Home » RATE » BIR sues Lawyer and his CPA for substantial underdeclaration of income

BIR sues Lawyer and his CPA for substantial underdeclaration of income

Lawyer and CPA caught for tax evasion

The Bureau of Internal Revenue (BIR) today filed a criminal complaint with the Department of Justice against ATTY. ABELARDO G. LUZANO (ATTY. LUZANO) for willful attempt to evade or defeat tax and deliberate failure to supply correct and accurate information for taxable years 2009 and 2010 pursuant to Sections 254 and 255 of the National Internal Revenue Code of 1997, as amended (Tax Code).

Likewise charged was EVANEGELINE R. PADILLA-KHO (PADILLA-KHO), the independent Certified Public Accountant (CPA) who certified the Financial Statements of Atty. Luzano for 2009 and 2010, in violation of Section 257 of the Tax Code.

Atty. Luzano is a registered professional taxpayer with business addresses at 5/F Victoria I Bldg., 1670 Quezon Ave., Quezon City and/or Unit G 2/F Rizalina Bldg., II, 1675 Quezon Ave., Quezon City whose clients included Bank of the Philippine Islands (BPI), Banco De Oro Unibank (BDO), Asia United Banks Corporation (AUBC) and The Hongkong and Shanghai Banking Corporation Limited (HSBC).

An evaluation of the Alpha List of Income Payments submitted by the aforementioned banks together with BIR Form 1604E (Annual Information Return of Creditable Income Taxes Withheld) revealed that Atty. Luzano received income payments of P6.24 million and P8.40 million in 2009 and 2010, respectively.

Furthermore, BPI certified that it paid Atty. Luzano P2.83 million in 2009 and P4.56 million in 2010. Likewise, BDO certified that for 2009 and 2010, Atty. Luzano was paid P3.08 million and P3.73 million, respectively.

Compared against his gross income declaration with the BIR of P3.41 million in 2009 and P4.67 million in 2010, Atty. Luzano underdeclared his income by P2.83 million (83%) in 2009 and by P3.73 (80%) million in 2010. Investigation also disclosed that although Atty. Luzano filed his VAT returns for 2009 and 2010 (first 2 quarters), there were no payments made.

Atty. Luzano was assessed a total deficiency tax liability of P6.63 million, inclusive of surcharges and interests, broken down into: Income Tax – P1.72million (2009) & P2.03 million (2010); and VAT – P1.3o million (2009) & P1.58 million (2010).

Padilla-Kho, on the other hand, was included in the charge sheet for issuing an unqualified opinion in her certification of the 2009 and 2010 audited financial statements of Atty. Luzano despite knowledge of the existence of such income payments/underdeclarations.

The case against ATTY. ABELARDO G. LUZANO and CPA EVANEGELINE R. PADILLA-KHO is the 102nd filed under the Run After Tax Evaders (RATE) program of the BIR under the leadership of Commissioner Kim S. Jacinto-Henares.


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