Macpherson-Sanford Trust v. Commissioner

MacPherson-Sanford Trust, Sherley MacPherson, Trustee, et al., 1 Petitioners v. Commissioner of Internal Revenue, Respondent Macpherson-Sanford Trust v. Commissioner Docket No. 65872 United States Tax Court 52 T.C. 580; 1969 U.S. Tax Ct. LEXIS 99; June 30, 1969, Filed *99 Henry C. Clark was formerly employed as an attorney in the Collection Litigation Division of the Office of Regional Counsel of Internal Revenue Service, New York. While so employed Clark became involved in an advisory capacity in the Government's defense of various injunction and refund suits filed by Jonathan Holdeen, settlor of the trusts which are petitioners in this group of cases. Two and one-half years after he retired from Government service, Clark was asked to assist in the settlement negotiations and/or trial of these cases as counsel for the trusts. The issues in the trust cases are unrelated and alternative to the issues in the Holdeen individual cases. After being advised by regional counsel that there would be no objection to his representation of the trusts, Clark accepted the employment as counsel for the trusts in these cases, and negotiated a "package settlement" of all of the Holdeen cases. The settlement was not accepted and a year later respondent filed a motion to disqualify Clark from representing the trusts in these proceedings on the ground that it would be a violation of Rule 2, Tax Court Rules of Practice, and canons 6, 36, and 37 of the Canons of Professional*100 Ethics of the American Bar Association. Held, under the circumstances the motion to disqualify is denied. Louis Bender, for Henry C. Clark. William T. Holloran and Jay Hamelburg, for the respondent. Drennen, Judge. DRENNEN *580 This action comes up on respondent's motion to disqualify one of the petitioners' attorneys of record, Henry C. Clark, a former employee in the New York Office of the Regional Counsel of the Internal Revenue Service, from representing petitioners in these proceedings. Petitioners are all trusts created from time to time by a common settlor, Jonathan Holdeen (hereafter Holdeen). Petitioners will be referred to hereafter, collectively, as the Holdeen trusts. Altogether there were approximately 118 trusts created by Holdeen. Respondent's motion is based on the contention that Clark participated in the administrative action on these and related cases while employed by the Internal Revenue Service and that for him to serve as petitioners' counsel in the Tax Court proceeding would create a conflict-of-interests situation in violation of Rule 2, Tax Court Rules of Practice, and the Canons of Professional Ethics of *581 the American*101 Bar Association, canons 6, 36, and 37. 2 It is a case of first impression in the Tax Court. *102 It is Clark's position that there is no conflict of interests because while in the employ of the Internal Revenue Service he took no part in the handling of these cases and never ruled upon, or considered, the issues now pending before this Court in these trust cases. FINDINGS OF FACT Clark was first employed by the Internal Revenue Service (then called Bureau of Internal Revenue) in the Office of Chief Counsel (then called General Counsel) in September 1929 and continued his services in that office until his retirement in 1962. From December 1948 until his retirement he was attached to the New York Office of Regional Counsel. He held the position of assistant regional counsel, collection litigation section (formerly known as Civil Advisory Division), during the years 1957 and 1958 and until October 1959, when on reaching the mandatory retirement age of 70 he was forced to retire. He was then immediately reappointed as senior attorney in the same section and served there until his resignation in March 1962. The revenue agent began his examination of Holdeen's individual returns in 1944. These examinations and those of the Holdeen trusts continued through the time of the determination*103 of the deficiencies in the present Tax Court proceedings. On November 28, 1956, the Commissioner issued statutory notices of deficiency to Holdeen, or to him and his wife, in which they were held taxable individually on the income from eight of the Holdeen trusts for the years 1945 to 1950, inclusive. No petitions were filed with the Tax Court from these notices. On November 28, 1956, deficiency notices were also issued to the same eight trust entities and *582 from these notices petitions were filed with the Tax Court. Individual liability for the taxes on the income of the trusts was assessed against Holdeen on the theory that as grantor of the trusts he retained the management of and control over them and that, in any event, the trusts were void ab initio because they were in violation of the rule against perpetuities. The deficiencies determined against the trust entities were based on the theory that the same trust income was taxable to the trusts because of the uncertainty that it would ever vest in the charities named as residuary beneficiaries. In March 1957 Holdeen entered an injunction suit in the U.S. District Court for the Northern District of New York to *104 prevent the district director from collecting the taxes assessed against him on the income of the several trusts. This suit was finally dismissed by the court in August 1957. See Holdeen v. Raterree, 155 F. Supp. 509. In preparation for defense of the injunction suit in the U.S. District Court, the district director of Internal Revenue for the district of Albany called upon the collection litigation section of Regional Counsel's Office for assistance and the case was assigned to one of the attorneys in that section. The defense of the injunction suit in the U.S. District Court was handled by attorneys for the Department of Justice. The collection litigation section merely gave its assistance in the matter on request, in accordance with the usual practice of exchange of information and assistance between different Government agencies. In October 1957 Holdeen filed suit in the U.S. District Court for the Northern District of New York for refund of the 1945 taxes paid on the income of certain of the trusts. He later filed other suits for refund of taxes paid on the income of the various trusts. These suits were all handled by the Department of *105 Justice in the same manner as the original injunction suit. Legal files were opened for all of these suits in the collection litigation section of Regional Counsel's Office. Holdeen finally won the suit for refund on the 1954 taxes in 1961 after the reversal of the U.S. District Court by the U.S. Court of Appeals for the Second Circuit. Another of the refund suits was won by Holdeen in 1962. The Holdeen refund suits were all closed out in the collection litigation section June 27, 1963. From time to time other deficiency notices were sent to the various trusts and petitions were filed in the Tax Court. All of these trust cases were referred, for trial, to attorneys in the Tax Court section of the Regional Counsel's Office. The collection litigation section was involved only for the purpose of coordinating the various actions in the District Courts and the Tax Court. It was not the function of the collection litigation section to recommend or review proposed statutory notices of deficiency. This was the function of the Tax Court section. *583 On December 26, 1957, 34 petitions were filed in the Tax Court from transferee liability notices sent to the trusts as transferees *106 of Holdeen. Stipulated decisions were entered in all of these cases in the latter part of 1958, or early in 1959. During the pendency of the several suits brought by Holdeen in the U.S. District Courts and the trust cases in the Tax Court, numerous conferences were held by various attorneys in Regional Counsel's Office and Department of Justice attorneys who were handling these cases. Most of these conferences were attended by Clark personally or by other attorneys in his office. Some of the conferences were held in Clark's office and some in the field office where the District Courts in which the cases were pending were located. Voluminous reports and memoranda were prepared on these conferences and letters were exchanged between the attorneys from the different sections of Regional Counsel's Office and the Department of Justice. They show that all aspects of the tax questions involved in both types of cases were discussed. During these conferences and throughout this period, Clark's chief concern was the collection of the taxes assessed against Holdeen individually and the prevention of his recovery of taxes already collected from him. He had no active part in the determination*107 and assessment of taxes against the trust entities. After leaving the Government service in March 1962, Clark retired to his home near Stanfordville in Duchess County, N.Y., the ancestral home of his mother's family. He did not associate himself with any law firm and did not hold himself out as a tax lawyer but did set up a law office in his home. In the summer of 1962 Clark met Janet Adams, a resident of Pine Plains, N.Y., who is a daughter of Jonathan Holdeen and was named trustee of several of the Holdeen trusts. Janet knew of Clark's part in the collection of taxes from her father and was familiar with the questions involved in all of the Holdeen cases. Later sometime in 1964, she and the attorney who was then handling the Holdeen tax cases asked Clark if he would be willing to assist them in the expected settlement of the cases. After reviewing his files, Clark replied that he could not appear as counsel in the individual Holdeen cases because of his participation in the collection of the taxes from Holdeen while in the service of the Government but that he could help with the trust cases because he had not investigated or passed on matters connected with the trust cases *108 while in Regional Counsel's Office. His entry of appearance as counsel in the 78 trust cases then pending before the Tax Court was filed March 4, 1965. Before entering his appearance as counsel, Clark discussed the matter of his representing the trusts in the Tax Court with attorneys in *584 Regional Counsel's Office. Thereafter he received the following letter date February 3, 1965, from the regional counsel in New York: Dear Mr. Clark: Thank you for your letter of January 30, 1965. This is to advise you that we do not intend to move to disqualify you as counsel in any of the trust cases. Indeed, on further reconsideration, we have no objection to your representing Mr. Holdeen individually in the cases involving Mr. Holdeen's individual taxes, should Mr. Holdeen and Mr. Rappleyea see fit to retain you as co-counsel. Very truly yours, (S) Wm. V. Crosswhite, per JJM Wm. V. Crosswhite, Regional Counsel. A letter dated August 16, 1965, from regional counsel in New York to Chief Counsel in Washington recommending the settlement of the Holdeen cases contained the following references to Clark's disqualification: With respect to Mr. Clark, there is nothing we can add to our*109 letter of January 27, 1965 and his reply of January 30, 1965, copies of which we have sent you. We have no reason to think that the statement he makes in his letter that he did not participate in any way in the matter of the tax liability of the Holdeen trusts or its collection, is not true. As an attorney in the Collection Litigation Division of this office, he was concerned with the collection of taxes due from Holdeen individually, jeopardy assessments of these taxes having been made. This included not only collection from Holdeen personally but also from the trusts as transferee but he had no occasion to concern himself with the substantive tax liability of the trusts for their own taxes or their collection. The matter of the substantive tax liability of the Holdeen [trusts] in the 80 cases pending in the Tax Court, was, of course, handled by attorneys in the Tax Court Division of this office. Finally, to the extent that Mr. Clark may have acquired some incidental knowledge relating to the merits of the trust cases by virtue of his handling of the collection of the taxes due from Holdeen, individually, it was our decision to waive any claim of conflict of interest and not *110 to move to disqualify him. This decision has proven a wise one, we feel, as no progress has even been made before toward settlement of any of the cases. The views expressed in this letter were reasserted and enlarged upon in a supplemental statement which regional counsel submitted to Chief Counsel, at the latter's request, in a letter of September 16, 1965. This letter contains, among others, the following statement: For all these reasons it seems to us that Mr. Clark's present representation of the trusts in connection with their substantive tax liability is not a violation of section 207(a) of Title 18 of the United States Code (nor of Canon 36 of the Canons of Ethics) because he did not participate "substantially" in the matter of the substantive tax liability of the trusts when he was participating in the assessment, collection, and opposition to refund of the taxes determined against Mr. Holdeen individually. In any event we do not think any complaint against Mr. Clark should be lodged with the Director of Practice under the circumstances. While there is no provision *585 for waiver contained in section 207(a), as there is under section 207(b) (by "the head of the department*111 or agency concerned with the matter" in the case of a scientific or technological field), there can be no violation of section 207(a), a criminal statute, unless the former employee "knowingly" acts in a matter in which he previously participated "substantially". After Mr. Clark's letter of January 30, 1965 we advised him that we did not intend to move to disqualify him as counsel in the trust cases. While we did not state a reason, Mr. Clark was justified in concluding that we did not dispute the statement in his letter that the trust cases in the Tax Court were not matters in which he had "substantially" participated during his prior service. We are hardly in a position now, therefore, to assert that Mr. Clark accepted the representation knowing that he had a previous substantial participation in the same matter. Moreover, his representation of the trusts has by no means resulted in prejudice to the Government. On the contrary, we are certain that his participation in the matter has contributed to the effectuation of the proposed settlement. Finally, it is our intention to have the settlement stipulations filed in these cases in the event the settlement is approved by all authorities, *112 executed by Mr. Rappleyea as well as Mr. Clark, since they are both co-counsel. There will be no possible question, therefore, as to the validity of the settlement stipulations. There was a continuing effort on the part of counsel for the Government and the petitioners to settle all of the pending Holdeen cases under a single "package" agreement. Clark was a principal figure in these negotiations. Early in 1965 an agreement was reached for settlement of the U.S. District Court cases. A copy thereof was forwarded to the Department of Justice and to Chief Counsel's Office in Washington and was approved by the Tax Court section of Chief Counsel's