Ethics Opinions

Opinion No. 94-7

Summary: Where a lawyer has received an IRS administrative summons requiring the lawyer to disclose the identity of clients from whom the lawyer has received cash in excess of $10,000, as well as the amount of each such cash receipt, and where the client has refused to consent to such disclosure, then, if there is any doubt as to whether the law compelling disclosure overrides the lawyer's obligation to preserve the client's confidences or secrets, the lawyer should resist disclosure of the client's identity in response to the summons, or in any subsequent enforcement proceeding, until such time as a court orders disclosure.

Facts: Section 6050I of the Internal Revenue Code obliges individuals to report the receipt of cash in excess of $10,000 by filing IRS Form 8300. Form 8300 requires disclosure of both the amount of the cash received and the identity of the payor. Section 6050I's reporting obligation thus has serious ramifications for lawyers who are paid for their services in cash. At various times a lawyer has filed Forms 8300 detailing cash payments received from a client, but not the client's identity. Subsequently, the lawyer corresponded with the Internal Revenue Service ("IRS") and advised it of the lawyer's view that disclosure of the client's identity would violate the lawyer's obligation to protect his or her client's confidentiality. The lawyer continued to refuse to disclose the client's identity after the lawyer received an administrative summons from the IRS directing production of documents relating to the client's identity.
The lawyer subsequently received notice that the Tax Division of the Department of Justice ("DOJ") intended to file an action to enforce the summons. As a result, the lawyer made inquiry of the client to determine whether the client would consent to the disclosure. The client did not consent. DOJ filed its enforcement action. May a lawyer ethically disclose the identity of his or her client on Form 8300 or in response to the summons absent the client's consent or a court order directing such disclosure?

Discussion: DR 4-101(B)(1) provides that "[e]xcept when permitted under DR 4-101(C), a lawyer shall not knowingly ... [r]eveal a confidence or secret of his client." It is unquestionably the case that a client's identity may be a confidence or secret within the meaning of DR 4-101(A). DR 4-101(C), which details the circumstances under which a lawyer may reveal a confidence or secret, provides in relevant parts:
(c) A lawyer may reveal:
(l) Confidences or secrets with the consent of the client or clients affected, but only after a full disclosure to them.
(2) Confidences or secrets when permitted under Disciplinary Rules or required by law or court order.
In the above scenario, the client has refused to consent to disclosure of his or her identity, with the result that the lawyer may not rely on the exception provided for in DR 4-101(C)(1). Assuming that the client's identity is a confidence or secret, which the lawyer alone can decide, DR 4-101(C)(2) provides that the lawyer may reveal the client's identity if required by law or court order. The Committee's rules do not permit it to advise as to whether, as a matter of substantive law, Section 6050I's disclosure obligations are sufficient to trigger the exception in DR 4-101(C)(2). However, given the client's refusal to consent to disclosure, the Committee believes that, if the lawyer has any doubt about the lawfulness of Section 6050I's disclosure obligations as they impinge on the lawyer's obligations under DR 4-101 (i.e., because there is no decision of the Supreme Court holding that Section 6050I's disclosure obligations override the lawyer's obligations under DR 4-101), the lawyer should continue to resist disclosure of the client's identity, and should require DOJ to obtain a court order mandating disclosure. Should DOJ obtain such an order, the lawyer will have done his or her best to protect the client's confidences, and DR 4-101(C)(2) will permit the lawyer to disclose the client's identity. See, e.g., Florida Bar Professional Ethics Committee Advisory Opinion No. 92-5; Washington State Bar Assn. Opinion No. 189 (1991); State Bar of Georgia Advisory Opinion No. 41 (1984).


Permission to publish granted by the Board of Delegates on July 12, 1994. As stated in the Rules of the Committee on Professional Ethics, this advice is that of a committee without official governmental status
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