Does a lawyer have to report a client's past tax-law violations the lawyer learned about while representing the client?

Plain-English summary

An Illinois lawyer, retained by a European citizen (a U.S. legal resident) to handle his U.S. business interests, learned that the client and the client's parents may have violated U.S. and European tax laws. The client asked the lawyer to keep his financial affairs confidential. The inquiry asked whether the lawyer had any duty to disclose the possible violations to government authorities.

The opinion concluded that the information was protected. Where it qualifies as privileged, it is covered by the attorney-client evidentiary privilege and by the lawyer's Rule 1.6 duty of confidentiality, so the lawyer may neither disclose it voluntarily nor be compelled to disclose it, citing In re Marriage of Decker. Where the information is not privileged (for example, because disclosed in the presence of third parties), it still qualifies as a "secret" under Rule 1.6, and the lawyer may not voluntarily disclose it; but the lawyer would have to disclose it if required by law or court order.

The opinion concluded that the crime-fraud exception did not apply on these facts, because nothing indicated the client sought or used the lawyer's services to further a fraud or had declared an intention to violate the law in the future. It concluded that mere possession of the information neither requires nor permits voluntary disclosure, but that the lawyer must avoid making false representations on the client's behalf in future matters, which could expose the lawyer to discipline under Rules 8.4, 4.1, and 3.3 and to a civil fraud claim. As to the parents, the opinion concluded that if they were not clients and their conduct was separate from the client's, the lawyer owed them no confidentiality duty but still had no duty to report, noting that misprision of a felony requires an affirmative act of concealment, not mere silence.

Currency note

This opinion was issued in 1994, before Illinois adopted the 2010 Illinois Rules of Professional Conduct. The ISBA Board of Governors affirmed the opinion in May 2010 as generally consistent with the 2010 Rules (referring to Rules 1.6, 4.1, and 8.4), while noting the specific standards referenced may differ from the 2010 Rules. 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 Treat this page as historical context, not current guidance.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 or requirement mentioned here.

Common questions

Q: Must a lawyer report a client's past tax violations learned during the representation?

A: The opinion concluded the lawyer has no duty to report and may not voluntarily disclose privileged or "secret" information about past violations without the client's consent under Rule 1.6.

Q: Does it matter whether the information is privileged or merely a "secret"?

A: The opinion concluded both are protected from voluntary disclosure, but privileged information also cannot be compelled, while a non-privileged "secret" must be disclosed if required by law or court order.

Q: What about the client's parents, who are not clients?

A: The opinion concluded that if the parents were not clients and their conduct was separate from the client's, the lawyer owed them no confidentiality duty but still had no duty to disclose; misprision of a felony requires an affirmative act of concealment, not silence.

Q: Does the lawyer's continued representation create any risk?

A: The opinion concluded the lawyer must avoid future false representations on the client's behalf, which could trigger discipline under Rules 8.4, 4.1, and 3.3 and a civil fraud claim.

Background and rules framework

The opinion interpreted Rule 1.6 (confidentiality of information, covering both privileged matter and non-privileged client "secrets," and the crime-fraud and future-crime exceptions; Model Rule 1.6), together with Rule 4.1 (truthfulness to others), Rule 3.3 (candor to a tribunal), and Rule 8.4 (misconduct) as limits on the lawyer's future conduct (Model Rules 4.1, 3.3, 8.4).

Citations and references

Rules of Professional Conduct:

• Model Rule 1.6 (confidentiality of information) / Illinois Rule 1.6
• Model Rule 4.1 (truthfulness in statements to others) / Illinois Rule 4.1
• Model Rule 8.4 (misconduct) / Illinois Rule 8.4

Cases:

• In re Marriage of Decker, 153 Ill. 2d 298, 606 N.E.2d 1094 (1992), privilege, secrets, and the crime-fraud exception
• In re Masters, 91 Ill. 2d 413, 438 N.E.2d 187 (1982), misprision requires an affirmative act of concealment

Other opinions cited:

• ISBA Opinion 88-13: no duty to reveal "secret" but non-privileged incriminating information
• CBA Opinion No. 86-4; ABA Informal Opinion No. 92-366

See also

• ISBA Ethics Op. 20-05: Obligations When a Lawyer Learns of Client Fraud in a Nonlitigation Matter
• ISBA Ethics Op. 12-08: Duty to Disclose Confidential Information Provided by a Client
• ISBA Ethics Op. 17-01: Disclosure of Client Confidential Information to Prevent Harm

Source

• Landing page: https://www.isba.org/ethics/opinions/9316