A court ruling that maintains legal professional privilege solely for lawyers is "contrary to the public interest", according to the ICAEW.
The institute said it was disappointed with this morning's Court of Appeal decision, and would review its options.
"As it stands at the moment, the current position is anti-competitive for UK taxpayers and businesses. Whether they consult lawyers or chartered accountants, in our view clients who seek professional tax advice should be treated in the same way, irrespective of the qualification of the person," said Frank Haskew, head of the ICAEW tax faculty.
"We believe that the current situation is unsustainable and contrary to the public interest. However, the judges decided that they were bound by existing precedent and that only lawyers were entitled to LPP.
"As a professional body, we will be reviewing the options available to press the case for reforming the LPP rules so that there is a level playing field for taxpayers seeking tax advice."
The Law Society said the decision was "reassuring for clients and solicitors".
"The concept of LPP has been and remains closely tied to the administration of justice. The first duty of a solicitor, like other lawyers, is to the court and the second is to the client. In this respect lawyers are unique among the professions," said Law Society president Linda Lee.
"If LPP is to be extended beyond the advice of the legal professions it must be done via statute that clearly defines the limits and conditions of any extension both as to the areas of law or the professional adviser to ensure certainty as to the scope of its application."
The Court of Appeal hearing saw Prudential fight to keep advice it had received from tax advisers protected by LPP. HM Revenue & Customs wanted access to the advice.
The ICAEW made a representation to the court in favour of extending LPP. The Law Society presented a counter-argument.
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