Summary
In Doelker, the Supreme Court held that a certified copy of an accountant's conviction for failing to file a federal income-tax return was insufficient evidence to support discipline under former R.C. 4701.16 because the federal crime did not contain an element of dishonesty or fraud.
Summary of this case from Millard v. Accountancy Bd. of OhioOpinion
No. 40698
Decided December 13, 1967.
Accountants — Revocation of certificate — Causes for — Section 4701.16, Revised Code — Conviction of crime with element of dishonesty or fraud — Failure to make income tax return — Appeal from order of revocation — Evidence warranting affirmance of order — Section 119.12, Revised Code.
1. A conviction under Section 7203, Title 26, U.S. Code, for willfully failing to make an income tax return, where such return is required by law, does not represent, within the meaning of Section 4701.16 (F), Revised Code, conviction of a "crime, an element of which is dishonesty or fraud."
2. On an appeal from an order of an agency revoking a license, the Common Pleas Court may affirm that order only "if it finds, upon consideration of the entire record and such additional evidence as the court has admitted, that the order is supported by reliable, probative, and substantial evidence and is in accordance with law"; and this means that such evidence must not only exist but must be in the record in order to support an affirmance. (Section 119.12, Revised Code, construed.)
APPEAL from the Court of Appeals for Cuyahoga County.
This proceeding originated with a letter of notice dated May 14, 1964, to Mrs. Doelker from the president and the executive director of the accountancy board notifying her that she could request a hearing within 30 days "to determine whether or not" her "certificate to practice as a certified public accountant * * * should be suspended or revoked in accordance with the authority vested in the * * * board * * * under Section 4701.16 (D) for violation of Rule 2 of the Rules of Professional Conduct promulgated by the board and Section 4701.16 (F) for the conviction of a crime under the laws of the United States, an element of which is dishonesty or fraud," i. e., "willful failure to file" a personal income tax return for the year 1955 "in violation of Section 7203 of the Internal Revenue Code of 1954."
So far as pertinent, Section 4701.16, Revised Code, reads:
"After notice and hearing as provided in Sections 119.01 to 119.13, inclusive, of the Revised Code, the accountancy board may revoke, or suspend, any certificate issued under Section 4701.06 of the Revised Code, or any registration granted under Section 4701.07 of the Revised Code, or may revoke, suspend, or refuse to renew any permit issued under Section 4701.10 of the Revised Code, or may censure the holder of any such permit, for any one or any combination of the following causes:
"* * *
"(D) Violation of a rule of professional conduct promulgated by the board under the authority granted by Sections 4701.02 to 4701.19, inclusive, of the Revised Code;
"* * *
"(F) Conviction of any crime, an element of which is dishonesty or fraud, under the laws of any state or of the United States * * *."
Rule 2 promulgated by the board reads:
"A certified public accountant * * * shall not commit an act discreditable to the profession."
Section 7203, Title 26, U.S. Code, reads, so far as pertinent:
"Any person required under this title * * * to make a return * * * who willfully fails to * * * make such return * * * shall * * * be guilty of a misdemeanor * * *."
After a hearing requested by Mrs. Doelker under the Administrative Procedure Act (Chapter 119, Revised Code), the board made an order that "the certificate to practice as a certified public accountant * * * dated * * * 1941, issued to" Mrs. Doelker "be revoked * * * effective on * * * receipt of this decision."
Thereafter, Mrs. Doelker duly appealed from that order to the Common Pleas Court of Cuyahoga County pursuant to Section 119.12, Revised Code, which reads, in part:
"The court may affirm the order of the agency complained of in the appeal if it finds, upon consideration of the entire record and such additional evidence as the court has admitted, that the order is supported by reliable, probative, and substantial evidence and is in accordance with law. In the absence of such a finding, it may reverse, vacate, or modify the order or make such other ruling as is supported by reliable, probative, and substantial evidence and is in accordance with law. The judgment of the court shall be final and conclusive unless reversed, vacated, or modified on appeal. Such appeals may be taken either by the party or the agency and shall proceed as in the case of appeals in civil actions as provided in Sections 2505.01 to 2505.45, inclusive, of the Revised Code. * * *"
No evidence was offered in the Common Pleas Court in addition to that contained in the record as certified to the court by the board.
The judgment of the Common Pleas Court sustained the order of the Board of Accountancy.
On appeal from that judgment, the Court of Appeals rendered final judgment for Mrs. Doelker "for the reason that the order of the accountancy board * * * is not supported by reliable, probative and substantial evidence."
The cause is now before this court on appeal from the judgment of the Court of Appeals pursuant to the allowance of a motion to certify the record.
Messrs. Topper Alloway and Mr. R. Brooke Alloway, for appellee.
