Public Attorney's Office

September 15, 2009 BIR RULING [DA-(S270-003) 545-09] Sec. 270; DA-072-07 Public Attorney's Office Caloocan City District Office 4th Floor Aurelio Bldg. II, 11th Avenue, Grace Park, Caloocan City Attention: Atty. Loly C. Aquino-Madumma Public Attorney I Gentlemen : This refers to your letter dated July 28, 2009 requesting, as public counsel of Mrs. Nenita E. Narciso, copies of latest list of assets and/or the financial statements of Ar-Zel Management Services, Inc. CIaDTE It is represented that Mrs. Nenita E. Narciso is a former employee of Ar-Zel Management Services, Inc.; that a case for illegal dismissal was filed by Mrs. Nenita E. Narciso against Ar-Zel Management Services, Inc. docketed as NLR NCR Case No. L-11-18410-08; that on May 27, 2009, the Labor Arbiter rendered a decision finding Mrs. Nenita E. Narciso to be illegally dismissed and that Ar-Zel Management Services, Inc. is being ordered to pay US$2,400.00 or its Peso equivalent representing unexpired portion of her 2-year contract as well as attorney's fees equivalent to 10% of her total award; and that the purpose of the request of the Public Attorney's Office for a copy of latest list of assets and/or the financial statements of Ar-Zel Management Services, Inc. is to facilitate due execution of judgment award given to Mrs. Nenita E. Narciso. In reply, please be informed that the requested documents contain information regarding the business and/or income of taxpayers which are considered confidential under Section 270 of the National Internal Revenue Code of 1997 (NIRC). The pertinent provision reads: "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. (BIR Ruling No. DA-072-07 dated February 6, 2007) Based on the foregoing, the nature of the request of the Public Attorney's Office does not fall under any of the instances where financial documents/tax returns of taxpayers 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