Revenue audits which lead to criminal proceedings are placing accountants in a particularly difficult situation, Mr Denis Ryan, president of the Institute of Certified Accountants in Ireland (CPA), has warned. Such audits might hinder the existing strong level of voluntary co-operation between accountants and the Revenue, he said.

Speaking at the CPA annual dinner last night, he complained that there was an increasing risk of accountants becoming the Revenue's "star witness" in criminal proceedings against their own clients.

While the institute "does not condone tax evasion", the imposition of criminal proceedings into the tax code "has, in many cases, placed the professional adviser in an invidious position".

Mr Ryan noted that an "accountant who advises a client on voluntary disclosure could end up giving evidence in criminal proceedings brought by the Revenue against that client.

"Currently, any information gained by an accountant in assisting a client is not covered by `privilege'. In order for an accountant to work to best effect to promote compliance, he or she needs to be covered by `privilege' as lawyers are when advising clients", he said. He called on the Revenue to "correct this anomaly". He also said the Revenue should enter into negotiations with the accounting profession to ensure the continued smooth operation of the existing audit programme.

The present position, he warned, could become detrimental to the tax collection system. "Unless some clarity emerges," he said, "some clients will be reluctant to disclose their full situation to their accountant and, in the long run, this will lead to losses to the State in tax collected."