Multistate Professional Responsibility Examination (MPRE)Client ConfidentialityMedium
An attorney represents a client who is being investigated for tax fraud. During a confidential meeting, the client admits to the attorney that they have substantially underreported their income for the past five years and provides documents supporting this admission. The attorney advises the client on the potential legal consequences and available options. The client subsequently decides not to amend their past tax returns or disclose the fraud. Which of the following actions is the attorney ethically permitted to take regarding this information?
- AWithdraw from representation if the client insists on a course of action that the attorney reasonably believes is criminal or fraudulent.
- BReveal the client's past fraud to a third party to gain leverage in a separate civil negotiation.
- CDisclose the client's past tax fraud to the IRS to prevent further criminal activity.
- DThreaten to report the client to the authorities if they do not amend their tax returns.
Show answer & explanationAnswer & explanation
Correct answer: A. Withdraw from representation if the client insists on a course of action that the attorney reasonably believes is criminal or fraudulent.
An attorney's duty of confidentiality generally extends to past acts of a client. However, an attorney cannot assist a client in committing a crime or fraud. If a client insists on a course of action that the attorney reasonably believes is criminal or fraudulent, the attorney must withdraw from representation.
Why the other options are wrong
- B. Using confidential information for leverage in unrelated matters without the client's informed consent is a breach of confidentiality and loyalty.
- C. Disclosing past fraud to the IRS without client consent violates the duty of confidentiality, as the fraud is a past act and not a future crime or act designed to cause substantial harm.
- D. Threatening to report a client violates the duty of loyalty and confidentiality and could be construed as coercion, which is unethical.
Client's Past Fraud
Information about a client's past fraudulent activities remains confidential, but an attorney cannot assist in ongoing or future fraud.
- Confidentiality applies to past acts.
- Attorney cannot assist in crime/fraud.
- Withdrawal is an appropriate response to client's insistence on fraudulent conduct.
Memory trick: Past fraud stays quiet, but future fraud means I'm out.