Office in September 1965. However, no further action has been taken on the proposed settlement. The parties represent to this Court that they are hopeful of being able to reach a settlement of all of the cases and avoid a prolonged trial on the merits. The final figures for settlement of the individual Holdeen cases were set out in a letter which petitioners' attorney, Allen E. Rappleyea, received from regional counsel in New York about September 17, 1965. Rappleyea found that the additional taxes shown to be due in this statement were*113 in excess of what he understood was the amount previously agreed upon and further discussions and dissensions developed. In a letter dated October 6, 1965, Rappleyea, at the suggestion of New York regional counsel, advised the Tax Division of the Department of Justice that the settlement of the cases was off. Near the end of 1965 Clark, at his home in New York, received a telephone call from the attorney in charge of the trust cases for regional counsel in New York saying that he had been directed to request Clark to withdraw from the cases. Clark refused to do so and later discussed the matter with attorneys in Chief Counsel's Office. The formal motion to disqualify Clark was filed in this Court on January 4, 1967. *586 OPINION The allegations in respondent's motion to disqualify are, in summary, a recital of Clark's employment in Regional Counsel's Office from 1948 until March 31, 1962, that Clark participated in the injunction proceedings and refund actions instituted by Jonathan Holdeen, that he attended conferences in which both the Holdeen individual and Holdeen trust cases were discussed, that he wrote a letter pertinent to a deficiency notice issued to one of the trusts, *114 and that because of the identity and similarity of the facts and issues involved in the trust cases to those involved in the injunction and refund proceedings, the representation by Clark of the trusts in these proceedings would be contrary to canons 6, 36, and 37 of the Canons of Professional Ethics and would thus violate Rule 2 of the Tax Court Rules of Practice. Paragraph 8 of the motion reads: The identity and similarity of the facts and issues in the instant cases involving the subject petitioners with the facts and issues in that aforementioned refund and injunction proceedings brought by Jonathan Holdeen are so interrelated as to require the prohibition of Henry C. Clark from acting as counsel for the petitioners. In this motion respondent does not rely on 18 U.S.C. sec. 207(a), 3*116 which is a criminal statute, nor on his own circular 230, 4 which establishes the rules whereby former employees of the Government may represent taxpayers before the Internal Revenue Service, but relies entirely on the charge that for Clark to represent the Holdeen trusts in this Court would violate Rule 2, Rules of Practice, Tax Court of the United States, because*115 to do so would be contrary to canons 6, 36, and 37 of the Canons of Professional Ethics of the American Bar Association. We think this is appropriate because it is doubtful that *587 circular 230 would be binding on this Court and this Court has no criminal jurisdiction which would permit it to proceed under 18 U.S.C. sec. 207. Rule 2, Tax Court Rules, provides in part: "Practitioners before this Court shall carry on their practice in accordance with the letter and spirit of the canons of professional ethics of the American Bar Association." Rule 2 also provides that*117 this Court may deny admission to, suspend, or disbar any person who in its judgment is lacking in proper professional conduct. We do not believe there can be any question that this Court has the power and authority to determine whether a person is qualified to represent a party in a proceeding before this Court, and has jurisdiction to hear and rule on this motion to disqualify based on the alleged violation of the Rules of this Court and the Canons of Professional Ethics. Canons 6, 36, and 37, which are quoted in part in footnote 2, supra, in substance, forbid an attorney from accepting employment in matters adversely affecting any interest of a former client with respect to which confidence has been reposed, forbid a former Government attorney from accepting employment after retirement from Government service in connection with any matter which he had investigated or passed upon while in such employment, make it the duty of lawyers to preserve their clients' confidences and forbid an attorney and his employees from accepting employment which involves or may involve the disclosure of confidences. One of the principal reasons for these rules is to assure clients that they may*118 reveal confidences to their attorneys without fear that the attorneys may later use those confidences to the disadvantage of the former clients. United States v. Standard Oil Co., 136 F. Supp. 345. Under the canons of ethics an attorney must avoid not only actual wrongdoing but also the appearance of wrongdoing. Because of this, certain inferences that confidential information was obtained from the former client have been read