RMC No. 12-2018: Clarifies the nature and extent of the power of the Commissioner of Internal Revenue to obtain information under Section 5 of the NIRC of 1997, as amended, vis-a-vis Attorney-Client and Accountant-Client privilege

Key points

1. Lawyers. Rule 21.01 of the Lawyer’s Code of Professional Responsibility lets a lawyer reveal a client’s confidences when required by law. In Genato v. Silapan, the Supreme Court held that privilege does not extend to communications made in contemplation of a crime or fraud, and attempts to evade tax are offenses under Section 254 of the NIRC.
2. Accountants. Section 29 of RA No. 9298 says the Accountant-Client privilege does not apply when documents are produced through a subpoena from a court, tribunal or government regulatory or administrative body. Section 140.1 of the Code of Ethics allows disclosure where there is a legal right or duty to disclose.
3. Conclusion. Taxes are the lifeblood of the nation and collection should be pursued without unnecessary impediment. The privileged communication cannot defeat the Commissioner’s power to obtain information under the Tax Code.

Who is affected

• Lawyers and accountants holding client information