Legal Malpractice Forum
| Publication year | 1982 |
| Pages | 939 |
| Citation | Vol. 11 No. 4 Pg. 939 |
1982, April, Pg. 939. Legal Malpractice Forum
When in the course of representing a client, the general practitioner discovers what appears to be tax fraud on the part of his client, he confronts a serious and confusing ethical dilemma. Three classes of circumstances are identified here in which the dilemma is faced and this column attempts to illustrate briefly the problems and suggests approaches to resolutions.
Without qualification, counsel has a duty to advise and admonish the client concerning any suspected fraud or wrongdoing. This duty arises jointly from the obligation to serve the interests of the client(fn1) and the obligation to society.(fn2) Because counsel may be uncertain of the seriousness of the client's situation and may be unfamiliar with the more arcane tax considerations involved, the wisest admonishment is to seek the advice of a tax specialist. Of course, counsel does not have to be an expert to warn the client against a continuation of the fraudulent acts, and this should be done strongly, and in writing, to forestall the possibility of a later claim by the client that he acted with the condonation or even the assistance of counsel. The duty to admonish, then, applies in every case of this nature and would be the attorney's first consideration in each of the following distinguishable fact situations.
Example: the client has been charged with a DUI and has retained counsel to defend him. During an office conference he mentions that, in addition to his regular job, he occasionally cuts and sells a load of firewood to supplement his income. He gives counsel a conspiratorial wink and says, "It's all strictly on a cash basis; what Uncle Sam doesn't know won't hurt him."
While counsel is not asked to assist or further the fraud, the knowledge that is gained contains the strong implication that future instances of the wrongdoing are contemplated by the client. The first relevant ethical consideration, then, is counsel's duty to prevent an intended criminal act if it is within his power to do
The more carefully reasoned approach comes to the opposite conclusion by creating a distinction between the future intended crime and a continuing...
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