The Bureau of Internal Revenue (BIR) today filed a criminal complaint with the Department of Justice against ELVINARIO A. VALENZUELA (VALENZUELA) for willful attempt to evade or defeat payment of tax and for willful failure to file his Income Tax Returns (ITR) for Taxable Years (TY) 2009 and 2010, in violation of Section 254 and Section 255 of the National Internal Revenue Code of 1997, as amended (Tax Code).
Respondent VALENZUELA, is a registered taxpayer of Revenue District Office No. 33, Ermita-Malate-Port Area with address at No. 1227 Ma. Orosa St., Brgy. 670, Zone 072, Ermita, Manila.
In 2009, investigators of the BIR discovered that VALENZUELA spent P1.19 million and P0.41 million for the purchase of a Toyota Hi-Ace Grandia 2007 and a Nissan Patrol 1994, respectively. In 2010, his expenditures included the acquisition of a Hummer H2 2003 and a Toyota Dyna Fire Truck 2010 worth P3.15 million and P0.8 million, respectively, purchase of a P3.2 million Grandview Condominium with Parking Slot, investment in Stocks worth P62,500.00, capital investment in Elvinario’s Restaurant valued at P0.5 million and payments of rentals based on a contract of lease amounting to P0.3 million.
Using the expenditure method of investigation, VALENZUELA’s taxable income for TY 2009 was determined at P1.6 million and P8.01 million for 2010. Investigators, however, discovered that VALENZUELA failed to file his ITRs for TY 2009 and 2010 despite receiving income for the said taxable years.
The expenditure method proceeds from the theory that where the amount of money which a taxpayer spends during a given year exceeds his reported income, and the source of such money is otherwise unexplained, it may be inferred that such expenditures represent unreported income. The expenditure method is often used on a taxpayer who spends his income on lavish living and has little, if any, networth.
For his acts and omissions in violation of the Tax Code, VALENZUELA was sued for a total income tax liability for taxable years 2009 and 2010 amounting to P5.77 million, inclusive of surcharges and interests, broken down as follows: 2009 – P0.97 million; and 2010 – P4.8 million.
The case against ELVINARIO A. VALENZUELA is the 132nd filed under the Run After Tax Evaders (RATE) program of the BIR under the leadership of Commissioner Kim S. Jacinto-Henares.