Self-employed may not be compelled to bare service charges for now

Published by rudy Date posted on June 3, 2014

The Supreme Court (SC) has issued a temporary restraining order (TRO) enjoining the Bureau of Internal Revenue (BIR) from enforcing regulations mandating lawyers and other self-employed professionals to disclose their standard service fees to the tax authorities.

The Court said it acted on the motion for leave of court to file intervention and the attached motion for intervention filed by the Philippine College Physicians by allowing the intervention and issuing a TRO “in favor of doctors this time.”

The Court earlier stopped the tax agency from enforcing BIR Circular 4-2014 (Guidelines and Policies for the Monitoring of Services Fees of Professionals) as far as this operated against lawyers.

Under the new BIR regulations, all self-employed professionals are required to submit an affidavit indicating the rates, manner of billings and the factors they consider in determining their service fees upon registration every year thereafter on or before January 31; register the books of accounts and official appointment books of their practice of profession which shall contain the names of the client and date or time of the meeting; to issue a BIR-registered receipt showing a 100-percent discount in cases when no professional fees are charged.

In its petition, the IBP asked the SC to declare null and void the new BIR regulation for being unconstitutional as it violates the doctrine of separation of powers of the three equal branches of the government.

The group said the guidelines would “encroach 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.”

He added the new rules do not conform to the ethical standards set by the High Court for the legal profession which emphasized 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. –Joel R. San Juan, Businessmirror

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