Can a Tennessee lawyer give client information to an outside accountant or computer tax service hired to help prepare the client's tax return?

Currency note

This opinion was issued in 1982, before Tennessee's adoption of the 2003 Rules of Professional Conduct, which replaced the former Code of Professional Responsibility. 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 Treat this page as historical context, not current guidance.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.

Plain-English summary

An attorney retained by clients to help prepare their personal income tax returns asked about giving client-provided information to accountants or computer tax services the attorney retained to assist with that preparation, where both the computer service and the accountant recognized the confidential nature of the information and agreed to respect it.

The opinion explained that DR 4-101 requires attorneys to preserve client confidences and secrets, and that DR 4-101(D) recognizes that a lawyer uses other persons, such as employees and associates, to provide legal services and requires that reasonable care be exercised by those persons to protect the attorney-client privilege; no privileged information may be revealed through such a person absent informed consent and waiver by the client, subject to the other exceptions in DR 4-101(C).

Applying that framework, the opinion held that an attorney may use an accountant or computer tax service to prepare an individual's tax return only if the attorney, recognizing that the resulting records may be subject to an IRS subpoena, obtains the client's informed consent after advising the client that doing so may waive the attorney-client privilege.

Common questions

Q: Can a lawyer send client tax information to an outside accountant to prepare a return?

A: Only with informed consent. The opinion holds "an attorney may utilize the services of an accountant and/or computer tax service in preparing the individual tax return only in the event that the attorney, realizing that such records may be subject to an IRS subpoena, has the informed consent of the client and has advised the client that this action may involve a waiver of the attorney-client privilege."

Q: Does it matter that the accountant or tax service agrees to keep the information confidential?

A: Not by itself. Even where "both the computer service and the accountant recognize the confidential nature of the information provided to them and agree to respect this confidentiality," the opinion still conditions use of the outside service on the client's informed consent to the privilege-waiver risk.

Background and rules framework

The opinion applied Disciplinary Rule 4-101 and DR 4-101(D) of the Tennessee Code of Professional Responsibility, governing preservation of client confidences and secrets when a lawyer uses the services of others to help provide legal services. The modern correlate is Model Rule 1.6 (confidentiality of information), noted here as a navigational cross-reference rather than a rule the opinion itself applied.

Citations and references

Rules of Professional Conduct:

• DR 4-101 and DR 4-101(D) (preservation of confidences and secrets), Tennessee Code of Professional Responsibility
• Model Rule 1.6 (confidentiality of information), modern correlate

See also

No sibling opinions yet indexed.

Source

• Landing page: https://www.tbpr.org/ethic_opinions/82-f-35

Original opinion text

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

82-F-35 - Client Information Tax Preparation

BOARD OF PROFESSIONAL RESPONSIBILITY OF THE SUPREME COURT OF TENNESSEE

FORMAL ETHICS OPINION 82-F-35

Inquiry is made as to the propriety of giving information provided by clients to accountants and/or computer tax services retained by the attorney to assist in the preparation of clients' tax returns.

The attorney is retained by clients to assist in the preparation of personal income tax returns. The attorney utilizes the assistance of an accountant and/or a computer tax service in this preparation. Both the computer service and the accountant recognize the confidential nature of the information provided to them and agree to respect this confidentiality.

DR 4-101 requires the attorneys to preserve the confidences and secrets of clients. DR 4-101(D) recognizes that a lawyer uses the services of persons in addition to himself to provide legal service and provides that reasonable care shall be exercised by employees, associates and others to protect the attorney-client privilege and, further, that no privileged information may be revealed through an employee in the absence of informed consent and waiver by the client or the other exceptions contained in DR 4-101(C).

An attorney may utilize the services of an accountant and/or computer tax service in preparing the individual tax return only in the event that the attorney, realizing that such records may be subject to an IRS subpoena, has the informed consent of the client and has advised the client that this action may involve a waiver of the attorney-client privilege.

This 18th day of October , 1982.

ETHICS COMMITTEE:

John T. Henniss

Jackson C. Raulston

G. Wilson Horde

APPROVED AND ADOPTED BY THE BOARD