SAN FRANCISCO – Attorney James Patrick Klier, who practices in San Francisco, was suspended on March 19 from practicing law for 90 days and placed on probation for two years after he stipulated to failing to file tax returns for 11 years, based on a total of $1.3 million in earnings.
“The State Bar Court judge determined that because Klier was a tax attorney and partner in a tax practice, his intentional misconduct amounted to moral turpitude,” the discipline report from California Lawyer said.
The report explained that Klier committed multiple acts of intentional misconduct. Prior to this order, Klier practiced law for 20 years, discipline-free, before the misconduct began.
“(Klier) helped save the State Bar time and resources by entering a stipulation, and also cooperated with authorities in the criminal investigation of the matter,” the report said. “In addition, he presented evidence of extensive pro bono service and writings and lectures on tax matters—though credit for this was tempered by the fact they occurred contemporaneously with his own failure to pay taxes.”
On May 1, 2013, Klier pled guilty to two counts of failing to file income tax returns. According to his plea agreement, Klier was a practicing tax attorney focusing on federal and state tax controversies. From 1999 through 2005, Klier was a partner at Preston, Gates and Ellis LLP. From 2005 through 2010, Klier worked at Reed Smith LLP. During those years from 1999 through and including 2010, Klier failed to report any income he earned, court documents state.
According to court documents, for 2008, 2009 and 2010, Klier earned $624,923, $476,088 and $200,734, respectively. He was required by law to file an income tax return with the IRS and did willfully fail to do so, documents state. He agreed to pay past-due taxes to the government in the total amount of $650,993 for 2003, 2008, 2009 and 2010.
“Our tax system is vital to this country and our communities, funding programs and services like roads, water, education, and agriculture, accessed and needed by millions of people every day,” Northern California-based U.S. Attorney Melinda Haag said in a statement. “The defendant, a tax attorney, should and did know that he is required to file tax returns and pay taxes. This office will continue to work with the IRS to ensure that each person pays his or her fair share.”
The maximum statutory penalty for each count failure to file a tax return is one-year imprisonment and a fine of $100,000.
“However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence,” the court documents said.
Klier has lectured at Golden Gate University in San Francisco and was a regular lecturer on criminal tax law at UC Hastings College of the Law. He was the chairman of local and national bar associations for his tax expertise. He previously chaired a task force for the American Bar Association’s Section of Taxation, along with the San Francisco Bar Association’s Barristers Club Tax Section, according to publisher Bloomberg BNA, where Klier is listed as an author.
In 2009, he also earned a spot on California’s list of the top 250 delinquent taxpayers.