Lawyer/Client Confidentiality & Tax Time

It’s starting to be the “most wonderful time of the year” if you’re an accountant, which we are not. However, accountant or not, we all start to turn our minds to taxes as April looms closer & closer.

In August 2010, the Federal Government released details of its new reporting regime for aggressive tax planning that would require every “advisor” to report “reportable transactions” to the government. This means that if you’re discussing tax planning with your accountant, the government requires the accountant to report to them a possible issue.

This week the Canadian Bar Association received confirmation in writing from the Minister of Finance that Lawyer/Client confidentiality is not impacted by the above directive and all Lawyer/Client conversations remain privileged.

Many times accountants try to perform legal functions, this is another example of why you should use a lawyer to get legal advice. The lawyer can retain an accountant to obtain tax specific advice and this way, your conversations with your lawyer are confidential.

The point of this is not to encourage tax fraud. Our firm will not provide advice to anyone as to how to commit a crime. However, clients need to feel free to be able to ask questions without fear of investigation a la George Orwell’s 1984. If you don’t know what you are thinking is wrong, you should be able to learn that without being reported to the Government.

Inga B. Andriessen, J.D.