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Tax evasion charges filed vs ex-chief justice

Posted on August 30, 2012 10:28:19 PM [ BusinessWorld Online ]
BY SIEGFRID O. ALEGADO, Reporter

FORMER CHIEF JUSTICE Renato C. Corona, his daughter and son-in-law were yesterday charged by the Bureau of Internal Revenue (BIR) with tax evasion totaling over ₱150 million.

Internal Revenue Commissioner Kim S. Jacinto-Henares told a briefing that Mr. Corona, who was ousted more than two months ago, was charged before the Justice department "for willful attempt to evade or defeat tax and for deliberate failure to file… income tax returns" for the years 2003-2005, 2007-2008 and 2010.

The same evidence -- Statement of Assets, Liabilities and Net Worth (SALN), deeds of sale, and bank accounts -- presented during Mr. Corona’s five-month impeachment trial were indicated by the BIR in its charge sheet.

Mr. Corona on May 29 was found guilty of betraying public trust for failing to declare his true SALN.

His tax deficiency has been set at ₱120.5 million, the BIR said in a statement.

The amount was arrived at "by comparing the increase in his net worth with his reported taxable income over time," it further noted

Also facing tax evasion charges were Mr. Corona’s daughter Ma. Carla Beatriz C. Castillo and husband Constantino T. Castillo III with alleged income tax liabilities of ₱20.24 million and ₱9.93 million, respectively.

The Castillos were dragged into the impeachment trial after the bureau found out that they bought certain properties named after Mr. Corona.

Mr. Corona allegedly earned more than what he declared, Ms. Henares said, noting the discrepancy in his declared income per alphalist (₱26.45 million) and true net worth (₱161.15 million). An alphalist indicates the list of employees, their compensation and taxes withheld.

A taxpayer is not required to file an income tax return (ITR) for purely compensation income under the BIR’s substituted scheme, but other income aside from compensation should be declared, the revenue agency said.

A BIR investigation further showed that Mr. Corona allegedly undervalued three of his properties and underdeclared cash by ₱17.3 million and ₱134.44 million, respectively, as well as failed to declare two other properties valued at ₱12.75 million.

The BIR also said Mr. Castillo supposedly "failed to file his ITR for taxable year 2003… and deliberately understated his ITR in the year 2009," while Ms. Castillo "failed to file an… ITR for the taxable year 2010."

The cases were filed as a result of the BIR’s Run After Tax Evaders program.

Mr. Corona, meanwhile, said he and his family "have long expected" the filing of charges, as they "have been exchanging communications with the BIR and have complied with their deadlines."

"As a man of law, I will abide by the processes… We will respond accordingly…," he said in a text message to reporters, adding that they are awaiting the service of subpoena and complaint.

"By the grace of God, we will overcome. This too will come to pass," Mr. Corona noted.

Mr. Corona was an appointee of then president now Pampanga Rep. Gloria Macapagal-Arroyo, but his assumption to the highest judicial post was rocked by controversy as it was done during an election ban on appointments. The appointment was, however, upheld by the Supreme Court which ruled that its justices are exempt from the constitutional restriction. He was impeached by the House of Representatives in December last year.
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KNOWING YOUR BIR REGULATIONS AND ISSUANCES

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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