BIR Ruling

August 13, 1971 The Regional Director Revenue Region No. 11 Naga City S i r : This refers to your letter dated July 6, 1971 which is a follow-up of the letter dated May 13, 1971 of the Revenue District Officer of Masbate, requesting for a ruling as to whether the gathering of tax informations by BIR personnel from shipping agents and other sources, including government offices, at the time when no particular taxpayer is investigated constitutes violation of Section 357 of the Tax Code, as amended by Republic Act No. 6110, which provides that books of accounts shall be examined and inspected only once in a taxable year. In reply thereto, please be informed that the abovecited provision only prohibits multiple examination and inspection of books of accounts of taxpayer. It does not prohibit the gathering of information from other sources as evidence to support possible tax assessment against taxpayers. Moreover, fraud is present in case the tax information which can be the basis of a tax assessment is obtained from an outside source and the same is not entered in the books of accounts and, consequently, not declared in the tax returns. Under these circumstances, pursuant to Section 337 of the Tax Code, another examination and inspection of the books of accounts can be conducted. Finally, the gathering information existing in government offices against potential taxpayer is now sanctioned by Section 7-A of the Tax Code. cdi Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue