Can a lawyer disclose a client's identity on IRS Form 8300 when paid more than $10,000 in cash, or does confidentiality bar it?

Plain-English summary

The Committee was asked whether a lawyer may disclose a client's identity on IRS Form 8300, which the Internal Revenue Code (section 60501) requires whenever a lawyer receives cash exceeding $10,000, and which calls for the client's identity and the purpose of the payment. The request framed a potential conflict between the lawyer's duty to obey the law and the duty of confidentiality under Rule 1.6(a).

The opinion reached two conclusions. First, disclosing the information on a Form 8300 in accordance with IRC 60501 is not contrary to the Alaska Rules of Professional Conduct. Second, when a lawyer is offered a cash payment over $10,000 for any purpose connected with the practice, the lawyer must explain the reporting requirement to the client so the client has the opportunity to pay without using cash. The opinion identified two settings: payment of the fee in cash, and the lawyer holding cash for a transaction such as a real estate acquisition.

The opinion relied on the federal appellate decisions in United States v. Leventhal and United States v. Goldberger & Dubin, P.C., which rejected attorneys' confidentiality objections to Form 8300 disclosure. While those courts reasoned in part that fee information is not privileged, the Committee did not necessarily accept that fee communications fall outside Rule 1.6(a); it found persuasive the courts' other grounds, that federal law supersedes and that Congress rejected an exception for the legal profession, and noted that because disclosure is triggered only by cash, clients can avoid it by paying another way. The opinion grounded the duty to inform the client in Rule 1.4(b) and Rule 1.2(e).

Currency note

This opinion was issued in 1993, before Alaska's adoption of the 2009 revisions to the Alaska 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 Treat this page as historical context, not current guidance.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: Did confidentiality bar a lawyer from naming the client on Form 8300?

A: No. The opinion concluded that disclosing the information required on Form 8300 under IRC 60501 is not contrary to the Alaska Rules of Professional Conduct.

Q: Did the lawyer have to do anything before accepting a large cash payment?

A: Yes. The opinion concluded that when offered more than $10,000 in cash, the lawyer must explain the reporting requirement to the client so the client can choose to pay without cash.

Q: Did the opinion decide that fee information is never confidential?

A: No. The opinion declined to fully accept that fee communications fall outside Rule 1.6(a), resting instead on the superseding effect of the federal statute and Congress's refusal to exempt lawyers.

Background and rules framework

The opinion interpreted Alaska Rule of Professional Conduct 1.6(a) (Model Rule 1.6, confidentiality) against the federal reporting statute, IRC 60501. It located the duty to inform the client in Rule 1.4(b) (Model Rule 1.4, explaining a matter to the extent reasonably necessary for informed decisions) and Rule 1.2(e) (Model Rule 1.2, explaining limits on the lawyer's conduct when the client expects assistance not permitted by law).

Citations and references

Rules of Professional Conduct:

• Model Rule 1.6 / Alaska RPC 1.6(a) (confidentiality of information)
• Model Rule 1.4 / Alaska RPC 1.4(b) (explaining a matter for informed decisions)
• Model Rule 1.2 / Alaska RPC 1.2(e) (limits on the lawyer's conduct)

Statutes:

• 26 U.S.C. 60501 (IRS Form 8300 cash-reporting requirement)

Cases:

• United States v. Leventhal, 961 F.2d 936 (11th Cir. 1992)
• United States v. Goldberger & Dubin, P.C., 935 F.2d 501 (2d Cir. 1991)

See also

• Alaska Ethics Op. 95-1: Shop Talk and Courtesy Copies Under Rule 1.6
• Alaska Ethics Op. 96-3: Disclosure of Client Files Under Subpoena
• Alaska Ethics Op. 2000-03: Reporting a Client to a Credit Bureau

Source

• Landing page: https://alaskabar.org/ethics-discipline/ethics-opinions/adopted-ethics-opinions-chronological/
• Original PDF: https://alaskabar.org/wp-content/uploads/93-3.pdf

