BIR nets top-notch doctors, lawyers in tax crackdown

Tax evasion charges were filed against a list of prominent doctors and lawyers in what could be the start of a Bureau of Internal Revenue (BIR) crackdown on professionals who have long been misdeclaring their incomes for tax purposes.

The BIR reported yesterday that charges were filed against election lawyer George Erwin Garcia, who is a counsel for prominent politicians, including Pampanga Gov. Lilia Pineda and former Sen. Juan Miguel Zubiri, neurosurgeon Dr. Willy Go Lopez, failed Banco Filipino lawyer Abelardo Aportadera Jr. and celebrity dermatologist Sylvia Huang.

In a press statement, the BIR said Garcia was criminally charged before the Department of Justice (DoJ) “for willfully attempting to evade or defeat payment of taxes and for deliberately failing to supply correct and accurate information in his income tax return for taxable year 2010.”

Garcia is also being sued for the payment of deficiency taxes for 2010 and the BIR is seeking to recover from him P37.9 million, including penalties.

The BIR said Garcia is registered as a professional taxpayer at Revenue District Office 33, Intramuros-Ermita-Malate.

The investigation of Garcia was prompted by the information provided by a confidential informant that there is a pending civil case against him wherein he admitted in his verified answer that he purchased a condominium unit worth P53 million.

The BIR said investigations it made showed that Garcia made several payments on the unit worth millions each from Feb. 2, 2010 to June 8, 2010 as evidenced by acknowledgment receipts issued by a certain Crispina Pastores.

Despite the acquisition of expensive

condominium units, Garcia had declared minimal amounts of gross income in his Annual Income Tax Returns for the years 2004 to 2010 totaling P4.45 million.

The BIR said using the expenditures method of tax investigation, the agency ascertained that Garcia substantially underdeclared his income for 2010.

A comparison of Garcia’s reported income of P1.38 million for 2010 and his total expenditures of P53.35 million yielded a difference of P51.97 million or an underdeclaration of more than 30 percent, which under the Tax Code is considered as substantial underdeclaration and constitutes prima facie evidence of fraud tantamount to tax evasion, according to the BIR.

Lopez, meanwhile, is a medical practitioner specializing in neurosurgery at the Medical City, Makati Medical Center and Cardinal Santos Medical Center, the BIR said.

It added the criminal complaint against Lopez stemmed from a complaint-affidavit dated June 18, 2010 for non-issuance of official receipts executed by spouses Arestophanes Salvador and Josephine Salvador, parents of Aries Joseph Salvador.

“The complainants alleged that on at least four occasions, they paid Dr. Lopez a total amount of P164,000 for the latter’s professional services but were never issued any official receipt.

The BIR said to verify the veracity of the complaint filed by the spouses, Mission Order 00052013 dated August 22, 2011 was issued, placing Dr. Lopez under observation and surveillance.

In the course of the investigation, a BIR revenue officer interviewed one of the patients of Dr. Lopez in the latter’s clinic and found out that no official receipt was issued for the payment of the consultation fee of P1,000.00. After the interview, BIR investigators served the MO on Lopez, the BIR said.

The acts of Lopez violated the express provisions of section 264, in relation to section 237, of the Tax Code which mandate him to issue a receipt for each payment he receives for the professional services he renders.

Aportadera, on the other hand, was one of the “payees” to whom payment was made by Banco Filipino for taxable years 2008, 2009 and 2010 in the list submitted by Teodoro Jose Hirang, Philippine Deposit Insurance Corp. (PDIC) assistant vice-president and deputy receiver of Banco Filipino Savings and Mortgage Bank (Banco Filipino), in reply to the access to records letter by the BIR.

“On the basis of said list, it was discovered that Atty. Aportadera received, in consideration of legal services rendered to Banco Filipino, the amount of P29.5 million, P37.18 million and P37.9 million for the taxable years 2008, 2009 and 2010, respectively, as evidenced by documents of payments such as manager’s checks, vouchers, billing statements, official receipts and BIR Form No. 1604E for the years 2008 to 2010,” the BIR noted.

BIR investigators further found out that Aportadera filed his income tax returns (ITRs) for 2008 to 2010 but failed to file his value added tax (VAT) returns for the same period.

A comparison of the declarations of Atty. Aportadera in his ITRs for the year 2008 of P25.025 million and for the year 2009 of P25.055 million as against the income payments (net of VAT) he received from Banco Filipino of P26.66 million in 2008 and P33.2 million in 2009 revealed he substantially underdeclared his income by P1.635 million (6.53 percent) and P8.145 million (32.41 percent) in 2008 and 2009, respectively, the BIR said.

The BIR, thus, is seeking to collect from Aportadera deficiency income taxes for the two-year period of P5.54 million, inclusive of surcharges and interests.

Furthermore, the BIR assessed Atty. Aportadera deficiency VAT of P20.5 million, inclusive of increments, for taxable years 2008, 2009 and 2010 bringing the total tax liability of Aportadera to P26 million. –Daily Tribune