into the interpretation of these canons to avoid forcing the former client to reveal the confidences in order to prove the conflict of interest. However, to activate these inferences, it must be shown that there is a substantial relationship between the subject matter of the lawsuit and the matters in which the attorney represented the former client. In applying these rules to former Government attorneys, however, the proof of substantial relationship must, perforce, be more specific and direct, because the Government is involved in so many things that to utilize inferences of access to confidential information within the entire Government or even within one department just because an attorney was formerly employed by the*119 Government or that department would be unrealistic and impractical. Thus it is necessary to identify with more certainty the particular subject matter with respect to which the former Government *588 attorney may have acquired, or had access to, confidential information before he should be disqualified from representing a private individual in an action against the Government. United States v. Trafficante, 328 F. 2d 117; United States v. Standard Oil Co., supra.Recognition of this distinction appears to be made in canon 36, which is concerned specifically with former Government attorneys and forbids them from accepting employment only "in connection with any matter which he has investigated or passed upon while in such office or employ." (Emphasis supplied.) While canons 6 and 37 still apply to a former Government attorney, canon 36 makes it apparent that a more practical test must be used in determining whether a former Government attorney would be violating his duty to his former client by representing an individual person in an action against the Government. Respondent appears to recognize the*120 above requirement here because he has made a determined effort to show that Clark actually dealt with these trust cases while employed in Regional Counsel's Office. It is our conclusion that respondent has failed to prove that Clark should be disqualified from appearing as attorney in these proceedings. 5 The evidence fails to convince us that Clark's duties and activities while serving in Regional Counsel's Office were sufficiently related to the issues involved in these trust cases, or that he acquired such knowledge of the trust cases, to require his disqualification from representing the trusts in these proceedings, particularly under the circumstances that existed when this motion was filed. In this respect, our views coincide with those expressed by the officials in Regional Counsel's Office in the letters quoted above. There is no satisfactory explanation of why these officials changed their views or why their rulings were reversed. *121 A number of witnesses, including most of the Internal Revenue Service attorneys and the revenue agents who were involved in the cases, described in detail the course of the cases in the Service and the U.S. District Courts. Respondent produced at the trial more than 100 office documents from his files showing the various actions taken. It is fair to say, in summary of this mass of evidence, that Clark's chief duty and concern in the Holdeen cases was the collection of the taxes that had been assessed against Holdeen, individually, and that he had no part in the determination of or consideration of the tax liabilities of the trusts. Inevitably, in the long-drawn-out consideration of the various cases, there was some crossing over of the functions of the different sections in Regional Counsel's Office. However, the trusts were never involved in the refund and injunction proceedings. *589 Not only are the trusts different taxable entities from Holdeen but the issues in the trust cases are entirely different from the issues in the Holdeen individual cases. Undoubtedly, Clark familiarized himself with the terms of at least some of the trust documents, because it was necessary*122 to know the provisions thereof in order to support the Government's claim that the income of the trusts was taxable to Holdeen, but he was also aware of the fact that the Government's claim of taxes against the trusts was alternative to and inconsistent with the claim that the trust income was taxable to Holdeen. There is no evidence that Clark had anything to do with the formulation of the Government's theory for taxing the trusts or with the processing and prosecuting of the trust cases. Most of the witnesses for respondent and for petitioners were in substantial agreement on the more important facts. Much of their testimony was given from their memory of events which took place more than 10 years ago. Perhaps the greatest variance in the testimony of the witnesses lies in that of one of respondent's principal witnesses, John B. Minnick, to whom the individual Holdeen cases were assigned in the refund litigation section of the Chief Counsel's Office in Washington, and Clark himself. It appears to be Minnick who initiated the disqualification action against Clark and who was originally responsible for the