BIR Ruling [UN-067-95]

February 14, 1995 BIR RULING [UN-067-95] The Honorable The Secretary of Finance M a n i l a S i r : Respectfully forwarded to that Office for approval is the herein claim of Mr. Federico P. Santos for informer's reward under Section 281(1) of the Tax Code, as amended, together with the entire docket bearing on the 1986 deficiency income tax case of the Spouses Santiago S. Ong and Virginia T. Ong of Poblacion, Capas, Tarlac. cdtech The records show that on July 13, 1989, in a sworn statement recorded as Confidential Information No. 2327, the informer denounced the above named spouses for failure to declare income derived from lending activities and from sale of cemetery lots. Acting on said confidential information, a group of revenue officers of the Intelligence & Investigation Office (now Tax Fraud Division) conducted an investigation and thereafter submitted their report and recommendation dated October 8, 1990. On the basis of their report and findings, Assessment Notice No. FAS-1-86-90-003400 was issued by this Office on November 7, 1990 requiring the spouses to pay the amount of P180,434.65 as deficiency income tax inclusive of 50% and 25% surcharges and interest for the year 1986. The spouses, thru their counsel, protested the assessment which protest was denied by this Office in letter dated June 21, 1991. Since the denial was the final decision on the matter, the spouses filed a Petition with the Court of Tax Appeals docketted as CTA Case No. 4648. After hearing, the Court of Tax Appeals rendered a decision on July 20, 1994 finding the spouses liable to pay only the amount of P27,070.06 as deficiency income tax for 1986. The said amount, plus 20% interest computed from April 16, 1987 up to August 16, 1994 or a total of P66,771.01 was finally paid by the spouses on August 18, 1994 as evidenced by the attached xerox copy of Authority To Accept Payment SN No. 67580. The records further show that the information filed by the informer was in writing and under oath; that it was not yet in the possession of the Bureau of Internal Revenue nor is the aforesaid tax liability pending or previously investigated by any official or employee of this Bureau or by the Department of Finance; and that the informer swore that he is not related to any internal revenue official or employee or any public officer within the 6th degree of consanguinity. It appearing that the information filed by Mr. Federico P. Santos was instrumental in the discovery of a violation of the internal revenue laws and in the recovery of taxes which otherwise would not have been effected, it is respectfully recommended that he be paid the amount equivalent to 15% of P66,771.01 or P10,015.65 as informer's reward pursuant to Section 281(1) of the Tax Code, as amended. Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue