Hon. Augustus C. Diaz

September 15, 2008 BIR RULING [DA-(OSL-006) 219-08] R.A. 9480; RMC 69-2007 Hon. Augustus C. Diaz Presiding Judge Metropolitan Trial Court, Branch 37, Quezon City Sir : This refers to the Order dated May 28, 2008 issued by the Metropolitan Trial Court (MeTC) of Quezon City Branch 37 in Criminal Case No. 37-138782 entitled "People of the Philippines vs. Lin, Cheu Min Y." requesting opinion regarding the availment of the accused therein of provisions of R.A. No. 9480 or the Tax Amnesty Law. cDAITS It is represented that during the hearing of the above-entitled case there was a manifestation that BIR-Valenzuela City had issued a Letter of Authority to the accused taxpayer and the accused has availed of the Tax Amnesty Law therefor; that there was also a manifestation that there is a pending investigation being conducted by the National Investigation Division (formerly Tax Fraud Division) of the BIR; and that the Trial Court is in need of an opinion regarding the circumstances for the proper disposition of the case. In reply, please be informed that upon verification with the personnel in custody of criminal cases in the Metropolitan Trial Court (MeTC) of Quezon City Branch 37, it was found that the criminal case entitled "People of the Philippines vs. Lin, Cheu Min" (Criminal Case No. 37-138782) is for violation of Section 5 penalized under Section 266 1 in relation to Sec. 253 and 256 of the Tax Reform Act of 1997. This offense is covered under Chapter II, Title X of the 1997 Tax Code, as amended. Republic Act (R.A.) No. 9480 otherwise known as "An Act Enhancing Revenue Administration and Collection by Granting an Amnesty on All Unpaid Internal Revenue Taxes Imposed by the National Government for Taxable Year 2005 and Prior Years" became effective June 16, 2007 and that its Implementing Rules and Regulations was issued by the Department of Finance on August 15, 2007. One of the benefits and privileges accorded to a taxpayer who is qualified to apply under the provisions of the Tax Amnesty Law is immunity from the payment of taxes, as well as the appurtenant civil, criminal or administrative penalties under the National Internal Revenue Code of 1997, as amended, arising from the failure to pay any and all internal revenue taxes for taxable year 2005 and prior years. 2 The tax amnesty under R.A. 9480 shall cover all national internal revenue taxes for the taxable year 2005 and prior years, with or without assessments duly issued therefore, that have remained unpaid as of December 31, 2005 with the provision that the amnesty authorized and granted shall not cover persons or cases enumerated under Section 8 thereof. 3 Section 8 of the aforementioned law in turn expressly provides for the exceptions to its applicability, to wit: "Sec. 8. Exceptions. The tax amnesty provided in Section 5 hereof shall not extend to the following persons or cases existing as of the effectivity of this Act: 1. Withholding agents with respects to their withholding tax liabilities; 2. Those with pending cases falling under the jurisdiction of the Presidential Commission on Good Government; 3. Those with pending cases involving unexplained or unlawfully acquired wealth or under the Anti-Graft and Corrupt Practices Act; 4. Those with pending cases filed in court involving violation of the Anti-Money Laundering Law; IaAEHD 5. Those with pending criminal cases for tax evasion and other criminal offenses under Chapter II of Title X of the National Internal Revenue Code of 1997, as amended, and the felonies of frauds, illegal exactions and transactions and malversation of public funds and property under Chapters III and IV of Title VII of the Revised Penal Code; and 6. Tax cases subject of final and executory judgment by the courts." (Emphasis supplied) It is clear then that when the criminal case is covered in any of the above-enumerated exceptions, accused taxpayer shall neither be able to avail of the Tax Amnesty Law nor be allowed to obtain the benefits and privileges granted under the same. Based on the foregoing, the offense for which the accused taxpayer has been indicted falls within the exception stated in No. 5 of the foregoing Section. Thus, if the taxpayer availed of the Tax Amnesty in relation to Criminal Case No. 37-138782 pending before the MeTC Quezon City, Branch 37, the tax amnesty has no effect in the prosecution thereof since the case already exists at the time of his application. The criminal case shall continue to be tried and heard. However, if the taxpayer availed of the Tax Amnesty Law in relation to another unpaid tax assessment for which the BIR issued a Letter of Authority, then the tax amnesty shall be applicable, subject to approval of the BIR, to that pertinent assessment and will not have any consequence to the case pending before MeTC. EaHIDC This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts as represented are different, then this ruling shall be considered null and void. Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service Footnotes 1. Sec. 266. Failure to Obey Summons. 2. Sec. 6 (l), R.A. No. 9480. 3. Sec. 1, R.A. No. 9480.