irreconcilable position taken by respondent in the matter. In these circumstances*123 we can reasonably assume that each of these witnesses was something less than totally unbiased and that his recollection of prior events may have been somewhat colored by motives of self-interest or self-vindication. We can find no evidence of any confidences of the Government that Clark gained or may have gained through his employment with the Government that he might use to the disadvantage of the Government in these proceedings. The fact is that, to all appearances, there were no confidences involved in any of the cases. So far as we have been able to ascertain, there has never been any concealment or repression of the facts by either the Government or the taxpayers. The cases are not of the type generally found to elicit confidences. The issues involved are straightforward questions of how the tax laws apply to undisputed facts, such as whether the Holdeens individually and the several trusts are separate taxable entities, whether the trusts are valid trusts, and whether the income of the trust was irrevocably set aside for charities. Furthermore, about 1 year before this motion to disqualify was filed, Clark had been specifically authorized to represent the trusts in these*124 proceedings by an official of the Government whom he had every reason to believe he could rely on, and it seems that if the Government had any confidences with respect to these matters they would have been revealed to Clark during the period of about 1 year in which *590 he was specifically authorized to represent the trusts and in the course of which he was most instrumental in working out a proposed package settlement of all of the Holdeen individual and trust cases. While Clark does not rely on laches on the part of the Government, it seems a little late for the Government to claim as unethical conduct on the part of Clark that which it had encouraged and in which it had participated. Respondent does not claim, nor did he offer any evidence, that he will suffer any actual disadvantage if Clark is permitted to represent the trusts in these cases; respondent claims this is irrelevant. This may be true in the usual situation, but this is not the usual situation and we cannot close our eyes to the real circumstances in order to permit the Government to prove a theory. This Court is more concerned at this time with the final disposition of the litigation than it is with the *125 alleged theoretical unethical conduct of Clark which we cannot find has been proved. While the provisions of circular 230 would not be binding on this Court and we certainly have no intention of interpreting or applying that regulation in this proceeding, it does appear from a cursory reading of that regulation that it would not be a violation of those provisions for Clark to represent these trusts before the Internal Revenue Service. Respondent relies primarily on United States v. Trafficante, supra, in which an attorney who had handled income tax claims against the taxpayers while employed as an attorney in the Office of Regional Counsel in Jacksonville, Fla., was held disqualified from representing taxpayers in a suit brought against them by the Government for the collection of the various tax deficiencies which had been agreed upon and reflected in a stipulated decision entered by the Tax Court. The Court of Appeals for the Fifth Circuit held, reversing the lower court, that the attorney's representation of the taxpayers under those circumstances would be in violation of the provisions of canons 6, 36, and 37 of the Canons of Professional Ethics. *126 The court there said (pp. 119-120): The test is not, as appellees urge, whether the attorney represented the adverse party, here the United States, with respect to the specific issues in the pending litigation. * * * [Cits. omitted.] The prohibition of Canon 36 is against acceptance of employment "in connection with any matter which he has investigated or passed upon while in such [public] office or employ." The collection of a tax is "in connection with" the determination or assessment of the tax. * * * The statutory interdiction includes acting adversely to the United States in connection with a claim of the United States in which the attorney participated personally and substantially. We think the case at bar is factually distinguishable from the Trafficante case. We cannot find from the evidence presented in this case that Clark's representation of the trusts herein would be adverse to *591 the claim of the Government against Holdeen individually, which is the claim in which Clark participated while an employee of the Government. We do not find that Clark participated "personally and substantially" or that he "investigated or passed upon" the Government's claim*127 against the Holdeen trusts. See Uniweld Products, Inc. v. Union Carbide Corp., 385 F. 2d 992, in which the Court of Appeals for the Fifth Circuit refused to disqualify an attorney because the moving party failed to prove similarity of issues and facts involved in the principal proceeding and those