On review of an opinion of the Committee on the Unauthorized Practice of Law.
For affirmance -- Chief Justice Wilentz and Justices Clifford, Handler, Pollock, O'Hern, Garibaldi and Stein. For reversal -- None.
[102 NJ Page 232] In this case the New Jersey Society of Certified Public Accountants (CPAs) seeks our review of Opinion No. 10 of the Committee on the Unauthorized Practice of Law (Committee). In that Opinion, the Committee concluded that "the preparation of a[ ] [New Jersey] Inheritance Tax Return requires the application
of a gamut of legal principles, and [therefore] its preparation by a non-lawyer acting for another, would constitute the unauthorized practice of law." 95 N.J.L.J. Index Page 1209 (Nov. 16, 1972). This Court's jurisdiction is invoked pursuant to our supervisory authority over the Committee, R. 1:22; R. 1:19-8, which in turn derives from our constitutional power to govern the practice of law. N.J. Const. of 1947 art. VI, § 2, para. 3.
After reviewing the record, we are satisfied that the process of preparing and filing a New Jersey Inheritance Tax Return (Inheritance Tax Return) sufficiently involves legal principles so as to require the exercise of our supervisory authority over the practice of law. Nevertheless, for the reasons set forth in this opinion, we hold that the interests of the public will not be compromised if Opinion No. 10 is modified to allow a limited exception that permits certified public accountants licensed in New Jersey to prepare and file Inheritance Tax Returns.
This controversy has its roots in Formal Opinion No. 19, which was issued by Attorney General Richman in April, 1955. That Opinion was a response to an inquiry from the State Treasurer concerning his authority to promulgate regulations designating who may file returns with the Transfer Inheritance Tax Bureau (Bureau). The Attorney General ruled that "[a] person preparing and filing a return must have a thorough knowledge not only of the specific tax law involved but of the statutes and case law dealing with property, wills, deeds, trust[s], family relationships and many other subjects," and therefore determined that the preparation, signing, and filing of a return by a person not licensed to practice law and not acting for the estate in a representative capacity would constitute the unauthorized practice of law. 19 Op. Att'y Gen. 4 (1955). Hence, the Attorney General concluded that the State Treasurer "not only may but should refuse to accept a return filed by
an accountant or other person other than an attorney acting in behalf of the legal representative of the estate * * *." Id. at 4-5. The Treasurer was advised that he had not only the implied power to regulate the filing of returns because the Legislature had declared the unauthorized practice of law to be an illegal act, N.J.S.A. 2A:170-78,*fn1 but also the express power to formulate and adopt rules and regulations designed to foster the efficient administration of the Department of Treasury. N.J.S.A. 52:18A-3, -24, -30(d).
Accordingly, Bureau Regulation IT-25 was adopted in December, 1955. Paragraph 8 of IT-25 provided as follows:
No District Supervisor, or other employee, shall accept an inheritance tax report on the estate of a resident decedent from or negotiate with any person with regard to resident decedent estate matters unless said estate is represented by:
(a) An Attorney at Law of the State of New Jersey, or
(b) the personal representative of the estate, or
(c) an heir at law, next of kin, grantee, transferee, legatee or devisee of the decedent.
The provisions of this paragraph may be waived by the State Supervisor where in his judgment a strict adherence thereto would jeopardize the collection of any tax due or ...