A proposal by the American Bar Association that would prohibit anyone but lawyers from giving advice about the law is drawing opposition from the federal government, which says it is intended to stifle competition and could subject real estate agents, income tax preparers, credit counselors and other laypeople to civil and criminal penalties.

The proposal, which will be discussed this week at-the association's meeting in Seattle, would also prohibit nonlawyers from negotiating on behalf of others and "selecting, drafting or completing legal documents." The association will vote on the proposal in August.

The bar association's president, Alfred P. Carlton Jr., said that the proposal was intended to provide a simple and clear definition of what constitutes the. practice of law. Mr. Carlton also said that it would encourage nonlawyers to provide services they now hesitate to offer, for fear of stepping over the line that now separates the practice of law and other businesses. "There is a chilling effect on those industries," he said, "because there is not, in most jurisdictions, a well-understood or bright-line definition of what is and is not the practice of law."

But the Federal Trade Commission and the Department of Justice are concerned about the scope of the proposal and submitted objections in a letter to the bar association in December. In whatever states adopted it, the agencies said, the rule could subject tenants' associations, claims adjusters, tax preparers, real estate agents, investment bankers, business planners, hospitals, labor unions and others to penalties.

In an interview, Thomas M. Gordon, a lawyer with Halt, a legal consumer advocacy group in Washington, gave an example of the definition's scope. "Dear Abby would be subject to prosecution every time she answered a reader's letter that dealt with a legal issue," Mr. Gordon said.

The bar association's own antitrust law section opposes the definition. Robert T. Joseph, the section's chairman, said the proposal would prevent credit counselors from helping consumers negotiate payment plans with their creditors or laypeople from helping immigrants fill out Immigration and Naturalization Service forms.

Mr. Joseph said the association should instead encourage open competition, by explaining to the public why lawyers provide superior services at reasonable prices.

Jerry Ellig, the deputy director of the office of policy planning for the trade commission, explained why the government made its unusual submission. "We don't think it's good public policy to constrain competition in the absence of really strong evidence that the constraint has an offsetting benefit," Mr. Ellig said. "We haven't seen evidence of how consumers are more protected if an attorney is present."