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BIR files tax cases vs. doctor, realty firm

Published on 02 May 2013 [ ]
Written by Mayvelin U. Caraballo
The Bureau of Internal Revenue (BIR) has filed tax-evasion charges with the Department of Justice against a medical doctor and a realty company, it said in a statement released on Thursday.
The bureau said that Dr. Potenciano Larrazabal 3rd allegedly attempted to evade, or defeat tax payment by failing to supply correct and accurate information in his income tax return (ITR) and value-added tax (VAT) returns for the first and second quarters of taxable year 2009, 2010 and 2011.
Larrazabal is a medical doctor by profession from Cebu City and the husband of actress-singer Donna Cruz.
The BIR added that its investigation showed that Larrazabal received income payments from Philippine Health Insurance Corp. (PhilHealth) amounting to P10.87 million in 2009, P8.88 million in 2010 and P9.38 million in 2011, or a sum of P29.14 million.
His ITRs and percentage tax returns (PTRs) filed with the BIR showed that Larrazabal declared a gross income of P1.48 million in 2009, P1.49 million in 2010 and P1.75 million in 2011.
“Investigators ascertained that Larrazabal deliberately failed to declare his correct tax base by substantially underdeclaring his taxable income by P9.39 million, or 635 percent in 2009, P7.39 million, or 493 percent in 2010, and P7.63 million or 437 percent in 2011,” it stated.
Moreover, Larrazabal also allegedly failed to register as VAT taxpayer, when his income of P3.18 million for the first quarter of 2009 breached the VAT threshold amount of P1.5 million.
“Rather, he only filed PTRs for the years 2009, 2010 and 2011 and made it appear in said returns that he only earned P300,000 for the first quarter of 2009 and P1.48 million for the year 2009, which would not make him liable for VAT,” it added.
Property firm charged
Meanwhile, the BIR also filed a criminal complaint against Philmay Property Inc. (PPI), together with its president, Ong Seet-Joon, and other officials.
The said respondents allegedly failed to file documentary stamp tax (DST) return and willful failure to supply correct and accurate information in its ITR and VAT return all for the fiscal year ending June 30, 2009.
PPI is a domestic corporation primarily organized to own, use, improve, develop, subdivide, sell, exchange, lease and hold for investment or otherwise, real estate of all kinds in Malate, Manila.
The BIR also charged revenue officers Vicente Velario, Joseph Macuha and Noradel Mendoza, who were originally tasked to examine the former’s books of accounts and other accounting records for all internal revenue taxes for the fiscal year for willfully aiding or abetting the responsible corporate officers of PPI.
BIR explained that investigation showed that PPI was investigated by the revenue officers for the subject fiscal year and was made to pay total deficiency taxes amounting to P499,206.53, inclusive of increments.
“A confidential informant, however, alleged that the government incurred a revenue loss from the said examination considering that the original assessment presented to PPI was P51.9 million, prompting the Office of the Commissioner of Internal Revenue [OCIR] upon recommendation of the BIR’s Internal Audit Division to order the re-investigation of PPI to ascertain its correct deficiency tax liabilities,” it said.
The bureau added that re-investigation disclosed that PPI indeed evaded the payment of the correct amount of taxes in the sum of P169.83 million, inclusive of surcharges and interests, by willfully exploiting illegal schemes to perpetrate tax evasion.
Moreover, the bureau said that PPI also evaded the payment of VAT amounting to P73.13 million by deliberately failing to report consummated sales of real properties amounting to P95.07 million, and a “transaction deemed sale” for VAT purposes with the re-acquisition by MPI of its properties with a book value of P223.82 million in exchange for a loan payable reduction of P72.7 million.
“Further, PPI failed to report said consummated sales and reacquisition of properties transactions for the payment of DST and EWT thereon. In addition, a contract of loan granted by MPI to PPI amounting to P419.25 million was not subjected to DST. PPI was thus assessed deficiency DST and EWT amounting to P15.57 million and P43.32 million, respectively,” it said.

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