BIR raps doctor, lawyer, firm for evading P1.95-billion taxes

04/13/2012 [ tribune.net.ph ]

The Bureau of Internal Revenue (BIR) yesterday filed P1.95 billion worth of tax evasion cases against a doctor, a lawyer and his accountant and a packaging container manufacturer at the Justice Department.

Charged were Jedvam Manufacturing Corp. and its responsible corporate officers, Henry Chua Yu, president, Norberto Duque, treasurer, and Joseph Yu, import manager, for failing to pay taxes in 2007 and 2008 even after the BIR had demanded for the payment.

Jedvam Manufacturing Corp., a manufacturer of packaging containers such as papers, kraftliner boards and corrugated boards including yarn, plastic resins among others, was issued a letter of authority for an investigation in August 2009. The company was then served several notices and a final assessment notice was issued to it on January 13, 2012 which it did not respond to, making the final assessment notice final, executory and demandable within 30 days of receipt.

The BIR sought data from the Bureau of Import Services and the Bureau of Customs on the company’s activities that showed that it had imported a total of P4.99 billion of resins from 2007 to 2008.

The BIR reconstructed the gross income of Jedvam based on the evidence it gathered and computed Jedvam’s deficiency tax at P1.93 billion for 2007 and 2008.

The BIR is also charging Dr. Salvador Gundayao Austria for violating sections 254 and 255 of the National Internal Revenue Code. Austria owns several real properties in Olongapo City and along Tomas Morato in Quezon City and buys, sells and leases properties but is not registered as a VAT taxpayer.

Based on the BIR’s investigation, Austria leased a property in Quezon City to HUBB Manufacturing Incorp. for P180,000 monthly from 1999 to 2009. He declared a total gross income of only P1.43 and did not declare P13.69 million. He also did not file any income tax returns for 2002, 2003 and 2005 nor did he file value added tax returns from 1999 to 2005.

The BIR computed Austria’s total tax deficiency at P13.69 million, including surcharge and interest, from 1999 to 2005.

The BIR also filed tax charges against Atty. Abelardo Luzano for violating sections 254 and 255 of the NIRC in 2009 and 2010. Luzano’s clients included the Bank of Philippine Islands, Banco de Oro Unibank Inc., Asia United Bank Corp. and the Hongkong and Shanghai Banking Corp. for 2009 and 2010.

The banks paid Luzano at least P14.65 million for his services in the two-year period but he declared only P8.09 million. Luzano also did not pay value added tax for 2009 and the first two quarters of 2010.

The BIR computed Luzano’s total deficiency tax for 2009 and 2010 at P6.63 million including surcharge and interest.

The BIR is also filing charges against Evangeline Padilla-Kho, the independent certified accountant that certified lawyer Luzano’s financial statements for 2009 and 2010 and issued an unqualified opinion in his audited financial statements for the two years despite knowledge of the existence of income payments from the banks.

BIR cites Tan as model taxpayer

(The Philippine Star) Updated April 12, 2012 12:00 AM 
MANILA, Philippines - For top businessmen and entrepreneurs, he’s a taipan. For foundations and non-government organizations, he’s a philanthropist. But for the Bureau of Internal Revenue, he might as well be deemed as their number one guy, since he’s their model taxpayer.

BIR deputy commissioner Nelson Aspe wrote Megaworld chairman & CEO Andrew Tan recently, thanking him “for expressing support for the BIR’s continuing tax campaign to shore up much needed revenue for the government.”
Aspe also congratulated Tan for recording P98,586,296.35 in individual income tax payments for fiscal year 2010, including final taxes paid on dividend income. “With this accomplishment, you are ranked number one in our latest tally of individual taxpayers with the highest income tax payments actually received in cash for the taxable year 2010,” the commissioner declared.
Now that it’s tax season once again, perhaps the BIR needs a role model taxpayer like this business tycoon to remind corporations and individuals of their tax obligations and to settle the same honestly and dutifully.

Early tax return filing urged with April 15 deadline near

Posted on April 09, 2012 11:14:53 PM [ BusinessWorld Online ]

TAXPAYERS should move to file their income tax returns (ITR) before the annual deadline, the tax chief said, with new forms and stringent rules to be implemented by the Bureau of Internal Revenue (BIR) this year.

Individual and corporate taxpayers are required to submit their annual ITRs, covering their taxable income in 2011, on or before April 16. The deadline normally is April 15 but that date falls on a Sunday this year.

“We are urging all taxpayers to file their ITRs as early as now. We will strictly enact the rules,” BIR Commissioner Kim S. Jacinto-Henares said in a phone interview last week.

She cited Revenue Regulations 4-2012, issued on March 28, disallowing the abatement of penalties and interest on taxpayers who submit their ITRs a day late due to a failure to beat bank cutoff times.

