LEO: Multiple Representation - Representing LE Op. 1091
Multiple Representation - Representing Adverse Parties in
Substantially Related Matter.
June 14, 1988
You advise that you began representing two taxpayers in 1985 who were
formerly married and had filed joint tax returns for the tax years 1981
and 1982. Your representation included the writing of a protest letter to
the Internal Revenue Service and appearance at the appeals level on your
client's behalf. When you were employed by the taxpayers, there did not
appear to be a conflict with your representation of both. The IRS was
basically contesting business expenses and various deductions. However,
since your initial representation, the Internal Revenue Code has been
revised to include a more liberal provision for the "innocent spouse rule."
This rule allows the spouse filing a joint return to escape a liability
under certain circumstances, thereby making the remaining taxpayer solely
liable for the taxes, penalties and interest.
You recently met with the Internal Revenue Service, and an agent
suggested that the more liberalized "innocent spouse rule" may be
applicable to one of your clients. You advise that a successful argument
using the "innocent spouse rule" would resolve one taxpayer of all
You pose the following questions:
1. Whether there is a conflict of interest in representing both taxpayers
and arguing the "innocent spouse rule" for the one spouse;
2. Even if there is a conflict in continuing to represent both taxpayers
and arguing the "innocent spouse rule," whether this disclosure to the
client and consent to further representation is sufficient to continue the
representation of both; and
3. If continued representation of both taxpayers is not permissible,
whether it would be permissible to continue to represent the taxpayer who
is not the beneficiary of the "innocent spouse rule."
The Committee will respond to your questions in the order presented.
DR:5-105(B) states: "A lawyer shall not continue multiple employment
if the exercise of his independent, professional judgment on behalf of a
client will be or is likely to be adversely affected by his representation
of another client, except to the extent permitted under DR:5-105(C)." DR:
5-105(C) states that in situations covered by DR:5-105(A) and (B), a
lawyer may represent multiple clients if it is obvious he can adequately
represent the interests of each and if each consents to the representation
after full disclosure of the possible effect of such representation on the
exercise of his independent, professional judgment on behalf of each.
With regard to your first question, since arguing the "innocent spouse
rule" for one client may adversely affect the other, the Committee opines
that unless disclosure is made to both clients and both clients consent to
the representation, it would be improper for you to continue the multiple
In response to your second question, continued representation of both
would be proper only if disclosure is made to both clients and both
With regard to your last question, DR:5-105(D) states that "A lawyer
who has represented a client in a matter shall not thereafter represent
another person in the same or substantially related matter if the interest
of that person is adverse in any material respect to the interest of the
former client unless the former client consents after disclosure." The
Committee opines that you must obtain the consent of the former client
before proceeding in your representation of the other client.
Committee Opinion June 14, 1988