Must a South Carolina lawyer who finds tax liens against another lawyer during a title search report it to the grievance board?

Plain-English summary

During a routine title examination, a lawyer discovered that another lawyer or firm had several tax liens for failure to remit employee tax withholdings to the IRS and the state tax commission. The question was whether Rule 8.3(a) required reporting that to the grievance committee.

The committee concluded it did not. Rule 8.3(a) requires reporting only conduct that raises a substantial question as to a lawyer's honesty, trustworthiness, or fitness. Without additional independent knowledge, the mere existence of tax liens does not bear on those qualities, since liens may result from legitimate disputes between a taxpayer and the taxing authority. The committee also drew on the Comment to Rule 8.3, which stresses reporting where the victim is unlikely to discover the offense (here the liens are public record) and cautions against reading the rule so strictly as to make it unenforceable. The committee concluded that discovering tax liens in a routine title search, without knowledge of their background or basis, imposes no duty to report.

Currency note

This opinion was issued in 1995, before the South Carolina Bar's adoption of the 2005 revisions to the Rules of Professional Conduct. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Do tax liens against another lawyer have to be reported?

A: The committee concluded no, absent independent knowledge of their basis, because liens alone do not raise a substantial question about honesty, trustworthiness, or fitness.

Q: Why don't the liens themselves trigger the duty?

A: The committee reasoned tax liens may result from legitimate disputes with the taxing authority, and are public record, so they do not by themselves implicate the reporting rule.

Background and rules framework

The opinion applied Rule 8.3(a), the South Carolina counterpart to Model Rule 8.3, which requires reporting another lawyer's violation only where it raises a substantial question as to honesty, trustworthiness, or fitness, read together with the rule's Comment.

Citations and references

Rules of Professional Conduct:

• South Carolina RPC 8.3(a) / Model Rule 8.3: reporting professional misconduct; substantial-question threshold.

See also

• SC Bar Ethics Op. 95-13: Reporting Misconduct From Hearsay
• SC Bar Ethics Op. 95-07: Reporting and Firm Knowledge

Source

• Landing page: https://www.scbar.org/for-lawyers/quicklinks/legal-resources/ethics-advisory-opinions/ethics-advisory-opinion-95-12/

Original opinion text

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

UPON THE REQUEST OF A MEMBER OF THE SOUTH CAROLINA BAR, THE ETHICS ADVISORY COMMITTEE HAS RENDERED THIS OPINION ON THE ETHICAL PROPRIETY OF THE INQUIRER’S CONTEMPLATED CONDUCT. THIS COMMITTEE HAS NO DISCIPLINARY AUTHORITY. LAWYER DISCIPLINE IS ADMINISTERED SOLELY BY THE SOUTH CAROLINA SUPREME COURT THROUGH ITS COMMISSION ON LAWYER CONDUCT.

Ethics Advisory Opinion 95-12

While conducting a routine title examination attorney (A) became aware that another attorney/firm (B) has several tax liens against him/her/it because of failure to remit employee tax withholdings to the IRS/SC Tax Commission.

Question:
Does Rule 8.3(a) require A to report this conduct of B to the Grievance Committee?

Summary:
Rule 8.3(a) would not require A to report this conduct.

Opinion:
Rule 8.3 (a) requires the reporting of conduct only where a substantial question arises as to lawyers' honesty, trustworthiness, or fitness as a lawyer. Unless A has additional independent knowledge as to this conduct, the mere fact that a lawyer or law firm has tax liens filed against the lawyer/firm does not lead the Committee to conclude that these liens bear upon the lawyer's honesty, trustworthiness, or fitness as a lawyer. Tax liens may be the result of legitimate disputes between the taxpayer and the taxing authority.

Moreover, the Comment to Rule 8.3 indicates that reporting a violation is especially important where the victim is unlikely to discover the offense. In the present case, these matters are of public record. Furthermore, the Comment goes on to indicate that the Rule should not be interpreted so strictly as to render it unenforceable.

The provisions of Rule 8.3 when considered in conjunction with the Comments leads this Committee to conclude that the mere discovery of tax liens against a lawyer/law firm in a routine title search without knowledge as to the background or basis for the liens would not impose any requirement for the reporting of the tax liens to the Grievance Committee.