Can an Ohio criminal defense lawyer disclose a client's identity on IRS Form 8300 when the client pays a cash fee over $10,000?

Plain-English summary

The Board addressed whether a criminal defense attorney could ethically disclose to the IRS, as 26 U.S.C. §6050I required on Form 8300, information revealing the identity of a client who paid a cash fee over $10,000. The Board explained that a lawyer who reports cash retainers and the client's identity without consent risks violating DR 4-101 (the duty to preserve client confidences and secrets) and DR 7-101 (zealous representation with undivided loyalty and the duty to do nothing to damage or prejudice the client). The Board noted that identifying the client on the IRS form could subject the client to further investigation and possible conviction.

The Board recognized the competing pressure: a lawyer who fails to comply with the IRS regulations could face criminal and civil penalties. It observed that the common practice of criminal defense attorneys was to report the cash amounts received while withholding the client's identity until reporting would no longer jeopardize the client. The Board stated that it had no authority to address the constitutional and legal issues surrounding the request, citing Gov. Bar R. V(2)(b).

The Board concluded that DR 4-101(C)(2) would permit a lawyer to file a completed Form 8300 relying on the IRS regulations, but it stressed that "the protection of a client's confidences is so basic a tenet of professional responsibility that it yields only in the rarest of real dilemmas," quoting Butler v. United States. In its view, a lawyer who revealed a client's identity on Form 8300 would violate the duty of confidentiality, and under DR 7-101(A)(3) a lawyer must not intentionally prejudice or damage a client. The Board concluded that a criminal defense attorney must withhold a client's identity if the attorney believes in good faith that disclosure would jeopardize the client. It added that the attorney should inform the client of the IRS filing requirement and the associated risks, advise the client that the information might ultimately be compelled under federal law, and let the client decide what confidential information beyond the cash amounts could be revealed under DR 4-101(C)(1).

Currency note

The Board withdrew this opinion on October 10, 1997, in light of United States v. Ritchie, 15 F.3d 592 (6th Cir. 1994). It issued in 1990 under Ohio's former Code of Professional Responsibility (superseded by the Ohio Rules of Professional Conduct effective February 1, 2007). Subsequent rule amendments, court decisions, or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against the current Ohio Rules of Professional Conduct and current federal law before relying on any specific rule or requirement mentioned here.

Common questions

Q: Did the opinion say a lawyer must file IRS Form 8300 with the client's name?

A: No. The Board concluded that a criminal defense attorney must withhold the client's identity if the attorney believes in good faith that disclosure would jeopardize the client, because revealing the identity would violate the duty of confidentiality under DR 4-101.

Q: Could a lawyer disclose the client's identity if the client agreed?

A: Under this opinion, the client decides what confidential information beyond the cash amounts may be revealed, consistent with DR 4-101(C)(1), which allows revealing confidences and secrets with the client's consent after full disclosure.

Q: What was the lawyer supposed to tell the client?

A: The Board concluded that the attorney should inform the client of the IRS filing requirement and the risks of disclosing the client's identity, and should advise that the information might ultimately be compelled under federal law.

Q: Did the Board resolve the constitutional questions about the reporting requirement?

A: No. The Board stated it had no authority to discuss the constitutional and legal issues surrounding the request, citing Gov. Bar R. V(2)(b).

Background and rules framework

The opinion interprets the former Code of Professional Responsibility: DR 4-101 (preservation of client confidences and secrets, with the exceptions in DR 4-101(C)) and DR 7-101 (zealous representation and the prohibition in DR 7-101(A)(3) against intentionally prejudicing or damaging a client). It applies those rules against the federal cash-transaction reporting requirement of 26 U.S.C. §6050I and IRS Form 8300.

Citations and references

Rules of Professional Responsibility (Ohio, former):

• DR 4-101, preservation of confidences and secrets of a client
• DR 4-101(C), permitted revelations (including client consent and revelation permitted by law)
• DR 7-101, representing a client zealously; DR 7-101(A)(3), not intentionally prejudicing or damaging the client

Statutes:

• 26 U.S.C. §6050I, reporting of cash received in a trade or business (IRS Form 8300)
• Gov. Bar R. V(2)(b), scope of the Board's advisory authority

Cases:

• Butler v. United States, 414 A.2d 844 (D.C. 1980), confidentiality yields only in the rarest of real dilemmas

Other opinions cited:

• Chicago Bar Assn. Op. 88-2 (1988); State Bar of Georgia Op. 41 (1984); District of Columbia Bar Op. 124 (1983); Kentucky Bar Assn. Op. E-253 (1981): client confidentiality extends to IRS reporting
• Arizona Bar Assn. Op. 87-3 (1987): if required by law, the attorney may complete and file the form

See also

• Ohio BPC Op. 1990-007: Confidentiality and Candor When a Client Offers Fabricated Records
• Ohio BPC Op. 1990-001: Duty to Report Another Lawyer's Misconduct and the Privilege Exception
• Ohio BPC Op. 1986-001: Grievance Committee's Duty to Report Crime Discovered in an Investigation
• Ohio BPC Op. 1989-013: Representing a Client Against a Former Client; Imputation and Screening

Source

• Landing page: https://ohioadvop.org/advisory-opinion-index/
• Original PDF: https://www.ohioadvop.org/wp-content/uploads/2017/03/Op-90-004.pdf

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

The Supreme Court of Ohio
BOARD OF COMMISSIONERS ON GRIEVANCES AND DISCIPLINE
41 SOUTH HIGH STREET-SUITE 3370, COLUMBUS, OH 43215-6105
(614) 644-5800 FAX: (614) 644-5804

OFFICE OF SECRETARY

OPINION 90-4
Issued April 20, 1990

[Withdrawn- by Board on October 10, 1997 due to U.S. v. Ritchie, 15 F. 3d 592 (6th Cir. 1994).]

