Atty. Honorio A. Todiño

April 30, 2010 BIR RULING [DA-(S270-001) 059-10] Sec. 270; BIR Ruling No. 108-97; DA-088-07; DA-056-07 Atty. Honorio A. Todio No. 2233 Gen. G. Del Pilar, Singalong, Manila Sir : This refers to your letter dated July 23, 2009, requesting, on behalf of your client who is a confidential informer, information on the major oil companies that are the subjects of his denunciation. The request is related to information on the application by the said oil companies of tax amnesty under Republic Act No. 9480 or the "Tax Amnesty Act of 2007". It is your position that your client is not covered by the prohibitions mandated by Section 269 of the Tax Code and that Department Order No. 29-07 (Rules & Regulations Implementing Republic Act No. 9480). In reply, please be informed that Section 270 (then Section 269) of the 1997 Tax Code, as amended states the unlawful divulgence rule with regard to the treatment of information by BIR officials and employees. The said Section provides that: "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." (underscoring supplied) IHaSED It is evident from the above provision that BIR personnel cannot divulge information gained from taxpayers concerning the latter's business, income, or estate as well as the secrets, operation, style or work, or apparatus of any manufacturer or producer, or confidential information regarding the business of any taxpayer. Any documents containing these types of information in the BIR's possession are not considered as public documents but are in fact treated as confidential, in accordance with Section 270 of the same Tax Code. There are two kinds of information that are protected by Section 270 of the Tax Code: 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 a BIR officer or employee in the discharge of his/her official duties. Thus, information does not need to be ostensibly confidential for the same to come under the protection of Section 270. As long as such information in the BIR's possession is relevant to a taxpayer's business, income, or estate, it will certainly be subject to the unlawful divulgence rule under Section 270 and this includes the CGTR and other documents relative to the transfer of Fit & Son's property. (BIR Ruling No. DA-088-07 dated February 13, 2007) BIR Ruling No. DA-056-07 dated January 31, 2007 has reiterated the Opinion No. 72, to wit: "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." In relation to this is Section 9 of R.A. No. 9480 otherwise known as the Tax Amnesty Act of 2007, which penalizes disclosure of information relative to the Tax Amnesty Return and SALN filed under said law, to wit: AcHCED "SECTION 9. Unlawful Divulgence of Tax Amnesty Return and Statement of Assets, Liabilities and Networth. Except as otherwise provided herein and in Section 14 hereof, it shall be unlawful for any person having knowledge of the Tax Amnesty Return and SALN filed pursuant hereto, to disclose any information relative to such declaration and statement, and any violation hereof shall subject the offender to the penalties under Section 10 (c) of this Act: Provided, however, That the Commissioner of Internal Revenue may disclose the content of the Tax Amnesty Return and the SALN upon the request of Congress pursuant to and in accordance with Section 20(A) or Section 290 of the National Internal Revenue Code of 1997, as amended." In view of the foregoing, the requested information of the taxpayer falls under confidential information which BIR personnel cannot divulge pursuant to Section 270 of the 1997 Tax Code as well as Section 9 of the Tax Amnesty Act of 2007. Very truly yours, Commissioner of Internal Revenue By: (SGD.) GREGORIO V. CABANTAC Deputy Commissioner Legal and Inspection Group