BIR Ruling No. 200-15

June 10, 2015 BIR RULING NO. 200-15 Section 282 (A) of the Tax Code of 1997; RMO 12-63; BIR Ruling No. 620-12 Elizabeth Baculinao Luces No. 43 A Crisostomo St., BF Resort Village, Las Pias City Madam : This refers to your claim for informer's reward under Section 282 (A) of the Tax Code of 1997, as amended, relative to the internal revenue tax case of ANN ARBOR MONTESSORI EARLY LEARNING CENTER, INC. Records show that on 11 February 2005, you used pseudonym "NELIA SISON" in filing a denunciation against ANN ARBOR MONTESSORI EARLY LEARNING CENTER, INC. (hereinafter referred to as "ANN ARBOR"), denominated as Confidential Information No. 47-2005 dated 11 February 2005, for its alleged under-declaration of gross income and under-withholding of employees' taxes in violation of the Tax Code of 1997, as amended. On the basis of the said Confidential Information, a preliminary investigation was conducted, and by virtue of a Letter of Authority issued to ANN ARBOR authorized revenue officers of National Investigation Division (NID) of BIR National Office, Quezon City conducted an examination of the books of ANN ARBOR. Based on the investigations, a criminal case for tax evasion was filed by the Bureau of Internal Revenue against ANN ARBOR on 29 September 2005 1 with the Department of Justice (DOJ) for fraudulent and substantial under-declaration of taxable income and willful failure to withhold and remit taxes on employees' compensation for taxable years 2001, 2002, 2003, and 2004. On 12 September 2007, the DOJ prosecutor resolved to dismiss the tax evasion case under preliminary investigation for lack of probable cause. The Motion for Reconsideration filed by the BIR was likewise denied by the DOJ on 17 December 2007. BIR filed a Petition for Review with the Secretary of Justice on 12 February 2008 but was dismissed. The BIR elevated the case was to the Court of Appeals upon a Petition for Certiorari under Rule 65 of the Rules of Court. The Court of Appeals, on 17 November 2009, denied the Petition. ANN ARBOR availed of the Tax Amnesty Program under R.A. 9480 on 28 January 2008 and paid P535,532.49. Subsequently, on 06 January 2010, you executed an Affidavit of Desistance 2 in relation to the tax evasion case wherein you recanted your denunciations against ANN ARBOR and its officers. Relevant statements are herein reproduced in toto : 5) After a careful and thorough reflection of the circumstances prior to, and during the execution of the said Affidavits, I came to realize I was driven by my ill-feelings against the School, Lourdes L. Carpio, Christine L. Carpio-Mintu and Anne Marie L. Carpio in executing the same since they terminated my employment from the School. I was then employed as the person handling the School's and their accounts and other transactions involving money. My anger and other ill-feelings forced me to allege matters which I know were not truthful. The statements which I narrated in my said Affidavits were concocted or fabricated by me; aTHCSE 6) These actuations of mine were likewise triggered by their filing of several cases against me. I felt then harassed and abused by them; 7) By reason thereof, I am waiving any and all rights, interest and actions that I have or may have against the School, Lourdes L. Carpio, Christine L. Carpio-Mintu and Anne Marie L. Carpio and Reynaldo G. Carpio (hereinafter collectively referred to as the "Carpio Family"); 8) Now, I am voluntarily and wilfully renouncing and retracting whatever I have stated in the said Affidavits pertaining to illegal activities of the School, Lourdes L. Carpio, Christine L. Carpio-Mintu and Anne Marie L. Carpio in evading payment of taxes. I am and will be desisting from being a witness to any investigation being conducted now, or in the future, by the Bureau of Internal Revenue (BIR) or any government agency against the School and the Carpio family; 9) I hereby attest to the truthfulness of what have been stated in this Affidavit. I also executed this document on my own free will and without any consideration whatsoever. In reply, this Office hereby denies your claim for informer's reward. Your execution of an Affidavit of Desistance contradicts, if not, negates your claim for informer's reward. (BIR Ruling No. 620-2012 dated November 16, 2012) Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue Footnotes 1. BIR vs. Ann Arbor Montessori Early Learning Center, Inc. and/or Lourdes L. Carpio and Christine L. Carpio-Mintu , I.S. NO. 2005-985. 2. Atty. Rotsie V. Laurino, Notary Public for Paraaque City; Doc. No. 16, Page No. 04, Book I, Series of 2010.