Original opinion text

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

Ethics Opinion No. 93-3
Disclosing Information on IRS Form 8300.
The Committee has been asked to render an opinion on whether, under
the Alaska Rules of Professional Conduct, an attorney can properly disclose the
identity of a client on an IRS Form 8300. Under section 60501 of the Internal
Revenue Code, lawyers are required to complete this form whenever they
receive cash in excess of $10,000 from a client. The form calls for information
concerning the purpose of the payment and specifically requests disclosure of
the client's identity. As the request for an opinion notes, the reporting
requirement presents a potential conflict between an attorney's obligations to
abide by the law and to protect client confidentiality.
The Committee has concluded
(1) that disclosure of information on a Form 8300 in accordance with the
requirements of IRC §60501 is not contrary to the provisions of the Alaska
Rules of Professional Conduct; and
(2) that, under the Alaska Rules of Professional Conduct, when a lawyer
is offered a cash payment of more than $10,000 for any purpose connected
with his or her practice the lawyer is obligated to explain the reporting
requirement imposed by section 60501 to the client in order to provide the
client with an opportunity to make the payment without utilizing cash.
It appears that there are two sets of circumstances under which a lawyer
might receive more than $10,000 in cash from a client. First, the client may
wish to pay his or her fee in cash. Second, the client may wish the lawyer to
hold cash to be utilized in connection with a transaction, such as a real estate
acquisition, in which the lawyer is providing representation.
Both situations are governed by ARPC 1.6(a), which provides, in relevant
part, as follows:
A lawyer shall not reveal information relating to representation of a client unless the
client consents after consultation . . .
Two recent U.S. Court of Appeals decisions have addressed the question of
attorney disclosures on a Form 8300. See, U.S. v. Leventhal, 961 F.2d 936
(11th Cir. 1992); United States v. Goldberger & Dubin, P.C., 935 F.2d 501 (2d
Cir. 1991).
In Leventhal, supra, the government appealed a District Court decision
which approved an attorney's refusal to provide identifying information on the
Form 8300 absent an express judicial order. 961 F.2d at 939. The lawyer
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argued that simple disclosure of the information in the summons would violate
a Florida Bar rule substantially identical to Alaska's Rule 1.6(a). 961 F.2d at
940, note 7. The Eleventh Circuit ruled against the lawyer and followed the
Second Circuit, holding as follows:
In Goldberger [supra], the court first explained that "in actions such as the instant one,
which involve violations of federal law, it is the federal common law of privilege that
applies". . . The court further pointed out that, even if the state law of privilege should
apply, "a communication to an attorney would not be considered confidential unless it
was made in the process of obtaining legal advice; and fee arrangements between
attorney and client do not satisfy this requirement in the usual case . . ." Finally, the
Goldberger court noted that, even if a conversation concerning fees technically might fall
within the scope of the attorney-client privilege, the privilege would yield in the face of
"a federal statute that implicitly precludes its application". . . . The court identified
section 60501 as just such a federal statute, remarking that Congress, in enacting section
60501, had rejected lobbying efforts to exclude the legal profession from that section's
reporting requirements.

We find the Second Circuit's reasoning in persuasive. We have held on numerous
occasions that "[t]he identity of a client or matters involving the receipt of fees from a
client are not normally within the (attorney-client) privilege."
961 F.2d at 940 (emphasis in original, citations omitted). The Eleventh Circuit
appears to have correctly described Goldberger, which also involved the
payment of a cash fee.
As noted above, situations may arise in which a cash payment is made
for reasons unrelated to fee payments. To the extent that Leventhal and
Goldberger hold that communications concerning fees are not privileged, those
portions of the holdings would not be applicable in such a context. The
Committee does not necessarily accept the proposition that communications
regarding fees lie outside the scope of Rule 1.6(a), however. It does find the
other grounds for these holdings (i.e., the superseding effect of federal law and
Congress' rejection of an exception for the legal profession) to be persuasive. In
reaching this conclusion, we note that, inasmuch as section 60501 only
requires disclosure where payments are made in cash, clients can easily avoid
the disclosure through alternative means of payment. See Goldberger, 935 F.2d
at 504 ("To avoid disclosure under 60501, they need only pay counsel in some
other manner than with cash. The choice is theirs. None of the appellants have
advanced a legitimate reason why payment other than in cash cannot be
made.").
The Committee is also aware of the fact that, prior to Goldberger, Bar
Opinions in several other states had held that identifying information sought in
a Form 8300 should only be released under the compulsion of an IRS
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summons or Court order. See, 76 ABA J. 114 (October 1990). As far as we can
tell, none of these rulings took account of the factors discussed by the Eleventh
and Second Circuits, and, in any case, the Committee views the decisions in
Leventhal and Goldberger as constituting persuasive countervailing authority.
In view of the foregoing, it is necessary to discuss the appropriate
response of a lawyer when a client or prospective client tenders a cash payment
in excess of $10,000. In the Annotated Model Rules of Professional Conduct
("Annotated Rules"), the ABA discusses the problem at issue here and states
that "[t]his 'Form 8300' requirement creates a duty on the part of the lawyer to
fully inform clients of these reporting requirements and their effect on
confidentiality considerations." Annotated Rules at 104 (2d ed. 1992). (endnote
1) In the Committee's view this requirement is drawn from the provisions of
Rule 1.4(b), which states that a lawyer must "explain a matter to the extent
reasonably necessary to permit the client to make informed decisions regarding
the representation." Additional support for the requirement is found in Rule
1.2(e), which provides that a lawyer must explain relevant limitations on his or
her conduct when the lawyer "knows that a client expects assistance not
permitted by the rules of professional conduct or other law." (Emphasis added).
Approved by the Alaska Bar Association Ethics Committee on September 2,
1993.
Adopted by the Board of Governors on October 23, 1993.
Endnote #1:
The Commentary in the Annotated Rules describes the holding in Goldberger
without taking any position on the decision's impact on obligations under the
Model Rules.

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