with which the attorney may have become familiar in his prior representation of the movant. See also Fleischer v. A.A.P., Inc., 163 F. Supp. 548; and United States v. Standard Oil Co., supra. In our reliance on the fact that Clark did not personally participate in the determination and assessment of any of the deficiencies against the trust, we do not intend to favor compliance with the "letter" over compliance with the "spirit" of the Canons of Professional Ethics. It should be noted that the Tax Court rule requires both. A self-imposed disqualification from representing petitioners in any of the Holdeen cases, whether those of the trust or the individuals, may have been a commendable course for Clark to take. Yet we cannot say within our judicial prerogatives that he was required*128 to do so. It is our determination that the evidence of record fails to support respondent's motion to disqualify Clark. Accordingly, an order will be issued denying the motion. We hope that this action will lead to a long overdue disposition of these cases, either by settlement or trial, all discussions concerning which have been suspended for about 3 years as a result of this proceeding. We are confident that Clark's participation in the disposition of the Holdeen cases will in no way be prejudicial to the United States. An appropriate order will be entered. Footnotes 1. This opinion also controls disposition of similar motions to disqualify Henry C. Clark in numerous Holdeen trust cases now pending in the Tax Court.↩ 2. From Rule 2, Rules of Practice, Tax Court of the United States -- "Practitioners before this Court shall carry on their practice in accordance with the letter and spirit of the canons of professional ethics as adopted by the American Bar Association." From canon 6, Canons of Professional Ethics -- "The obligation to represent the client with undivided fidelity and not to divulge his secrets or confidences forbids also the subsequent acceptance of retainers or employment from others in matters adversely affecting any interest of the client with respect to which confidence has been reposed." From canon 36, Canons of Professional Ethics -- "A lawyer, having once held public office or having been in the public employ, should not after his retirement accept employment in connection with any matter which he had investigated or passed upon while in such office or employ." From canon 37, Canons of Professional Ethics -- "It is the duty of a lawyer to preserve his client's confidences. This duty outlasts the lawyer's employment, and extends as well to his employees; and neither of them should accept employment which involves or may involve the disclosure or use of those confidences, either for the private advantage of the lawyer or his employees or to the disadvantage of the client, without his knowledge and consent, and even though there are other available sources of such information. * * *"↩ 3. Sec. 207. Disqualification of former officers and employees in matters connected with former duties or official responsibilities; disqualification of partners (a) Whoever, having been an officer or employee of the executive branch of the United States Government, of any independent agency of the United States, or of the District of Columbia, including a special Government employee, after his employment has ceased, knowingly acts as agent or attorney for anyone other than the United States in connection with any judicial or other proceeding, application, request for a ruling or other determination, contract, claim, controversy, charge, accusation, arrest, or other particular matter involving a specific party or parties in which the United States is a party or has a direct and substantial interest and in which he participated personally and substantially as an officer or employee, through decision, approval, disapproval, recommendation, the rendering of advice, investigation, or otherwise, while so employed, or * * * * Shall be fined not more than $ 10,000 or imprisoned * * *↩ 4. Sec. 10.33. Practice by Former Internal Revenue Service Employees. -- (a) Matters pending while employed. -- No former officer or employee of the Internal Revenue Service, shall, within two years after the termination of his Internal Revenue employment, practice or in any manner act as attorney or agent or as the employee of an attorney or agent in any matter which was pending in the Internal Revenue Service during the period of his employment therein, unless he shall first obtain the written consent of the Director of Practice. This consent will not be granted unless it appears that the applicant, as an officer or employee of the Internal Revenue Service, did not give personal consideration to the matter or gain knowledge of the facts of it during and by reason of his employment in the Internal Revenue Service. [Former 31 C.F.R. sec. 10.33↩.] 5. Respondent agrees with petitioner that his motion to disqualify Clark is one in which he bears the burden of proof. However, we have reached our conclusion on consideration of the record as a whole without reliance on the burden of proof.↩