BIR Ruling [DA-338-00]

September 8, 2000 BIR RULING [DA-338-00] Sec. 282 (A) Hon. Jose T. Pardo Secretary of Finance Manila S i r : We are forwarding herewith for your approval the herein claim for informer's reward of Mr. Felixberto Buenaventura under Section 282(A) of the Tax Code of 1997 including the pertinent records bearing on the internal revenue tax case of the late Moises Tapia for the year 1996. The records show that an affidavit was filed by the abovenamed informer on February 25, 1998 which was recorded as Confidential Information No. 13-98 denouncing Ms. Gloria Tapia, in her capacity as administratrix of the Estate of the late Moises Tapia, for filing false and fraudulent estate tax returns. He alleged that during his lifetime, Mr. Tapia granted a P6,000,000.00 loan to one Miguel Santos secured by a parcel of land as collateral; that after several years of litigation, the said loan was finally settled with the estate receiving P15,000,000.00 inclusive of interest and damages; and that the administratrix failed to include the said amount of P15,000,000.00 when she filed the estate returns of the decedent. On the basis of said confidential information, Letter of Authority No. 134132 dated April 19, 1998 was issued to a group of revenue officers of the Tax Fraud Division who immediately conducted an investigation of the case. It was ascertained in the investigation that the administratrix indeed failed to include the amount of P15,000,000.00 as part of the gross estate of the deceased and to file an income tax return and pay the income tax corresponding to the said P15,000,000.00 loan payment. Consequently, the investigating examiners proposed that the Estate of the late Moises Tapia be assessed in the amounts of P10,191,934.36 and P5,286,151.50 as deficiency estate and income taxes, inclusive of penalties and criminal prosecution of Ms. Gloria Tapia for various violations of the Tax Code. However, the criminal prosecution of Ms. Tapia was not pursued by this Office after considering her contentions that (1) there was lack or absence of due process in determining the tax liabilities of the estate; (2) the proposed assessment is of doubtful validity for being arbitrary, unjust and excessive; and (3) the imputation of fraud against her is only based on presumption. She voluntarily offered for a compromise settlement of the case by paying the amount of P1,500,000.00 which was accepted by this Office, which amount was paid by virtue of Authority To Accept Payment No. 00110514 at the Traders Royal Bank under Official Receipt No. 1668908 dated May 17, 1999. The records further show that the information furnished by the informer was in writing and under oath; that it was not yet in the possession of the Bureau nor are the aforesaid tax liabilities pending or previously investigated by any official or employee of the Bureau or by the Department of Finance; and that the informer is, as represented, not related to any internal revenue official or employee or any public officer within the sixth degree of consanguinity. TcDIEH It appearing that the information furnished by Mr. Felixberto Buenaventura was instrumental in the discovery of a violation of the internal revenue law and in the recovery of taxes which otherwise would have been effected, it is respectfully recommended that Felixberto Buenaventura be paid the amount of One hundred thirty-five thousand pesos (P135,000.00) as his net informer's reward after deducting the final withholding tax at the rate of ten percent (10%) pursuant to the penultimate paragraph of Section 282 of the Tax Code of 1997. Very truly yours, (SGD.) DAKILA B. FONACIER Commissioner of Internal Revenue