing fact from our prior cases.

       In addition to the fact that Lustgraaf’s conduct did not involve an

element of dishonesty, other mitigating factors are present.             Lustgraaf

has a good reputation in the legal community of Council Bluffs and has

performed pro bono work. See Monroe, 784 N.W.2d at 791 (viewing pro

bono work as a mitigating factor); Iversen, 723 N.W.2d at 811

(considering as mitigating factor that respondent was well respected in

legal community). He has no prior record of discipline. See Monroe, 784


lawyer”). We do not know the circumstances that motivated the board to reprimand the
respondent rather than to seek a suspension of his license.
                                    11

N.W.2d at 791 (noting respondent’s prior ethical practice in determining

appropriate sanction); Iversen, 723 N.W.2d at 811 (noting absence of

prior ethical infractions as a mitigating circumstance).

      Because Lustgraaf’s misconduct is qualitatively less severe than

the misconduct of the attorneys in our prior cases dealing with a failure

to file tax returns, we conclude that the imposition of a suspension is not

warranted here.     See generally Iversen, 723 N.W.2d at 810 (noting

sanctions are adapted “to the unique facts of each case”). Nevertheless,

discipline is necessary to deter lawyers from similar misconduct.

Therefore, we concur in the commission’s recommendation that a public

reprimand be issued.

      V. Disposition.

      We publicly reprimand Thomas E. Lustgraaf for his ethical

violations and tax the costs of this proceeding against him.

      ATTORNEY REPRIMANDED.
