Construction Co. claiming fictitious purchases

The Bureau of Internal Revenue (BIR) today filed a criminal complaint with the Department of Justice against DQT BUILDERS CORPORATION (DQT) and its responsible corporate officers – Chairman/President ENGR. DOMINGO Q. TAN and Chief Financial Officer ROSALINA D. TAN – for one (1) count of attempt to evade or defeat payment of income tax by overstating its expenses by P70.27 million in 2007, one (1) count of attempt to evade or defeat payment of Value Added Tax (VAT) by overstating its purchases by P70.27 million in 2007, one (1) count of willful failure to supply correct and accurate information in its Income Tax Return (ITR) by overstating its expenses for taxable year 2007 and four (4) counts of willful failure to supply correct and accurate information in its VAT Return by overstating its purchases for taxable year 2007, all in violation of Section 254 and Section 255 of the National Internal Revenue Code of 1997, as amended (Tax Code).

DQT is a domestic corporation engaged in the general construction business, including the construction, enlarging, repairing, developing or engaging in any work upon buildings, house & condominium, roads, plants, bridges, airfields, pier, waterworks, railroads and other structures. DQT is located at Enverga cor. Merchan St., Lucena City, Quezon Province.

Using Summary Lists of Purchases and documents from the BIR LN Task Force, investigators discovered that DQT overstated its expenses in its ITR for taxable year 2007 and over-claimed input taxes in its VAT returns for 2007 by reflecting fictitious purchases amounting to P70.27 million. The sham purchases were confirmed by DQT’s alleged suppliers BSO Trading (PP13.62M), JP Tomas Construction Supply (P29.9M) and Cresar Enterprises (P26.75M) who, however, all denied having had any transaction with DQT.

Confronted with the said findings by the BIR, Engr. Domingo said that he paid the transactions in question in cash but nevertheless failed to produce the sales invoices showing said purchases. Under the Tax Code, for an expense to be deductible from taxable income, among others, it must be supported by receipts, records or other pertinent papers.

The scheme of DQT and respondents Domingo and Rosalina of claiming fictitious purchases – overstating expenses claimed against taxable income and over-claiming input taxes deducted from output taxes – reduced the income tax and VAT liabilities of DQT, to the prejudice of the government.

DQT is being sued for a total tax deficiency amounting to P76.52 MILLION, including surcharges and interest, for taxable years 2007, broken down as follows: P55.75M – Income Tax; and P20.77M – VAT.

The case against DQT BUILDERS CORPORATION (DQT) and its responsible corporate officers – Chairman/President ENGR. DOMINGO Q. TAN and Chief Financial Officer ROSALINA D. TAN – is the eighty-seventh (87th) filed under the Run After Tax Evaders (RATE) program of the BIR under the leadership of Commissioner Kim S. Jacinto-Henares.

Salon Operator not issuing ORs

The Bureau of Internal Revenue (BIR) today instituted criminal charges with the Department of Justice against JOAQUIN IGNACIO MORENO (MORENO) for two (2) counts of failure to issue registered receipts/invoices punishable under Section 264, in relation to ,Section 237, of the National Internal Revenue Code of 1997, as amended (Tax Code). MORENO is the owner/proprietor of JUAN CARLO SALON FOR MEN AND WOMEN (JCS) with business address at 268 McArthur Highway, Karuhatan, Valenzuela City. As owner/proprietor of JCS, he is obliged to issue official receipts/invoices to customers upon receipt of the payment for the services he rendered.

Records of investigation showed that JCS was subjected to surveillance activities pursuant to Mission Order (MO) No. 0007998 dated November 22, 2011 to verify whether the subject salon was complying with the invoicing requirements mandated by the Tax Code.

On November 22, 2011, two (2) BIR investigators acted as poseur customers who availed of the hair treatment services by JCS for P400.00 each. After paying the said amount, neither of them were given/issued the corresponding official receipts.

