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The following post does not create a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. It is still best for you to engage the services of a lawyer or you may directly contact and consult Alburo Alburo and Associates Law Offices to address your specific legal concerns, if there is any.
Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
AT A GLANCE:
On September 12, 2022, the Bureau of Internal Revenue (BIR) issued Revenue Regulations (RR) No. 12-2022 to prescribe more definitive guidelines, procedures and requirements for the proper availment of the incentives granted to lawyers or professional partnerships that render actual free legal services under RA No. 9999 or otherwise known as the “Free Legal Assistance Act of 2010”.
RA No. 9999, which was approved on February 23, 2010, was enacted in accordance with the State’s policy to guarantee free legal assistance to the poor and ensure that every person who cannot afford the services of a counsel is provided with competent and independent counsel preferably of his/her own choice.
On March 8, 2010, the BIR issued Revenue Memorandum Circular (RMC) No. 23-2010 circularizing the full text of the Act for the information and guidance of all internal revenue officers, employees and others concerned. On March 8, 2013, the BIR issued RMC No. 26-2013 (Primer on BIR Form 1701, Item 63 and BIR Form 1702, Item 23) specifying that the incentive granted in the Act shall be treated as “Special Allowable Itemized Deduction.”
Incentives for rendering actual free legal services
Section 4 of No. 12-2022 provides that lawyers or professional partnerships rendering actual free Legal Services shall be entitled to an allowable deduction from the gross income equivalent to the lower of:
- the amount that could have been collected for the actual free Legal Services rendered; or
- ten percent (10%) of the gross income derived from the actual performance of the legal profession.
The actual free Legal Services shall be exclusive of the minimum sixty (60)-hour mandatory legal aid services rendered to indigent litigants as required under the Rule on Mandatory Legal Aid Services for Practicing Lawyers, under Bar Matter No. 2012, issued by the Supreme Court.
Required Certifications/Accreditations from Appropriate Government Agencies for the Availment of the Incentives
Section 5 of RR No. 12-2022 provides for the requirements to avail of the incentives, to wit:
SECTION 5. Required Certifications/Accreditations from Appropriate Government Agencies for the Availment of the Incentives.
In order to avail of the incentives provided in Section 4 of these Regulations, the lawyers or professional partnerships shall attach to their income tax return (“ITR”) for the period when the deduction was claimed the following documents:
a. Certification from the Public Attorney’s Office (PAO), the Department of Justice (DOJ) or accredited association of the Supreme Court indicating that:
- the Legal Services to be provided are within the services defined by the Supreme Court;
- the agencies cannot provide the Legal Services to be provided by the private counsel; and
- the Legal Services were actually undertaken.
The Certification from the association and/or organization duly accredited by the Supreme Court shall specify the number of hours actually provided by the Lawyer or professional partnership in the provision of the Legal Services
b. Accomplished BIR Form No. 1701 (for individual lawyers) or BIR Form No. 1702-EX (for general professional partnership), particularly Schedules 5 and 2, respectively, on “Special Allowable Itemized Deductions.”
c. Sworn Statement of the Lawyer or managing partner (in case of professional partnership) as to the amount that could have been collected for the actual free legal service.
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Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding legal services, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/ 0917-5772207/ 09778050020.
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