## Facts

- Geraldine and Philip Coleman were audited by the Internal Revenue Service regarding their tax returns.
- Philip retained attorney Richard Kates to represent both Philip and Geraldine during the audit.
- Kates also represented the Colemans and Philip’s business in other litigation and, through those engagements, reviewed and obtained access to extensive personal and business records.
- Settlement discussions with the IRS did not resolve the dispute, and Philip hired new attorneys to litigate the tax matter in the United States Tax Court.
- After the Tax Court petition was filed, Philip and Geraldine divorced, but they continued with joint representation in the tax case for a period of time.
- Philip later negotiated proposed settlement terms with the IRS and communicated the proposed terms to Geraldine.
- After learning the proposed settlement terms, Geraldine withdrew her consent to joint representation.
- Geraldine then hired Kates to represent her separately in the same tax case and to argue that she qualified for innocent-spouse relief.
- Philip objected to Kates representing Geraldine, arguing that Kates’ prior joint representation and prior access to confidential information created a conflict of interest.
- Kates refused to withdraw, and Philip moved in the Tax Court to disqualify Kates.

## Issues

1. Whether the Tax Court should disqualify an attorney from representing one ex-spouse in an ongoing deficiency case when the attorney previously jointly represented both spouses in the same dispute and the spouses’ positions have become adverse.

## Decision

- The Tax Court ruled on Philip Coleman’s motion to disqualify attorney Richard Kates from representing Geraldine Coleman in the Tax Court proceeding.
- The court determined that Kates could not continue as Geraldine’s counsel in the matter given his prior joint representation of both spouses in the same tax controversy and the resulting conflict concerns.

## Legal Principles

- The Tax Court has authority to supervise the conduct of lawyers who appear before it and may disqualify counsel when required to protect the fairness of the proceeding.
- A lawyer’s duties to a former client—especially duties tied to loyalty and confidentiality—can restrict later representation of another client whose interests are adverse to the former client in the same or a related matter.
- When an attorney previously represented two clients jointly in the same tax dispute, and those clients later take opposing positions in that dispute, continued representation of only one of them presents a conflict that generally requires withdrawal unless the affected clients give informed consent.
- Access to a former client’s confidential information during earlier representation supports disqualification where the later representation creates a meaningful risk that such information could be used against the former client.

## Conclusion

Coleman involved a post-divorce conflict in a Tax Court deficiency case: after attorney Kates had jointly represented Philip and Geraldine Coleman and reviewed their personal and business records, Geraldine rehired Kates to pursue innocent-spouse relief against Philip’s interests, leading Philip to seek disqualification; the Tax Court addressed the conflict created by the prior joint representation and ruled that Kates could not continue representing Geraldine in the case.


Coleman v. Commissioner, Docket No. 44-86-86 (1991)