Mr. William B. Saxbe, attorney general, Miss Winifred A. Dunton and Mr. Edward F. Pelteson, for appellant.
Section 4701.16 (F) specifies, as a basis for the action taken by the accountancy board in the instant case, "conviction of any crime, an element of which is dishonesty or fraud." In our opinion, this statutory language would only include a crime where "dishonesty or fraud" is an essential element of the crime, i.e., an element which would have to be proved in order to support a conviction.
The words of Section 7203, Title 26, U.S. Code, do not indicate that "dishonesty or fraud" is an essential element of the crime of willfully failing to make a return, which is the only crime charged against Mrs. Doelker and the only crime for which she was convicted. Under the words of the statute, she could have been convicted of that crime even though she would have had no income tax liability if she had filed a return. We may take judicial notice of the fact that, to use the language of Section 7203, Title 26, U.S. Code, one "required * * * to make a return" ( i. e., one having more than $600 gross income) may have no tax liability at all. It is obvious, therefore, that there is no element of "dishonesty or fraud" necessarily involved in the crime for which Mrs. Doelker was convicted unless something is read into the statute which is not there. Spies v. United States (1943), 317 U.S. 492, 87 L. Ed. 418; Lumetta v. United States (1966), 362 F.2d 644. But, see United States v. Murdock (1933), 290 U.S. 389, 78 L. Ed. 380; United States v. Vitiello (1966), 363 F.2d 240.
Therefore, we conclude that a conviction under Section 7203, Title 26, U.S. Code, for willfully failing to make an income tax return, where such return is required by law, does not represent, within the meaning of Section 4701.16 (F), Revised Code, conviction of a "crime, an element of which is dishonesty or fraud." State, ex rel. Atkins, v. Missouri State Board of Accountancy (Mo.App. 1961), 351 S.W.2d 483. But, see contra Murrill v. State Board of Accountancy (1950), 97 Cal.App.2d 709, 218 P.2d 569 (distinguishable from the instant case, however, since the willful failure was not to file but to supply information and not on his own return but rather on returns made by defendant on behalf of certain of his clients).
The only other basis suggested for the board's decision is Section 4701.16 (D), Revised Code, providing as a ground for revocation of the license of a certified public accountant the "violation of a rule of professional conduct promulgated by the board." The only suggestion of any such violation is a claimed violation of Rule 2 providing that "a certified public accountant * * * shall not commit an act discreditable to the profession."
Although Mrs. Doelker may have done something that would represent commission of "an act discreditable to the profession," the record fails to disclose this. The only evidence offered against her in the record is a certified copy of her conviction under Section 7203, Title 26, U.S. Code, for willfully failing to file a federal income tax return that she should have filed in the year 1955. There is nothing in the record to indicate that her conduct was reprehensible because of repeated failures to file such returns when they should have been filed, as in Cleveland Bar Association v. Bilinski (1964), 177 Ohio St. 43, 201 N.E.2d 878; Dayton Bar Association v. Prear (1964), 175 Ohio St. 543, 196 N.E.2d 773; and State v. Brunge (1963), 20 Wis.2d 493, 122 N.W.2d 369, or because of any effort to conceal her liability for payment of income taxes as in Rheb v. Bar Association of Baltimore City (1946), 186 Md. 200, 204, 46 A.2d 289. Although the record does indicate that Mrs. Doelker acquiesced in "all members of the board" having "seen the various briefs that were filed in the [federal] Court of Appeals" and that she apparently agreed that "they set forth the facts quite clearly," there are no copies of those briefs in the record that was certified by the board to the Common Pleas Court.
The opinion of the federal Court of Appeals is reported in United States v. Doelker, 327 F.2d 343. It indicates that evidence was probably presented at Mrs. Doelker's trial which, if it had been presented in this proceeding, might have supported disciplinary action against her by the accountancy board.
However, Section 119.12, Revised Code, authorizes a Common Pleas Court, on an appeal from an order of an agency revoking a license, to affirm that order of the agency only "if it finds, upon consideration of the entire record and such additional evidence as the court has admitted, that the order is supported by reliable, probative, and substantial evidence and is in accordance with law." This means that such evidence must not only exist but must be in the record in order to support an affirmance. Arcaro Bros. Builders, Inc., v. Zoning Board of Appeals (1966), 7 Ohio St.2d 32, 33, 218 N.E.2d 179.
We must, therefore, agree with the conclusion of the Court of Appeals. Because of this, it is not necessary for us to consider whether the accountancy board had any right to appeal from the judgment of the Court of Appeals.
Judgment affirmed.
HERBERT, SCHNEIDER and BROWN, JJ., concur.
ZIMMERMAN, MATTHIAS and O'NEILL, JJ., dissent.