Revenue audits to bypass advisers

Accountants and other tax advisers will not be asked by the Revenue Commissioners to disclose information about clients who are being prosecuted, according to a new Draft Code of Practice for Revenue audits.

Taxpayers making voluntary disclosures which are likely to lead to prosecution will be cautioned, and the Revenue has given an undertaking that information disclosed prior to a caution will not be used in a criminal prosecution.

However, the Revenue points out that auditors becoming aware of serious tax fraud are now obliged by legislation to take steps to correct the position.

The president of the Institute of Certified Public Accountants in Ireland (CPA), Mr Denis Ryan, welcomed the new draft code. Earlier this year Mr Ryan drew attention to the difficulties facing accountants due to the increase in legal actions arising from Revenue audits. The lack of privilege for accountants acting as advisers meant there was an increasing risk of them becoming "star witnesses" in criminal proceedings against their own clients, he said.

Mr Ryan said the new draft code will help alleviate those concerns. A series of seminars for CPA members on the new code are to be held by the CPA.

The code "will allow the vast bulk of audit cases to be settled on the basis of agreement between the tax practitioners and the Revenue without fear of a voluntary disclosure, given in good faith, being used as a basis for a prosecution," Mr Ryan said.

"In addition there is a very valuable re-iteration of a statement first made in 1994 whereby the Revenue undertake that they will not inquire into information disclosed by clients to their advisers, including information which might be relevant at court proceedings, actions or settlements."

"This assurance is critical to maintaining client confidentiality and will ensure the good working relationship which currently exists between accountants and the Revenue continues," Mr Ryan said.

The CPA seminar series, entitled "Professional Adviser and Criminal Prosecutions within the Tax Code", will be held in Co Clare, Co Wexford, and Dublin, between November 17th and 25th. Leading taxation consultants Dr Frank Brennan and Mr Seamus Howley, and solicitor Mr Dara Robinson, will address the seminars. Further details can be had from the CPA on (01) 6767353.