State Bar of Arizona Ethics Opinions
87-26: Misconduct; Reporting Misconduct
Ethical responsibility of a lawyer who has knowledge of another lawyers failure to file income tax return.
The inquiring lawyer represents parties in a lawsuit in which the opposing party is a lawyer admitted to practice in Arizona. In response to deposition questioning relating to a lost earnings claim, the lawyer testified that, since entering practice, he had never filed state or federal income tax returns.
Does a lawyer who knows of another lawyer's failure to file an income tax return have an ethical duty to inform the appropriate professional authority of this information?
ETHICAL RULES INVOLVED
ER 8.3. Reporting Professional Misconduct
(a) A lawyer having knowledge that another lawyer has committed a violation of the Rules of professional Conduct that raises a substantial question as to that lawyer's honesty, trustworthiness or fitness as a lawyer in other respects, shall inform the appropriate professional authority.
ER 8.4. Misconduct
It is a professional misconduct for a lawyer to:
(b) commit a criminal act that reflects adversely on the lawyer's honesty, trustworthiness or fitness as a lawyer in other respects;
ER 8.4(b) states that commission of "a criminal act that reflects adversely on the lawyer's honesty, trustworthiness or fitness as a lawyer in other respects" constitutes professional misconduct. In view of the presence of similar (and, indeed, partially identical) language in ER 8.3(a), it is clear that another lawyer who has knowledge of the commission of this type of criminal act is ethically obligated to inform the appropriate professional authority. The Comment to ER 8.4 specifically mentions, as an example of the type of illegal conduct that reflects adversely on a lawyer's fitness to practice law, "willful failure to file an income tax return."
Based on the foregoing, it is the opinion of the committee that a lawyer who has knowledge of another lawyer's failure to file an income tax return has the ethical duty to inform the appropriate professional authority of this information, unless, based on facts known to the lawyer, he or she is convinced that such failure was not willful within the meaning of the applicable criminal statutes and does not otherwise reflect on the other lawyer's honest, trustworthiness or fitness as a lawyer in other respects. In light of the specific reference in the Comment to ER 8.4 to a “willful failure to file an income tax return," and the importance to the integrity of the profession of the self-policing aspects of the Rules of Professional Conduct, the committee considers it appropriate to note that the exception contained in the preceding sentence is intended to be very narrow. In this regard, although the committee's jurisdiction does not extend to questions solely of law, the committee considers it appropriate also to note that where (as is suggested by the facts presented by the inquiring lawyer) there are multiple failures to file income tax returns, it would require an extremely unusual set of facts for a lawyer to become convinced, for the purposes of this opinion, that the information should not be reported.
This opinion does not address situations in which the lawyer who obtains such information does so in connection with a client-lawyer relationship between that lawyer and the other lawyer.
Formal opinions of the Committee on the Rules of Professional Conduct are advisory in nature only and are not binding in any disciplinary or other legal proceeding. This opinion is based on the Ethical Rules in effect on the date the opinion was published. If the rules change, a different conclusion may be appropriate.
© State Bar of Arizona 1987