BIR Ruling [DA-013-04]

January 12, 2004 BIR RULING [DA-013-04] Hon. Juanita T. Amatong OIC Secretary of Finance Manila M a d a m : We are forwarding herewith for your approval the herein claim for informer's reward of Mr. Carlos R. Isidro of No. 188 Mambog St., Malolos, Bulacan under Section 281(1) of the Tax Code, as amended, including the entire docket relative to the internal revenue tax case of Premiere Center for Fashion & Design, Inc. for the taxable years 1994 to 1996. The records show that on May 13, 1996, the informer submitted an Affidavit denouncing Premiere Center for Fashion & Design for non-remittance of the latter's withholding taxes for taxable years 1994 to 1996. The denunciation made by the informer, although in writing, was not in the form of a sworn statement as required under Revenue Memorandum Order (RMO) No. 12-93. When informed, the informer explained by way of affidavit that he was not aware of the procedures in the filing of confidential information as required under RMO 12-93. Considering that herein informer appears to be uneducated and not aware of the procedures required under RMO 12-93, this Office believes that his non-compliance with the rules implementing the informer's reward law may be dispensed with. Statutes offering rewards must be liberally construed in favor of informers and with mere technicality yielding to the substantive purpose of the law. ( Penid, et al. vs. Hon. Cesar Virata, et al., G.R. No. L-44004 ). On the basis of said Affidavit and documents submitted by the informer, Letter of Authority No. 237596 dated September 26, 1997 was issued by this Office to a group of Revenue Officers of the Special Investigation Division, Revenue Region No. 8, Makati City to investigate Premiere Center for Fashion & Design for withholding tax liabilities for the years 1994, 1995 and 1996. It was ascertained in the investigation that Premiere Center for Fashion & Design, Inc. had, indeed, committed the violations as averred by the informer. Accordingly, and on the basis of the recommendation of the investigating examiners contained in their Memorandum-report dated February 23, 2000, there were found withholding taxes due from Premiere Center for Fashion & Design, Inc. the total amount of P94,839.31 representing deficiency withholding and miscellaneous taxes, for the years 1994 to 1996, which was certified by the Chief, Revenue Accounting Division that the collections were verified and found included in the Makati RDC data file as representing payment of taxes as remitted per CRDC and Central Bank Credit Advice. The records further show that the information furnished by the informer was not yet in the possession of the Bureau of Internal Revenue nor is the aforesaid tax liability pending or previously investigated by any official or employee of this Bureau or by the Department of Finance; and that the informer is, as represented, not related to any internal revenue official or employee or to any public officer within the sixth degree of consanguinity. It appearing that the information furnished by Mr. Carlos R. Isidro was instrumental in the discovery of a violation of the internal revenue laws and in the recovery of taxes which otherwise would not have been effected, it is respectfully recommended that he be paid the amount equivalent to 15% of P94,839.31 or the amount of P14,225.89 as informer's reward pursuant to Section 282(A) of the 1997 Tax Code, the law applicable herein. HCTAEc Very truly yours, (SGD.) GUILLERMO L. PARAYNO, JR. Commissioner of Internal Revenue