SC stops BIR drive vs lawyers

MANILA, Philippines - The Supreme Court (SC) yesterday stopped the Bureau of Internal Revenue (BIR) from implementing its new regulation requiring lawyers to declare their service rates.

In summer session in Baguio City, the justices decided to issue a temporary restraining order (TRO) enjoining the BIR from implementing its Regulation No. 4-2014, which requires self-employed professionals to submit affidavits indicating their rates and register their official appointment books.

The order is effective immediately and until further orders from the court.

The SC granted the immediate relief sought in the petition filed by the Integrated Bar of the Philippines (IBP) earlier this month.

Since only the IBP filed the petition, the SC clarified that the TRO applies to the application of the assailed BIR “only as against lawyers.”

In its 36-page petition filed through former University of the Philippines law dean Pacifico Agabin, the IBP asked the high court to declare the new BIR regulation unconstitutional.

Petitioners alleged that the new BIR rule violates the constitutional separation of powers of the three branches of government.

They said it “encroaches upon the court’s exclusive authority and jurisdiction to regulate and prescribe rules for the protection and enforcement of Constitution Rights, legal practice and the legal profession.”

The IBP further argued that the BIR order infringes on the constitutional right to privacy of lawyers and their communications with clients, which is also protected by Rule 130, Section 24 (b) of the Rules of Court.

They also argued that the assailed policy does not conform to the ethical standards set by the high court for the legal profession, particularly the Code of Professional Responsibility and Rules of Court which both require that the relationship between a lawyer and his client should be “strictly personal, fiduciary and highly confidential.”

The IBP further said that under Rule 130, Section 24 (b) of the Rules of Court, lawyers are prohibited from testifying on any communication received from a client.

They also believed that the submission of a notarized list of services with corresponding rates makes it appear that the law profession is a “mere trade or moneymaking endeavor” instead of being devoted to public service.

Petitioner also expressed fear that the new BIR regulation would lead to “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 according to standards defined by the Supreme Court.”

Lastly, they argued that the BIR has no authority in issuing the regulation that it is not within the scope of their rule-making power stipulated under Section 244 of the National Internal Revenue Code (NIRC).

Named respondents in the petition were BIR Commissioner Kim Jacinto-Henares and Finance Secretary Cesar Purisima. – Edu Punay, Artemio Dumlao