Readers will be aware that the disclosure regime, as contained in Chapter 3 of Part 33 TCA 1997, requires promoters, and in certain circumstances clients/users, of disclosable transactions, to disclose certain information to Revenue. The commencement date was changed from 3 April 2010 to 17 January 2011 by Finance Act 2011; however, the first disclosures were due 15 April 2011.

The relevant forms to be used in disclosing transaction details as well as client lists are available on the Revenue website.

In cases where the promoters asserts legal professional privilege (LPP) the obligation to disclosure details of the transactions rests with the client/user. There is no specific form for such a promoter to advise Revenue that they are asserting LPP in relation to a disclosure requirement. In the event of such a situation arising, the promoter is required, within the relevant time limits, to advise Revenue in writing of that fact along with the name, address, telephone number and tax reference number of the promoter.

This unequal treatment between legal firms (which can assert LPP) and firms of Chartered Accountants (which cannot) remains unacceptable. It is a weak point in what is customarily a fair and even handed approach by the Revenue Commissioners towards the different types of tax agent. The matter has been acknowledged by the then Minister for Finance Mr Lenihan, who was responsible for the legislation. In a statement of 19 January 2011, he said:

• “... Concerns were also expressed during the consultation period about the potential impact of the new rules on competition between tax lawyers and other tax professionals given the recognition in the primary legislation to the principle of legal professional privilege relating to certain communications between a solicitor and a client. Having regard to these concerns, there may be a competitiveness issue that needs to be considered.
• In addition, there appears to be a weakness in the operational effectiveness of the disclosure regime, where tax lawyers are concerned, that needs to be addressed. Accordingly, the Minister has sought the advice of the Attorney General on what operational changes might be made to the disclosure rules that would address the operational weakness while upholding the common law principle of legal privilege.”

The competitiveness issue highlighted by the Minister must be corrected.