SC stops BIR from requiring lawyers to reveal fees

Buena Bernal
SC stops BIR from requiring lawyers to reveal fees
While the BIR tax regulation covers all self-employed professionals, the SC-issued TRO only covers registered lawyers

MANILA, Philippines – The Supreme Court (SC) on Tuesday, April 22, issued a temporary restraining order (TRO) on a tax regulation requiring lawyers to declare the service fees they charge clients.

While the tax regulation issued by the Bureau of Internal Revenue (BIR) covers all self-employed professionals, the SC-issued TRO only covers registered lawyers.

The court was acting on a petition filed by the Integrated Bar of the Philippines (IBP) on April 8

IBP, an organization of lawyers in the country, assailed BIR Revenue Regulation (RR) 4-2014, saying it infringes on the right to privacy of lawyers and their clients.

Department of Finance (DOF) Secretary Cesar Purisima and BIR Commissioner Kim Jacinto-Henares were enjoined by the High Court from implementing the regulation.  

Purisma and Henares, who both signed the revenue regulation, were named respondents in the IBP’s petition.

Issued by the BIR on March 20, the regulation requires self-employed professionals to submit “an affidavit indicating the rates, manner of billings, and the factors” considered in determining service fees.

“An attorney is mandated to keep inviolate his client’s secrets or confidences…. Said affidavit containing a lawyer’s rates will become accessible to the public, akin to an advertisement prohibited by this Honorable Court,” the IBP’s petition read.

The IBP cited Rule 130, Section 24 (b) of the Rules of Court, which pertains to privileged communication between a lawyer and his client.

The organization argued that the requirement for fees disclosure will impose an “illegal restriction on the practice of law, as it unduly limits a lawyer’s liberty to ascertain the fair and reasonable value of his services.”

The law profession might be seen as a “mere trade or moneymaking endeavor” once the rates are made public, the IBP added.

IBP added that the DOF and BIR went beyond the scope of their authority in issuing the RR.

“While the BIR Commissioner has the power to secure information from taxpayers, such is limited only to ascertain the correctness of the taxes that they are liable to pay…. There is no provision in the NIRC (National Internal Revenue Code) or in other tax laws that authorizes the BIR to compel taxpayers to publicly disclose privileged and confidential information, such as their professional fees and the identities of their clients,” the IBP’s petition read.

The RR mandates the registration of books of accounts and official appointment books, which contain names of their clients and the date/time of their meetings. –



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