Discovering Unreported Income:Privilege, Forfeiture, and the 5th Amendment



How Far Does the Attorney-Client Privilege Extend?In short, it extends pretty far, but not that far. The attorney-client privilege does not extend to any discussions or advice an attorney gives a client if it is done to aid the client in the commission or planning of criminal or fraudulent activity.

What Specific Information Might be Disclosed?

In matters of tax fraud, which may arise in the disclosure process of a dissolution, and information including, "the client's name, financial status, tax payments, when and where matters were discussed, fee arrangements, and types of services have have to be disclosed."

How Can a Client Protect Their Assets?

Marcyan suggests that, in order to protect an asset, the attorney may want to "trace sources of funds for each marital asset to insulate against forfeiture and show that purchases were from funds derived from legal, not criminal, endeavors." This suggestion extends to the source for attorney's fees as well, which may also be subject to forfeiture if funded by illegal sources.

What About the 5th Amendment?

The Fifth Amendment allows a person to refuse to testify under oath in order to avoid self-incrimination. This right may be invoked by the fraudulent spouse. However, since a divorce is a civil and not criminal proceeding, the court can draw an adverse inference against the fraudulent spouse's refusal to testify

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