The Gazette 1975

Deputy would not wish to put the integrity of the solicitors' profession in doubt by suggesting that they should facilitate tax evasion. Mr. Colley: Can the Minister not visualise a situa- tion in which they are advising them as to what the law is and how to comply with it? Mr. R. Ryan: Yes, I have said that it is the duty of a solicitor to tell the client what the law is and that any action which he intends to take which is against the law is against the law. Mr. Colley: Or is not against the law, if it is not. Mr. R. Ryan: Yes. That is a solicitor's professional duty and that is what he is trained to do. Deputy Colley used the word "accountant". The word "accoun- tant" like the word "engineer" covers a multitude of activities. "Solicitor" is defined by law. They are the only profession to be statutorily defined as gentlemen. It has been said that was necessary or it would not be accepted. "Barrister" is also clearly defined by law. "Accountant" is not defined by law and if one includes accountants should one debar tax consultants, tax practitioners, some of whom may not have an accoun- tancy qualification of any kind? The word "accoun- tant" could be extended to book keepers just as "engineer" is a title sometimes assumed by mechanics. It is much too loose a term to use in a statute apart from other reasons why it should not be included at all. The law does not recognise that the same degree of confidentiality exists between accountants and their clients. The legal profession have a privileged position because it is the privilege of the clients which is being protected. That cannot be extended to activities which involve tax evasion and we could not contemplate ex- tending to the accountancy profession a privilege which does not apply to the legal profession nor could we entertain at this stage or in a Finance Act the ques- tion of what should be the appropriate area of confiden- tiality existing between accountants and their clients. If there is to be legislation to counter tax avoidance by means of transfer of assets abroad, the Revenue Commissioners must be empowered to seek information to enable them to establish whether an avoidance opera- tion has taken place. That is axiomatic. I trust nobody in the House would challenge that. As I said, the information which the Revenue Com- missioners will seek under section 59 ought to coine from the taxpayer himself. If he employs an accoun- tant or an agent to look after his tax affairs and to deal with the Revenue Commissioners on his behalf, there is no reason why the information, which in the ordinary way would be sought from the taxpayer, should not be sought from and given by his agent. There is no ques- tion of the accountant or the agent being required or expected to give the information without the tax- payer's knowledge. If the Revenue Commissioners seek information about tax avoidance operations from an accountant or agent, the accountant or agent will undoubtedly so notify the taxpayer and inform him that there is a legal obligation on him to furnish the information requested. If a taxpayer sets out to plan a tax avoidance device it would be expected that, in the course of the planning operation, his accountant or agent would advise him that the Revenue Commissioners were likely to look for

information about the operation. In the light of the purpose of the legislation, it is difficult to see why the Legislature should set up any barriers or obstacles to the implementation of the legislation by authorising a tax- payer's agent to withhold information or to refuse to give information in relation to avoidance operations. For these reasons I cannot accept the Deputy's amendment which would simply open the door to avoidance and evasion a year after we took action to close the door. The undesirable possibilities which Deputy Colley has illustrated here have not materialised in Britain in 39 years. I do not expect them to mater- ialise here. Considerable benefits have accrued to the Exchequer and consequently to the general body of taxpayers, because loopholes which facilitated avoid- ance by transfer of assets abroad were closed and be- cause the information net had a smaller mesh and was cast further. That is what this section in the 1974 Act achieved. It ensures a better supply of information. No person who is not liable to tax has anything to fear from the powers given to the Revenue Commis- sioners to collect information. The only person who may be disappointed if the sources of information to the Revenue Commissioners are improved are people who have a liability to pay tax and who avoid it by with- holding information which they have a clear statutory obligation to give and, indeed, a moral obligation as well. Democracy has long since asserted that every person should pay his fair share of tax. Democracy re- quires that the Legislature will provide the means whereby the Revenue Commissioners can ensure that everyone pays a fair share of tax. If we failed to give them that means we would be engaging in a sham and, quite frankly, I am not prepared to do that. Mr. Colley: The Minister said this amendment would open the door to avoidance and evasion. Evasion is always illegal and nothing in this section or this amendment affects in any way the position in relation to tax evasion. In regard to tax avoidance, when I was proposing this amendment I mentioned that I believed that the information which is being sought here from solicitors is available to the Revenue Commissioners anyway from other sources. Of course, it is perfectly obvious that, in order to be in a position to put a question about a particular taxpayer to a particular solicitor, the Revenue Commissioners must have some- thing to go on. They can put the question to the tax- payer and, if he gives false information, he leaves him- self wide open to very serious penalties. I indicated that I was not particularly tied to the wording of the amendment. I am conscious of the diffi- culties in regard to the definition of "accountants". The Minister is welcome to any point he wishes to make on that. What the Minister is glossing over very care- fully is the fact that this section as a whole, without this amendment or something on these lines, is taking away existing rights, existing privilege in the legal sense. He spoke as though it were granting such. Of course, it is not doing any such thing and the Minister knows that as well as anybody else. For very good, sound, historical and legal reasons, the relationship of a solicitor and client has a special posi- tion in law. It is true, of course, as the Minister says, that a lawyer has no privilege himself beyond the

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