When a client pays a cash fee over $10,000, must a lawyer disclose the client's identity to the IRS on Form 8300?

Plain-English summary

Opinion E-90-3 asked whether a lawyer should disclose to the Internal Revenue Service, as required by 26 U.S.C. section 6050I on Form 8300, information revealing the identity of a client who pays a cash fee in excess of $10,000. The committee concluded that a lawyer shall not disclose the identity of a client or information concerning fees paid without the informed consent of the client, citing SCR 20:1.6(a) and Wis. Stat. section 905.03. Before accepting a fee of more than $10,000 in cash, a lawyer should consult with the client about the lawyer's duties under 26 U.S.C. section 6050I(b)(2) to file a Form 8300 and the risks and implications of omitting the information requested on that form, citing SCR 20:1.4(b).

The committee noted that it is professional misconduct under SCR 20:8.4(b) to commit a criminal act reflecting adversely on the lawyer's honesty, trustworthiness, or fitness, and under SCR 20:1.2(d) to counsel or assist a client in conduct the lawyer knows is criminal or fraudulent, but it expressed no opinion on whether filing an incomplete Form 8300 would itself violate the law. To give Wisconsin lawyers more detailed guidance, the committee adopted as informative a lengthy portion of Formal Opinion 89-1 of the Ethics Advisory Committee of the National Association of Criminal Defense Lawyers. That guidance describes asserting the attorney-client, Fifth, and Sixth Amendment privileges where they are not clearly inapplicable, leaving the disclosure decision to the client after full consultation, filing the Form 8300 with the rest of the information but substituting an assertion of privilege for the client's identifying details, declining to volunteer the identity in response to an IRS incompleteness letter without the client's consent, and resisting any IRS summons through judicial enforcement and appeal, citing cases including Gravel v. United States and Cobbledick v. United States.

Currency note

This opinion was issued in 1990, before Wisconsin's July 1, 2007 adoption of the revised Rules of Professional Conduct for Attorneys (the state's Ethics 2000 update). 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 Treat this page as historical context, not current guidance.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: Can a lawyer reveal a cash-paying client's identity to the IRS without asking the client?

A: No. The committee concluded a lawyer shall not disclose the client's identity or fee information without the client's informed consent, citing SCR 20:1.6(a) and Wis. Stat. 905.03.

Q: What must the lawyer do before taking a large cash fee?

A: Consult the client. The committee concluded that before accepting a cash fee over $10,000 the lawyer should consult the client about the Form 8300 filing duty under 26 U.S.C. 6050I and the risks and implications of omitting the requested information, citing SCR 20:1.4(b).

Q: Whose decision is it whether the client's identity is disclosed?

A: The client's. Adopting NACDL Formal Opinion 89-1, the committee concluded that after full consultation the client decides, and that if the client refuses, the lawyer files the Form 8300 with the other required information while asserting privilege in place of the client's identifying details.

Background and rules framework

The opinion interpreted SCR 20:1.6 / Model Rule 1.6 (confidentiality), SCR 20:1.4 / Model Rule 1.4 (communication and consultation), SCR 20:1.2 / Model Rule 1.2(d) (no assisting crime or fraud), and SCR 20:8.4 / Model Rule 8.4(b) (criminal acts reflecting on fitness), applied to the federal cash-reporting requirement of 26 U.S.C. 6050I. It read the Wisconsin confidentiality rule alongside Wis. Stat. section 905.03 and adopted NACDL Formal Opinion 89-1 for detailed guidance.

Citations and references

Rules of Professional Conduct:

• Wis. SCR 20:1.6 / Model Rule 1.6 (confidentiality)
• Wis. SCR 20:1.4 / Model Rule 1.4 (communication; consultation)
• Wis. SCR 20:1.2 / Model Rule 1.2(d) (no assisting crime or fraud)
• Wis. SCR 20:8.4 / Model Rule 8.4(b) (criminal acts)

Statutes:

• 26 U.S.C. section 6050I (cash transaction reporting; Form 8300)
• Wis. Stat. section 905.03 (lawyer-client privilege)

Cases:

• Gravel v. United States, 408 U.S. 606 (1972)
• Cobbledick v. United States, 309 U.S. 323 (1940), contempt as route to appellate review

Other opinions cited:

• NACDL Ethics Advisory Committee Formal Op. 89-1 (adopted as informative)

See also

• WI Ethics Op. EF-17-02: Client Identity Is Confidential
• WI Ethics Op. E-92-5: Corporation Counsel in Support Cases

Source

• Landing page: https://www.wisbar.org/formembers/ethics/pages/formal-opinions.aspx
• Original PDF: https://www.wisbar.org/formembers/ethics/Ethics%20Opinions/E-90-3.pdf