An appeal of a federal court’s ruling in a dispute with the IRS has a Hoosier attorney facing sanctions after the 7th Circuit Court of Appeals found he “pressed frivolous arguments” and engaged in conduct contrary to professional standards.
Richard Witkemper and his wife, Ellen, were sued by the IRS for failing to withhold and remit FICA taxes from their employees’ paychecks. After Witkemper failed to comply with a settlement agreement then engaged in a series of property transfers, the matter was adjudicated in a one-day bench trial in favor of the government.
What happened next has drawn the ire of the 7th Circuit Court of Appeals and resulted in an order that the Witkemper’s attorney, Jason Smith, explain why he should not be booted from the appellate court.
The 7th Circuit handily affirmed the ruling from the U.S. District Court for the Southern District of Indiana in United States of America v. Richard E. Witkemper and Ellen R. Witkemper, 21-2029.
However, the appellate court stated it was concerned about how the Witkempers approached their appeal. Namely, they make two arguments – the government cannot prove it assessed penalties in February 2008 and the government had an issue with the timeliness in filing its lawsuit – that seem as if the bench trial never happened.
“What we have seen in this appeal has troubled us,” Judge Michael Scudder wrote for the 7th Circuit. “The Witkempers’ counsel, Jason Smith, has advanced arguments that have ignored the trial evidence and the deferential standard under which we must review the district court’s findings of fact. When the government pointed this out in its opposition brief, Smith never replied – despite seeking an extension of time within which to file a reply brief.
“And making matter worse,” Scudder continued, “in oral argument Smith seemed surprised at the Court’s questions about the trial evidence and standard governing our appellate review.”
Smith is a member of Smith Law Services in Seymour. According to the Indiana Roll of Attorneys, he has had two disciplinary complaints adjudicated against him and has a suspension pending.
On Friday, the Indiana Supreme suspended Smith for 30 days with automatic reinstatement for making false statements against Jackson County Superior Court Judge Bruce MacTavish.
The 7th Circuit noted Smith had engaged in similar conduct in Galloway v. Commissioner of Internal Revenue, 2022 WL 500955 (7th Cir. 2022). There, the attorney pressed arguments not only barred by statute but also where the appellate court lacked the authority to even consider the claims present in the brief.
“…Smith’s performance over these two recent appeals falls well below the standards we expect from lawyers authorized to practice in our Court,” Scudder wrote, citing Sambrano v. Mabus, 663 F.3d 879, 882 (7th Cir. 2011). “Twice in as many months, Smith has pressed frivolous arguments with no realistic prospect of prevailing. And so, too, are we aware that (the Northern Illinois District Court) in this Circuit recently imposed disciplinary sanctions against Smith in an order that did not mince words about his unacceptable performance.”
Invoking Rule 46 of the Federal Rules of Appellate Procedure, the panel noted it has the ability to suspend or disbar a member of the 7th Circuit bar when the attorney is exhibiting conduct that is contrary to the professional standards and shows an unfitness to discharge continuing obligations.
The appellate court gave Smith 21 days to show cause of why he should not be removed or suspended from the bar of the 7th Circuit under Rule 46.