Thereafter, the investigators served the Mission Order and apprehended one (1) booklet of sales invoice belonging to the said salon. Investigators discovered that no invoice was issued on November 22, 2011 implying that no transaction/s supposedly occurred on that same day notwithstanding the receipt of payments amounting to P800 from the two poseur customers. The investigators also found out that duplicate copies of the invoices were blank but the originals were detached from the booklet.

The twin discoveries led to the conclusion that MORENO was not issuing the corresponding invoices for his services in violation of Section 264 of the Tax Code.

The case against JOAQUIN IGNACIO MORENO is the eighty-sixth (86th) filed under the Run After Tax Evaders (RATE) program of the BIR under the leadership of Commissioner Kim S. Jacinto-Henares. It is likewise a RATE case of Revenue Region No. 5, Caloocan City.

BIR caught a Great Wall

The Bureau of Internal Revenue (BIR) today filed a criminal complaint with the Department of Justice against GREAT WALL PROMOTIONALS CO. LTD., CARLITO N. PANCHO, FLORDELIZA M. CASIMIRO, GEORGE T. CO, JR. and ROBERTO T. CO – for willful attempt to evade or defeat tax and for deliberate failure to supply correct and accurate information in its Income Tax Return (ITR) for taxable year 2008, in violation of Section 254 and Section 255 of the National Internal Revenue Code of 1997, as amended (Tax Code). 

GREAT WALL is a partnership duly registered with the Securities and Exchange Commission (SEC) whose principal office is located at National Road, Sta. Cruz, Zambales.

Results of investigation showed that although the partners indicated in the Articles of Partnership are Pancho and Casimiro, they are mere dummies of George T. Co, Jr. and Roberto T. Co, who are the real principals of GREAT WALL as shown in the 2007 Mayor’s Permit issued by the Municipality of Sta. Cruz, Zambales and the SEC Registration Data Sheet obtained by the BIR.

Information gathered in the course of the investigation also disclosed that GREAT WALL had reported total sales of P1.47 million in its ITR and Quarterly Value Added Tax (VAT) returns for taxable year 2008. Verification of its reported income with Jollibee Foods Corporation, however, revealed that GREAT WALL received from the former income payment amounting to P266.48 million.

Comparing the information received from Jollibee with its declarations with the BIR, investigators discovered that GREAT WALL deliberately failed to declare its correct tax base by substantially underdeclaring its income for 2008 by 18,076.26% or by P265.01 million.

Under the Section 248 (B) of the Tax Code, a substantial underdeclaration of more than thirty percent (30%) constitutes prima facie evidence of fraud.

For taxable year 2008, GREAT WALL was slapped with a total deficiency tax assessment of P240.31 million, inclusive of surcharges and interests, broken down into: P173.81 million – Income Tax; and P66.50 million – VAT.

The case against GREAT WALL PROMOTIONALS CO. LTD., CARLITO N. PANCHO, FLORDELIZA M. CASIMIRO, GEORGE T. CO, JR. and ROBERTO T. CO is the eighty-fifth (85th) filed under the Run After Tax Evaders (RATE) program of the BIR under the leadership of Commissioner Kim S. Jacinto-Henares.

Captured Webbs

The Bureau of Internal Revenue (BIR) today filed a complaint-affidavit with the Department of Justice against FRITZ P. WEBB and KATHERINE P. WEBB for failure to issue registered receipts punishable under Section 264, in relation to Section 237, of the National Internal Revenue Code of 1997, as amended (Tax Code). 

FRITZ and KATHERINE are the President/Partner and Treasurer, respectively, of Basement Salon Corporation (Basement Salon) with business address at 2^nd Level, Power Plant Mall, Rockwell Center, Poblacion, Makati City. Most of their customers belong to the middle and upper class of society.

Records of investigation showed that Basement Salon was subjected to surveillance activities for several days pursuant to Mission Order (MO) No. MS02001 00076631 dated November 21, 2011 to establish whether or not the subject corporation was complying with the invoicing requirements mandated by the Tax Code.

On November 24, 2011, BIR investigators served the MO and thereafter apprehended twenty-five (25) Job Order Slips and One (1) Booklet of Official Receipts belonging to the said salon.

