BIR Ruling [DA-023-05]

January 19, 2005 BIR RULING [DA-023-05] Mr . Nicolas Y . Cervantes PNL Condo, 28a R. Aquino Comp. F. Ortigas St., Acasia Lane Mandaluyong City S i r : This refers to your letter dated January 18, 2005, the subject matter of which is your claim for informer's reward pursuant to Section 281 of the Tax Code of 1997, allegedly in the total amount of THIRTY-SIX MILLION PESOS (P36,000,000.00) in Confidential Information Nos. 2458 and 113-92. TAECSD In reply, please be informed that the payment of informer's reward is conditioned upon the payment and collection of unpaid or deficiency taxes. An informer is entitled by way of reward only to a percentage of the taxes actually assessed and collected. (Meralco Securities Corp. vs. Savellano, et al., L. 36181, Oct. 23, 1982). Since the collection of the deficiency capital gains and documentary stamp taxes can not as yet be effected as the same is under court litigation, your claim for payment of the corresponding informer's reward is, therefore, premature and can not be granted for lack of legal basis. Since the case is still pending with the Supreme Court, the respondent, if it opts, has still one last remedy which is the filing of a second Motion for Reconsideration. Granting for the sake of arguments, that it will not have its luck to overturn the previous verdicts, and this Second Motion for Reconsideration is dismissed for being baseless and proforma, the decision will become final after 30 days from which the 60 days period to enter the decision in the Books of Judgment will have to run. After its entry in the Book, it is now ripe for the docket to be requested back to this Bureau for the execution of the Judgment. Then, the BIR may collect from the taxpayer the total amount or may sell in a public auction those properties garnished or attached by Warrants of Distraint or Levy. It is only at this stage when the Bureau has successfully collected through the administrative proceedings, that the applicable percentage of whatever amount so collected which in your case is the 15%, be given to you. Very truly yours, (SGD.) JOSE MARIO C. BUAG Deputy Commissioner Legal and Inspection Group