Abstract
In addition to rules of professional responsibility applicable to the practice of law generally, some legal specialties have complementary ethical rules or guidelines tailored to the unique aspects of that area. In tax law, important additional rules include regulations promulgated by the Department of the Treasury to govern practice before the Internal Revenue Service.
Tax malpractice suits against tax advisors have multiplied in recent decades. As a result, incompetent or dishonest tax advisors risk incurring liability for malpractice damages as well as being disciplined under bar or government rules.
This situation raises the question whether the Treasury Department’s professional responsibility regulations should be doctrinally connected to the governing standard of care in tax malpractice litigation. That is, should proof that one of the regulations has been violated be considered evidence—whether rebuttable or irrebuttable—that the malpractice standard of care was not satisfied?
There are arguments in favor of linkage. However, this Article concludes that, on balance, linkage would be unwise. The Article considers the various forms that linkage could take and rejects their desirability. The purposes animating the Treasury and the Service are not well correlated with the purposes animating the malpractice system. Basing malpractice litigation outcomes on the Treasury professional responsibility regulations could undermine lawyerclient relationships; federalize state malpractice regimes; create an ever present possibility of the Service’s abuse; confuse, prolong, and raise the cost of malpractice cases; and distort the development of federal tax disciplinary law.