The investigators found that out of the 25 Job Order Slips that were issued on November 24, 2011, only two (2) were issued the corresponding official receipts – one to an unnamed customer in the amount of P1,210.00 and the other to a certain Chini Salonga for P6,000.00.

The discovery that only two official receipts were issued showed that payments for the remaining 23 transactions were not issued the corresponding receipts leading to the conclusion that respondents have been issuing receipts only upon demand of their customers despite the mandatory requirement of the law requiring persons subject to an internal revenue tax to issue receipts or sales or commercial invoices.

The case against Basement Salon Corporation and its responsible corporate officers FRITZ P. WEBB and KATHERINE P. WEBB is the eighty-fourth (84th) filed under the Run After Tax Evaders (RATE) program of the BIR under the leadership of Commissioner Kim S. Jacinto-Henares. It is likewise a RATE case of Revenue Region No. 8, Makati City.

via tomtax: Replacement of Lost TIN Card.

Typhoon Sendong : Report Business Losses within 45 days

Collecting PhP101B more than the previous year, gives BIR a good reason to smile about and welcome a very Happy New Year.

As of November 2011, the taxes collected by the Bureau of Internal Revenue have bested last years’ performance by more than PhP101 billion. 

From January to November this year, internal revenue generated by the BIR has reached PhP854.5 billion. Compared to the taxes generated during the same period last year, which amounted to PhP753.3 billion, this year’s performance have shown a marked improvement growing by more than 13.4% year-on-year.

For the month of November alone, the Bureau’s collections reached PhP92.7 billion. This figure is also PhP10.3 billion greater than the taxes generated for the same month last year when the BIR collected a total of PhP82.4 billion. Growth for November reached 12.5% year-on-year.

After 11 months, the BIR has kept itself abreast with the target. From January to November the Bureau’s target is placed at PhP860.3 billion. With this, actual collections are down by only 0.68% or by about PhP5.8 billion in cumulative terms.

Commissioner Kim Henares remains hopeful that the year-end target of the Bureau could still be met. While the deficit may seem small in percentage terms, she prefers to look at the collection shortfall in terms of value “my people at the BIR are fully focused on recouping the 5.8 billion deficit by the end of December”.

*Results are inclusive of collection from PEACE bond.

The Bureau of Internal Revenue (BIR) today filed a criminal complaint with the Department of Justice against AVELINO R. AW-YONG for two (2) counts of willful attempt to evade or defeat payment of income tax, and two (2) counts of willful failure to supply correct and accurate information in his Income Tax Returns for taxable years 2009 and 2010, in violation of Section 254 and Section 255 of the National Internal Revenue Code of 1997, as amended (Tax Code). 

AW-YONG is the owner/proprietor of ILOILO IZEEM COMMERCIAL located in Mabini Street, Iloilo City. He is engaged in the retail/wholesale of office supplies and equipment.

Investigation showed that AW-YONG received income payments amounting to P20.33M for taxable year 2009 and P23.43M for taxable year 2010. The said amounts were summed up from information gathered from various government agencies, offices, schools, universities, and other private institutions which had sales transactions with AW-YONG.

A verification of the Income Tax Returns of AW-YONG covering the same taxable years showed, however, that he only declared sales amounting to P5.87M and P6.39M for taxable years 2009 and 2010, respectively.

Investigators compared the amounts gathered from third party information with the declarations made by the subject businessman with the BIR and found a huge discrepancy in sales of more than 30% amounting to P14.46M (246.35%) in 2009 and P17.04M (266.57%) in 2010.

Under Section 248 (B) of the Tax Code, a substantial underdeclaration of more than thirty percent (30%) constitutes prima facie evidence of fraud.

Total deficiency income tax assessment against AW-YONG for the two-year period 2009-2010 amounted to P18.12M, inclusive of surcharges and interest, broken down as follows: 2009 – P8.31M; and 2010 – P9.81M.

The case against AVELINO R. AW-YONG is the eighty-third (83rd) filed under the Run After Tax Evaders (RATE) program of the BIR under the leadership of Commissioner Kim S. Jacinto-Henares. It is likewise the second (2nd) RATE case of Revenue Region No. 11, Iloilo City.