“There will be no more amnesty for them. A deadline is a deadline. Taxpayers have all the chances to file their ITRs even before April 16,” Ms. Henares declared.

Authorized agent banks will even be open on Saturdays this month, while weekday operations will continue until 5:00 p.m., she added.

Meanwhile, Revenue Memorandum Order 3-2012, dated March 22, clarifies that only selected government officials and employees will be allowed to file their ITRs outside of their registered Revenue Districts.

Members of the Armed Forces of the Philippines and the Philippine National Police, as well as public school teachers, professors and instructors, can submit their returns in any authorized bank even outside the jurisdiction of their home Revenue District Offices (RDO).

“This order... shall only cover returns filed by the above taxpayers on or before April 16, 2012. Thereafter, ITRs... shall be filed only with the RDO where they are registered,” the issuance states.

A new set of ITR forms -- 1700, 1701 and 1702 -- will also be used for the filings.

There are no major changes for individual taxpayers except for a section on passive income. They can disclose their gains from rent, royalties and interest income but this is optional.

Corporate taxpayers, on the other hand, will be mandated to identify their different lines of businesses, break down their respective tax treatments and identify the tax incentives availed.

“To help taxpayers get used to the new ITR forms, they are uploaded on the BIR website. They are also interactive, so they can just fill it up with the necessary information, and the taxes will automatically be computed,” Ms. Henares said.

The BIR chief, though, offered this rule of thumb, especially for first-time taxpayers: “If you are in doubt of any income you received, just report and declare it. If you cannot substantiate your expense, and it is not related to your business, you cannot deduct it.”

Tammy H. Lipana, chairperson of the Philippine Chamber of Commerce and Industry tax committee, also urged taxpayers to scrutinize their disclosures and ensure that they pay the correct amount of taxes.

“It is better to be safe than sorry. As we have seen last year, the BIR is very serious about going after tax evaders,” she said in a phone interview.

If there are any errors in the ITR, the taxpayer should immediately amend it with the BIR and pay the penalties. Once a letter of authority has been issued to investigate an erroneous ITR, corrections will no longer be accepted, she explained.

For her part, Lina P. Figueroa, a principal at Punongbayan & Araullo, stressed that taxpayers should even keep track of minor details in their ITRs.

In particular, individuals who changed employers or addresses should verify their taxpayer identification numbers to ensure that they file at the correct RDO.

“Filing with the wrong venue or RDO is subject to a 25% penalty, though this can also be applied for abatement,” Ms. Figueroa said in an e-mail.

Tax requirements also tend to vary among banks that accept payments.

“For example, under the rules, they should be able to accept either personal/company checks or manager’s checks. But some banks accept only manager’s checks,” Ms. Figueroa said.

Some banks also demand proof of BIR registration while others keep a copy of the ITRs for their records, so taxpayers should prepare extras.

Lastly, taxpayers should be able to trace all information declared in their tax returns to their books. This will facilitate a swift investigation in case the BIR conducts an audit, Ms. Figueroa said. -- Diane Claire J. Jiao

Revenue Regulations (RRs)
are issuances signed by the Secretary of Finance, upon recommendation of the Commissioner of Internal Revenue, that specify, prescribe or define rules and regulations for the effective enforcement of the provisions of the National Internal Revenue Code (NIRC) and related statutes

Revenue Memorandum Orders (RMOs) are issuances that provide directives or instructions; prescribe guidelines; and outline processes, operations, activities, workflows, methods and procedures necessary in the implementation of stated policies, goals, objectives, plans and programs of the Bureau in all areas of operations, except auditing.

Revenue Memorandum Rulings (RMRs) are rulings, opinions and interpretations of the Commissioner of Internal Revenue with respect to the provisions of the Tax Code and other tax laws, as applied to a specific set of facts, with or without established precedents, and which the Commissioner may issue from time to time for the purpose of providing taxpayers guidance on the tax consequences in specific situations. BIR Rulings, therefore, cannot contravene duly issued RMRs; otherwise, the Rulings are null and void ab initio

Revenue Memorandum Circular (RMCs) are issuances that publish pertinent and applicable portions, as well as amplifications, of laws, rules, regulations and precedents issued by the BIR and other agencies/offices.

Revenue Bulletins (RB) refer to periodic issuances, notices and official announcements of the Commissioner of Internal Revenue that consolidate the Bureau of Internal Revenue's position on certain specific issues of law or administration in relation to the provisions of the Tax Code, relevant tax laws and other issuances for the guidance of the public.

BIR Rulings are official position of the Bureau to queries raised by taxpayers and other stakeholders relative to clarification and interpretation of tax laws.
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