Opinion
12505-19
09-22-2023
Jason T. Mardis & Kimberly D. Mardis, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER
Joseph Robert Goeke Judge
It has come to the Court's attention that Jason T. Mardis has been charged with Aggravated Domestic Violence in the State of Mississippi. The County Court of Rankin County, Mississippi, on October 11, 2022, has ordered Mr. Mardis to have "NO CONTACT" with Mrs. Mardis.
By Status Report filed June 14, 2023, the parties informed the Court that "Petitioner's [sic] counsel does not anticipate petitioner Kimberley D. Mardis pursuing innocent spouse relief under section 6015.
We are concerned about the existence of a conflict of interest in this case and will require petitioners to address it. The "Court 'has inherent power and authority to regulate and supervise proceedings before it so as to insure the integrity of its processes.'" Williams v. Commissioner, 119 T.C. 276, 282 (2002) (quoting Crop Assocs.-1986 v. Commissioner, T.C. Memo. 2000-216 (citing Freytag v. Commissioner, 501 U.S. 868, 891 (1991), Chambers v. NASCO, Inc., 501 U.S. 32, 43-46 (1991))). "The Court's inherent power extends to regulate both conduct before it and conduct beyond its confines.'" Id. (quoting Crop Assocs.-1986 v. Commissioner, T.C. Memo. 2000-216 (citing Chambers, 501 U.S. at 44)).
Tax Court Rule 24(g) provides that where any counsel of record represents more than one party with differing interests with respect to any issue in a case, then such counsel must either secure the informed written consent of the client; withdraw from the case; or take whatever other steps are necessary to obviate a conflict of interest or other violation of the ABA Model Rules of Professional Conduct. Rule 24(g) further provides that the Court may inquire into the circumstances of counsel's employment in order to deter such violations. See also Rule 201(b).
ABA Model Rules of Professional Conduct rule 1.7 (Model Rule 1.7) states:
Client-Lawyer Relationship
(a)Except as provided in paragraph (b), a lawyer shall not represent a client if the representation involves a concurrent conflict of interest. A concurrent conflict of interest exists if:
(1)the representation of one client will be directly adverse to another client; or
(2)there is a significant risk that the representation of one or more clients will be materially limited by the lawyer's responsibilities to another client, a former client or a third person or by a personal interest of the lawyer.
(b)Notwithstanding the existence of a concurrent conflict of interest under paragraph (a), a lawyer may represent a client if:
(1)the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to each affected client;
(2)the representation is not prohibited by law;
(3)the representation does not involve the assertion of a claim by one client against another client represented by the lawyer in the same litigation or other proceeding before a tribunal; and
(4)each affected client gives informed consent, confirmed in writing.
Considering the potential section 6015 claim and the facts of this case, we believe there is a significant risk that petitioners' counsels' representation of both spouses in this case would materially limit their responsibilities to the other spouse. It is therefore
ORDERED that counsel for petitioners is directed on or before October 20, 2023, to file with the Court a Memorandum stating why they believe they should be permitted to continue to represent both petitioners in this case. The Memorandum shall address the requirements of Tax Court Rule 24(g) and Model Rule 1.7. It is further
ORDERED that if counsel for petitioners take the position that they should be permitted to continue to represent both spouses, petitioners shall, on or before October 20, 2023, file a Status Report to which they shall attach 1) a document reflecting the informed written consent of Mr. Mardis, signed by him, and 2) a document reflecting the informed written consent of Mrs. Mardis, signed by her. The documents must both satisfy all requirements of Model Rule 1.7 and the comments thereto. To this end, the document signed by Mrs. Mardis should include her acknowledgment of specific factual circumstances in this case that would be favorable to any claim she foregoes for innocent spouse relief under section 6015.