RATE in pans Gold Trader

The Bureau of Internal Revenue (BIR) today filed with the Department of Justice (DOJ) a criminal complaint against a Cebu City gold trader – JUNRIE DAITOL TENORIO – for five (5) counts of willful attempt to evade or defeat tax, fifteen (15) counts of willful failure to file Quarterly Income Tax Returns (ITRs), and five (5) counts of willful failure to file Annual ITRs for taxable years 2005, 2006, 2007, 2008 and 2009, in violation of Section 254 and Section 255 of the National Internal Revenue Code of 1997, as amended (NIRC). 

TENORIO is a resident of 2170 Tambis St., Guadalupe, Cebu City (South). He is registered with Revenue District Office No. 82, South Cebu City, as a taxpayer earning purely compensation income.

Sometime in May 2011, the Bangko Sentral ng Pilipinas (BSP) sent to the BIR a list of individuals who had gold transactions with the BSP, together with the Letter of Authorization executed by TENORIO and Letters of Delivery and Sales (LDS) relative to the said gold transactions. The said documents disclosed that TENORIO sold gold to BSP amounting to P3.95 billion during the five (5) year period in question.

Despite receiving taxable income from his gold transactions with the BSP, however, TENORIO failed to file his Annual ITRs for taxable years 2005 to 2009. Not only did he fail to file the required tax returns, he also did not pay his income taxes due on the said taxable years.

TENORIO was assessed deficiency income tax for taxable years 2005 to 2009 in the estimated aggregate amount of P2.67 billion, inclusive of surcharges and interests.

The case against JUNRIE DAITOL TENORIO is the eighty-second (82nd) filed under the Run After Tax Evaders (RATE) Program of the BIR under the leadership of Commissioner Kim S. Jacinto-Henares.

BINALOT gets padlocked by Oplan Kandado

The Bureau of Internal Revenue (BIR) padlocked BINALOT FIESTA FOODS RESTAURANT last November 29, 2011 for acts constituting violations of the National Internal Revenue Code of 1997, as amended (Tax Code), as amended. 

BINALOT was shuttered for failure to register as a Value Added Tax (VAT) taxpayer, failure to issue sales invoices or receipts, failure to file VAT return and failure to report taxable transactions pursuant to Section 115 of the Tax Code as implemented by Revenue Memorandum Order No. 3-2009 dated January 15, 2009.

The said restaurant is operated by BINALOT FIESTA FOODS, INC. whose principal office is located at 3841 Daffodil St., Sun Valley Subdivision, Parañaque City.  The corporation is a Filipino quick service restaurant that serves popular Pinoy dishes wrapped and served in banana leaves as a substitute to the non-biodegradable styro box.

BINALOT was also cited for attempt to evade or defeat tax, failure to file income and VAT returns and pay the taxes due thereon and perjury, among others.

The closure stemmed from the results of the inspection/verification conducted by Revenue Officers of Revenue District Office No. 43A-East Pasig City pursuant to Mission Order No. MSO 200184750 dated July 25, 2011.

A 48-Hour Notice was issued by Revenue District Office No. 43A-East Pasig City informing the subject taxpayer of the findings of its investigating officers and to make the necessary rectifications which it failed to make. A Five (5)–Day VAT Compliance Notice was issued thereafter and again, the taxpayer failed to comply with the requirements of the said VAT notice.

The failure of the subject corporation to comply with the above notices led to the issuance of a Closure Order signed by BIR Operations Group Deputy Commissioner Nelson M. Aspe on November 28, 2011.

The closure of BINALOT was led by Revenue District Officer Florante R. Aninag and Revenue Region No. 7, Quezon City Regional Director Jonas DP. Amora, together with Group Supervisor Ramon D. Navarro and his Revenue Officers who developed the case against BINALOT.

The case of BINALOT FIESTA FOODS RESTAURANT is part of the Oplan Kandado program of the BIR under the leadership of Commissioner Kim S. Jacinto-Henares.