I.R.C. § 6050I and the Attorney-Client Privilege: The Misplaced Emphasis on Incrimination over Confidentiality
Steven A. Migala   |   1996 U. Ill. L. Rev.

The Internal Revenue Service vigorously prosecutes attorneys who improperly report cash transactions with their clients. Under I.R.C. § 6050I and accompanying regulations, attorneys who receive more than $10,000 in cash are required to report the transaction to the Secretary of the Treasury using Form 8300. Among the items requested on the form are the client's identity and fee information. In general, disclosure of this client information is not protected by the attorney-client privilege; however, the federal courts have recognized three exceptions to this general rule: (1) the legal advice exception, (2) the last-link exception, and (3) the confidential communication exception. In this note, the author examines these exceptions in light of the underlying policy rationales of the attorney-client privilege and concludes that there is a misplaced emphasis on incrimination over confidentiality. In addition, the author finds a lack of predictability in resolving the tension between the attorney-client privilege and the disclosure mandate of § 6050I. To resolve these problems, the author proposes a standard based on whether the client reasonably intended his or her identity and/or fee arrangements to remain confidential.