C/Supt. Rodolfo B. Mendoza

February 6, 2007 BIR RULING [DA-072-07] C/Supt. Rodolfo B. Mendoza National Headquarters, Philippine National Police Directorate for Investigation and Detective Management Camp Crame, Quezon City S i r : This refers to your letter dated December 11, 2006 requesting this Office for copies of the business records of Chedy and Lucy Enterprises and the income tax return (ITR) of Lucy Shibuya and Shiego Shibuya as part of your agency's continuous monitoring of foreign nationals engaged in illegal business activities. It is represented that you have received information from public and private sector sources that Chedy and Lucy Enterprises , a business establishment owned by Lucy Shibuya and Shiego Shibuya, a Japanese national, is allegedly involved in the proliferation/distribution of expired and/or spoiled fire extinguishers. You now request this Office to furnish you, for reference purposes, any business records in our possession regarding the abovementioned enterprise as well as its authenticated records of ownership by Lucy and Shiego Shibuya. You also request us to furnish you with copies of these individuals' ITRs or any records concerning the legality of their establishment. In reply, please be informed that Section 270 of the Tax Code of 1997, as amended by Republic Act (RA) No. 9337, states the unlawful divulgence rule with regards to the treatment of information by BIR officials and employees. The said Section provides that: CIDcHA "SEC. 270. Unlawful Divulgence of Trade Secrets . Except as provided in Section 71 of this Code and Section 26 of Republic Act No. 6388, any officer or employee of the Bureau of Internal Revenue who divulges to any person or makes known in any other manner than may be provided by law information regarding the business, income, or estate of any taxpayer, the secrets operation, style or work, or apparatus of any manufacturer or producer, or confidential information regarding the business of any taxpayer, knowledge of which was acquired by him in the discharge of his official duties, shall upon conviction for each act or omission, be punished by a fine of not less than Fifty thousand pesos (P50,000) but not more than One hundred thousand pesos (P100,000), or suffer imprisonment of not less than two (2) years but not more than five (5) years, or both." Furthermore, in Opinion No. 72, Series of 1991, the Secretary of Justice opined that individual income tax returns under the first paragraph of the aforequoted Section " shall constitute public records and be open to inspection as such upon the order of the President of the Philippines under rules and regulations to be prescribed . . . by the Secretary of Finance " The existing rules on inspection of such returns provide that such inspection is allowed only to (a) BIR officials and employees whose official duties require such inspection; (b) the person who made the return, or his duly constituted attorney in fact; (c) the administrator, executor, or trustee of the taxpayer's estate or the duly constituted attorney-in-fact of such administrator, executor, or trustee, where the maker of the return has died; and (d) in the discretion of the Commissioner of Internal Revenue, one of the heirs of law or next of kin of such deceased person upon showing that he has a material interest which will be affected by the information contained in the return. EAIaHD Based on the foregoing, we regret to inform you that the nature of your request does not fall under any of the instances where records/information on a business establishment, as well as the ITRs of its owners/proprietors, may be revealed and as such, this Office is constrained to withhold such information pursuant to Section 270 of the same Tax Code. Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service