SYLLABUS: An attorney may not reveal the confidences and secrets of a client unless permitted under DR 4-101(C). An attorney whose client pays $10,000 or more in cash must inform the client of the IRS reporting requirement under 26 U.S.C.§60501 and the risks involved. An attorney may not reveal information which may damage or prejudice a client.

OPINION: We have before us your request for an advisory opinion on whether a criminal defense attorney in Ohio may ethically disclose to the Internal Revenue Service, as required by 26 U.S.C. §60501 on Form 8300, information revealing the identity of the client who pays a cash fee in excess of $10,000 in one or more related transactions.

A criminal defense attorney who reports cash retainers and the client's identity without the client's consent, risks violating DR 4-101 and DR 7-101 of the Code of Professional Responsibility. An attorney must preserve the confidence and secrets of a client. Code of Professional Responsibility, DR 4-101. An attorney must also zealously represent a client's interest with undivided loyalty and do nothing to damage or prejudice a client. Code of Professional Responsibility DR7-101. A criminal defense attorney who identifies clients on the IRS form may be subjecting the client to further investigation and the possibility of a conviction.

On the other hand, an attorney who fails to comply with the IRS regulations may be subjected to criminal and civil penalties. The common practice of criminal defense attorneys is to report the cash amounts received and withhold the client's identity until the reporting of such would no longer jeopardize the client. Fricker, Doing Time, 76 A.B.A.J. 24 (1990).

The IRS has sent out hundreds of letters to attorneys withholding clients' identities saying that the information must be disclosed and that enforcement action would be initiated. Id. The vast majority of those attorneys who received the IRS letter have declined on ethical, legal and constitutional grounds to include any information that would identify the client/payor or the circumstances of the payment. Wall Street Journal, Nov. 30, 1989, at B7, col. 1; N.Y. Times, March 9, 1990, at B1, col. 4. This Board has no authority to discuss the constitutional and legal issues enveloping this request. Gov.Bar R. V (2) (b).

The IRS letters were not sent with the advance knowledge or approval of the Department of Justice. The Tax Division of the Department of Justice has assured the National Association of Criminal Defense Lawyers that enforcement proceedings would not be authorized until the issue was thoroughly studied and discussed by the appropriate agencies. Letter from NACDL to Members (Nov. 14, 1989). The Justice Department has, however, initiated actions against two Manhattan law firms for not reporting detailed information about clients who pay their attorneys more than $10,000 in cash. Wall Street Journal, Nov.30, 1989, at B7, Col. 1.

Disciplinary Rule 4-101 prohibits an attorney from revealing confidences and secrets which may be detrimental to the client, unless the client consents after full disclosure. An attorney may reveal the information if permitted under the Disciplinary Rules, if required by law or court order, if the client intends to commit a crime, if the information is necessary to prevent a crime, or if the information is necessary to defend the attorney against accusations of wrongdoing. Code of Professional Responsibility, DR 4-101 (C) (1) (2) (3) (4).

An attorney may file a completed Form 8300 relying on IRS regulations and DR 4-101 (C) (2). However, "the protection of a client's confidences is so basic a tenet of professional responsibility that it yields only in the rarest of real dilemmas." Butler v. U.S., 414 A.2d 844, at 849 (D.C. 1980). The justification for the strict rules on confidentiality is the desirability of complete candor between client and attorney.

Disclosing the client's identity on the IRS form may provide the list link in a chain of incriminating evidence that would lead to the client being charged with a crime. In our opinion, an attorney who reveals a client's identity on IRS Form 8300 would be violating the duty of confidentiality. In addition, DR 7-101 (A) (3) provides that an attorney must not intentionally prejudice or damage a client during the course of the professional relationship. In our view, a criminal defense attorney must withhold a client's identity if the attorney believes in good faith the disclosure would jeopardize the client.

Criminal defense attorneys should inform their clients of the IRS filing requirement and the risks associated with disclosing the client's identity. The attorneys should further advise their clients that they may ultimately be compelled to reveal the information under federal law. The client must decide what confidential information, other than cash amounts, may be revealed. Code of Professional Responsibility, DR 4-101 (C) (1).

Several state bar associations agree that client confidentiality extends to the IRS reporting requirements. Chicago Bar Assn. Op. 88-2 (1988); State Bar of Georgia Op. 41 (1984); District of Columbia Bar Op. 124 (1983); Kentucky Bar Assn. Op. E-253 (1981). Compare, Arizona Bar Assn. Op. 87-3 (1987) (if required by law, the attorney may fill out and file the form).

In conclusion it is our opinion and you are so advised that an attorney may not reveal the confidences or secrets of his or her clients except when permitted or required under DR 4-101(C). An attorney has the responsibility to reveal the IRS reporting requirements to the client who pays $10,000 or more in cash and the inherent risks involved. An attorney should not reveal information gained from a client when the revelation might jeopardize or damage the client.

This is an informal, non-binding advisory opinion based upon the facts presented and limited to questions arising under the Code of Professional Responsibility.