BIR Ruling No. 209-61

June 15, 1961 BIR RULING NO. 209-61 2nd Indorsement Respectfully returned to the Chief, Investigation Division, B.I.R., Manila. The question of whether or not the salaries paid to the officers and stockholders of Brixton Investment, Inc. are excessive, is strictly one of fact. The principal factor necessary to resolve this question is the actual services rendered by each stockholder-employee. What services are actually rendered by each of them? Where do they hold office? How often do they go there to render service? What are the usual salaries paid to such officers by similar corporations? The answers to all these questions are necessary to resolve the above legal question. prll As regards the 50% surcharge, the law provides for the imposition, thereof in case of willful neglect to file an income tax return, or in case a false or fraudulent return is willfully made. Even granting that the salaries paid to the stockholder-employees were excessive, that alone is not sufficient to warrant the imposition of the 50% surcharge. There must be proof to show that there was really intent to evade the tax. In view of the foregoing, this case is returned to that division for further investigation. cdta (SGD.) MISAEL P. VERA Deputy Commissioner of Internal Revenue