UPON THE REQUEST OF A MEMBER OF THE SOUTH CAROLINA BAR, THE ETHICS ADVISORY COMMITTEE HAS RENDERED THIS OPINION ON THE ETHICAL PROPRIETY OF THE INQUIRER’S CONTEMPLATED CONDUCT. THIS COMMITTEE HAS NO DISCIPLINARY AUTHORITY. LAWYER DISCIPLINE IS ADMINISTERED SOLELY BY THE SOUTH CAROLINA SUPREME COURT THROUGH ITS COMMISSION ON LAWYER CONDUCT.
Ethics Advisory Opinion 95-12
While conducting a routine title examination attorney (A) became aware that another attorney/firm (B) has several tax liens against him/her/it because of failure to remit employee tax withholdings to the IRS/SC Tax Commission.
Question:
Does Rule 8.3(a) require A to report this conduct of B to the Grievance Committee?
Summary:
Rule 8.3(a) would not require A to report this conduct.
Opinion:
Rule 8.3 (a) requires the reporting of conduct only where a substantial question arises as to lawyers' honesty, trustworthiness, or fitness as a lawyer. Unless A has additional independent knowledge as to this conduct, the mere fact that a lawyer or law firm has tax liens filed against the lawyer/firm does not lead the Committee to conclude that these liens bear upon the lawyer's honesty, trustworthiness, or fitness as a lawyer. Tax liens may be the result of legitimate disputes between the taxpayer and the taxing authority.
Moreover, the Comment to Rule 8.3 indicates that reporting a violation is especially important where the victim is unlikely to discover the offense. In the present case, these matters are of public record. Furthermore, the Comment goes on to indicate that the Rule should not be interpreted so strictly as to render it unenforceable.
The provisions of Rule 8.3 when considered in conjunction with the Comments leads this Committee to conclude that the mere discovery of tax liens against a lawyer/law firm in a routine title search without knowledge as to the background or basis for the liens would not impose any requirement for the reporting of the tax liens to the Grievance Committee.