PHP - Make reference parameter optional?

You can make argument optional by giving them a default value:

function bar($var1, &$reference = null)
{
    if($reference !== null) do_stuff();
    else return FALSE;
}

However please note that passing by reference is bad practice in general. If suddenly my value of $foo is changed I have to find out why that is only to find out that it is passed by reference. So please only use that when you have a valid use case (and trust me most aren't).

Also note that if $reference is supposed to be an object, you probably don't have to (and shouldn't) pass it by reference.

Also currently your function is returning different types of values. When The reference is passed it returns null and otherwise false.

Taken from PHP official manual:

NULL can be used as default value, but it can not be passed from outside

<?php

function foo(&$a = NULL) {
    if ($a === NULL) {
        echo "NULL\n";
    } else {
        echo "$a\n";
    }
}

foo(); // "NULL"

foo($uninitialized_var); // "NULL"

$var = "hello world";
foo($var); // "hello world"

foo(5); // Produces an error

foo(NULL); // Produces an error

?>