Lawyers oppose disclosure of service fees

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Friday, April 11, 2014

MEMBERS of the Integrated Bar of the Philippines (IBP), the mandatory association for lawyers in the country, has asked the Supreme Court (SC) to nullify a government regulation requiring doctors, lawyers and self-employed individuals to publicly disclose their professional fees and the identities of their clients.

The IBP said Revenue Regulation No. 4-2014 (Guidelines and Policies for the Monitoring of Service Fees of Professionals) issued by the Department of Finance (DOF) and Bureau of Internal Revenue (BIR) is unconstitutional for violating the separation of powers as it "encroaches upon" the SC's exclusive authority "to regulate and prescribe rules for the protection and enforcement of constitutional rights, legal practice and the legal profession."

The group feared of illegal restriction on the practice of law, saying the regulation "unduly limits a lawyer's liberty to ascertain the fair and reasonable value of his services according to standards defined by the Supreme Court."

Section 2 of R.R. No. 4-2014 requires all self-employed professionals to submit an affidavit indicating the rates, manner of billings and the factors they consider in determining their service fees upon registration on or before January 31 of each year and register the books of accounts and official appointment books which shall contain the names of the client and date or time of the meeting.

They must also issue a BIR-registered receipt showing a 100 percent discount in cases when no professional fees are charged.

The IBP pointed out that while the BIR Commissioner has the power to secure information from taxpayers under the National Internal Revenue Code (NIRC), such is limited only to determining the correctness of the taxes that they are liable to pay.

Sections 113 and 237 of the NIRC, which the BIR used as basis for coming up with the assailed policy, also do not require the submission of the self-employed appointment books, full disclosure of all client identities, and details of meetings and the submission of an affidavit of fixed service rates and fees, the IBP said.

The group added that the regulation is unethical as it violates the constitutional right of privacy of lawyers and their clients.

"One rule adopted to serve this purpose is the rule on attorney-client privilege. Under the operation of this privilege, an attorney is mandated to keep inviolate his client's secrets or confidences," the petition stated, which also called for the issuance of a temporary restraining order (TRO) on the policy.

BIR Commissioner Kim Henares welcomed the lawyers' move.

"They can always file a case in court if they want. That is how our system works. If they charge and generate revenues, they are subject to the tax code and all the rules therein," she said in a text message on Friday.

The BIR has been clamping down on self-employed individuals like lawyers, doctors and celebrities for alleged non-payment of correct taxes.

Its high-profile campaign recently led to the filing of P2.93-million tax evasion complaint against former Philippine Medical Association (PMA) president Dr. Leo Olarte before the Department of Justice (DOJ), weeks after the BIR released a newspaper advertisement depicting doctors as a burden to other taxpayers. (Sunnex)

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