By pleading guilty to misdemeanors Thursday, Vicksburg attorney Marshall Sanders avoided trial and a possible felony conviction for failing to file federal income tax returns, but must pay amounts owed.

According to documents filed with the U.S. District Court, Sanders failed to file returns for 2001 and 2002, despite having grossed more than $2.3 million in 2001 and nearly $500,000 in 2002. Sanders, as part of the plea, agreed to pay taxes due for years 2000 through 2002.

Part of his deal with the federal prosecutors also involves cooperating with the Internal Revenue Service to determine his correct tax liability from 1995 to the present — Sanders had not filed a return since 1994 — and to file complete and accurate tax returns for those years.

He will also be sentenced on the misdemeanor pleas and faces a maximum sentence of up to two years in prison, supervised release up to two years and up to $200,000 in fines, plus costs of prosecution. A sentencing date will be set by U.S. Magistrate James C. Sumner. A felony conviction on each count could have resulted in a 15-year prison term.

The amounts he is to pay were not made public.

In May, Sanders was indicted on three counts of income tax evasion for 2000 through 2003. It alleged Sanders, a solo practitioner, used his attorney escrow account to hold and dispense his personal income. Those accounts are typically used for client funds, real estate closings and other matters.

If Sanders meets all of the conditions in the plea, the government will dismiss the indictment at sentencing. The deal came after a trial date in U.S. District Court was averted by a defense motion entered Monday.

“We asked that they do that,” said Sanders’ Jackson-based attorney, Frank W. Trapp, after Thursday’s hearing. “Mr. Sanders had been cooperative from the start. They graciously agreed.”

Under Rule 6 of the Rules of Discipline for the Mississippi State Bar, which licenses attorneys to practice, any attorney subject to the disciplinary jurisdiction of the state Supreme Court who is convicted or pleads guilty of a felony besides manslaughter or any misdemeanor involving fraud, dishonesty, misrepresentation, deceit, or willful failure to account for a client’s money or property results in a copy of the judgment being forwarded to the state’s high court.

While unable to comment specifically on the case, Mississippi Bar general counsel Adam Kilgore said attorneys convicted of misdemeanors can face disciplinary action from the bar.

Sanders, free on a $10,000 bond, has practiced mostly civil law since 1977. He holds an economics degree from Harvard University and a law degree from Emory University.

“All taxpayers — regardless of profession — must comply with their federal tax obligations,” Nathan J. Hochman, assistant attorney general of the Justice Department’s Tax Division, said in a statement. “As is evident from Mr. Sanders’ guilty plea, failing to do so simply postpones the eventual need to comply at an even higher cost, including federal criminal prosecution and having to pay back taxes with interest and steep penalties.”

Tax Division trial attorneys Kevin C. Lombardi and Michelle M. Petersen handled the prosecution.

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Contact Danny Barrett Jr. at dbarrett@vicksburgpost.com.