The History of Legal Professional Privilege and its Role in Tax Advice by Tax Professionals

This paper contends that the taxpayers' right to confidentiality plays a pivotal role in enabling taxpayers to be candid in consultations with their tax adviser, and that this right should attract equal protection notwithstanding the professional classification of the tax adviser. The emphasis is on balancing the revenue authorities' power to enable the collection of necessary revenue as efficiently and equitably as possible with the need to protect the taxpayer from unnecessary intrusion. The paper outlines the historical development of legal professional privilege, from the Elizabethan concept of confidentiality to the traditional privilege as the right of the client in a complex legal system. A number of rationales for the privilege are discussed and the applicability of the rationales to tax accountants is explored. Finally it outlines the current state of play of legal professional privilege in the tax arenas of Australia, Canada, New Zealand, the United Kingdom and the United States of America