By Andrew J Maples and Michael Blissenden*

Legal professional privilege protects confidential communications between legal advisors and their clients from compulsory disclosure. In the taxation arena, this will include protection from disclosure to taxation authorities using coercive information-gathering powers. The common law privilege does not apply to the client-accountant relationship or to the tax advisor-client relationship where that tax advisor is not a lawyer. In 2005, New Zealand introduced a legislative regime to grant statutory privilege to confidential communications between accountants and their clients for the main purpose of providing or receiving tax advice. In 2008, the Australian Law Reform Commission (ALRC) recommended that Australia follow the New Zealand model and introduce a similar statutory regime. This article outlines both the ALRC proposal and the New Zealand client-accountant statutory regime. The rationale for the creation of a separate statutory privilege and the reasons for the rejection of the extension of the common law privilege to the client-accountant relationship are also considered. Finally, the article compares statutory privilege with legal professional privilege. This review highlights differences between the two forms of privilege and concludes that the practical level of protection afforded taxpayers claiming this new form of privilege is considerably less than common law privilege.

The full article can be accessed here: “The proposed client-accountant tax privilege in Australia: How does it sit with the common law doctrine of legal professional privilege?” (2010) 39 AT Rev 20.

*Andrew Maples is a Senior Lecturer in Taxation and Business Law, University of Canterbury; Michael Blissenden is a Senior Lecturer in Law, University of Western Sydney.