Charlotte attorney faces license suspension and feds’ claim for $380K in back taxes
On his law firm’s website, prominent Charlotte attorney Charles Morgan says he is well known around the state and federal courthouses simply as “Chuck.”
Chuck Morgan appears to have become a household name with the Internal Revenue Service, too.
According to a federal court filing this week, Morgan and his wife have been sued by the U.S. Justice Department over back federal income taxes of almost $332,000. The tax bill dates back as far as 2002 and continues to accrue.
U.S. Treasury Department officials say the veteran criminal defense attorney also owes the government about $44,500 in federal employment taxes, which Morgan withheld from his employees’ paychecks but never paid the government, the complaint alleges.
How Morgan handles other people’s money has likewise drawn the critical eye of the disciplinary arm of the North Carolina State Bar.
This month, the professional overseer of the state’s legal community suspended Morgan’s law license for three years for mishandling his clients’ funds — an order that will go into effect 30 days after it is filed. In his filed response, Morgan acknowledged that the allegations were true.
Some of the misconduct occurred when Morgan already was under a 2018 Wake County Superior Court order banning him from handling clients’ money, according to the bar complaint. In November 2018, a Wake judge found Morgan in contempt of court for not following the order.
Most of the charges before the state bar involve Morgan spending hundreds of dollars several clients each had given him to pay their fines, court fees or other costs for his own uses, the bar complaint shows.
Under the bar order, Morgan can reapply for his license after six months, according to Charlotte attorney Lane Williamson, who represented Morgan at the Sept. 4 hearing in Raleigh.
However, Morgan’s problems with the IRS, which surfaced in Charlotte federal court on Monday, could impact the length of his suspension and possibly lead to further disciplinary action.
Reached by phone Wednesday, Morgan deferred questions to his lawyers.
Morgan’s tax attorney, Howard Levy of Cincinnati, told the Observer that he had received the lawsuit on Wednesday and was reviewing it. He said Morgan and he are “working to resolve the filing” and have reached out to the government “to determine a basis for amicable closure.”
Williamson, while confirming details about the bar disciplinary ruling against his client, declined further comment.
Throughout the almost 20-year dispute over the federal income taxes Morgan and his wife allegedly failed to pay, the meter has been running.
In June 2005, for example, the couple was assessed $67,144 for the 2002 tax year. As of Monday, penalties and interest have pushed the amount of the unpaid tax debt to almost $95,200; a 2005 assessment of $38,328 from the 2003 tax year has ballooned to almost $90,000.
According to the lawsuit, Morgan’s mishandling of his workers’ employment tax withholdings dates back seven years. He was hit with six separate assessments in 2018 totaling more than $42,500 from the 2013, 2016 and 2017 tax years. In their lawsuit, federal officials say Morgan, despite ample warnings from the government, has “failed or refused to pay the full amount due.”
Morgan is a Charlotte native and Independence High graduate who has practiced law for 28 years in North Carolina. At one time, he worked as a public defender and an assistant district attorney. Now, he runs a law practice with his daughter, Molly Morgan, as an associate. She is a criminal defense attorney who has worked cases with her father in state and federal courts.
Morgan’s friends on Facebook include judges, journalists, attorneys and prominent local politicians.
This story was originally published September 23, 2020 at 1:58 PM.
