BIR Ruling [DA-260-96]

July 19, 1996 BIR RULING [DA-260-96] BGen. Manuel B. Camaclang (Ret.) Deputy Ombudsman for the Military 1610 J. P. Laurel Street, Malacaang Annex Bldg. San Miguel, Manila S i r : This refers to your Subpoena Duces Tecum requesting for certified xerox copies of the income tax returns of Chief Supt. Romeo Maganto covering the period from 1986 to 1994, in connection with Case No. CPL-96-0279, entitled: PNP NON-UNIFORMED & UNIFORMED PERSONNEL, ET. AL. versus CHIEF SUPT. ROMEO MAGANTO, for violation of R. A. 1379" pending before that Office. In reply, please be informed that Section 269 of the Tax Code, as amended, provides as follows: "SEC. 269. Unlawful divulgence of trade secrets . Except as provided in Section 64 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 fined in a sum of not less than five thousand pesos but nor more than ten thousand pesos, or imprisoned for a term of not less than six months but not more than five years, or both." Interpreting the aforequoted section of the Tax Code, the Secretary of Justice opined in Opinion No. 72, Series of 1991, that "xxx xxx xxx "The foregoing provision of law imposes penal sanctions upon any BIR official or employee who discloses 'information regarding the business, income, or estate of any taxpayer', 'knowledge of which was obtained by him in the discharge of his official duties', unless such disclosure comes within the purview of Section 64 of the Tax Code, which reads: "SEC. 64. Disposition of income tax returns; publication of lists of persons filing returns and paying taxes . After the assessment shall have been made, as provided in this Title, the returns together with any corrections thereof which may have been made by the Commissioner, shall be filed in the office of the Commissioner of Internal Revenue and 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 within sixty days from the date of the effectivity of this Code by the Secretary of Finance. "The Commissioner of Internal Revenue may in each year cause to be prepared and published in any newspaper and otherwise make available to public inspection upon written request and pursuant to regulations to be prescribed by the Secretary of Finance, lists containing the names and addresses of persons who have filed income tax returns with the amount of income declared and the income tax paid by each. The list of taxpayers for the preceding taxable year in each municipality or city shall be posted at the main entrance of the respective municipal building or city hall." "By the first paragraph of the aforequoted section of law, individual income tax returns 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 effected by the information contained in the return. (See Section 4 of Regulations No. 33 cited in de Leon, The National Internal Revenue Code Annotated, 1989 Ed., pp. 501-502; See also Vera vs. Cusi, Jr., 91 SCRA 153). "xxx xxx xxx Thus, it was held therein that a BIR official or employee who discloses to a Senate Committee an individual income tax return even in compliance with its Subpoena Duces Tecum is liable under Section 269 of the National Internal Revenue Code, as amended, because Regulations No. 33 enumerated the instances which individual income tax returns may be revealed, but disclosure to a Senate Committee is not among those instances. Accordingly, and in line with the said Opinion No. 72 of the Secretary of Justice, we regret to deny your request to produce the income tax returns for the years 1986 to 1994 of Chief Supt. Romeo Maganto because of the penal sanction imposed under the aforequoted Section of the Tax Code, as amended. Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue