Scribd Logo
Upload

Welcome to Scribd!

  • 43 views

    Bir vs. Ca

    Uploaded by

    Raquel Doquenia
    The Bureau of Internal Revenue issued a letter to investigate Antonio and Ruby Manly for potential tax liabilities from 2003 and prior years. The BIR requested documents to substantiate the source of funds used to purchase a P17.5 million vacation home in Tagaytay City. When the couple failed to comply, revenue officers concluded the declared income on tax returns was underreported based on expenditures. Criminal charges for tax evasion were recommended but ultimately not pursued due to lack of evidence of tax due or willful evasion. On appeal, the Supreme Court affirmed that tax liability must be proven before prosecution for evasion but the government can use expenditure analysis to reconstruct unreported income when expenditures exceed declared amounts.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    Bir vs. Ca

    Uploaded by

    Raquel Doquenia
    43 views1 page
    The Bureau of Internal Revenue issued a letter to investigate Antonio and Ruby Manly for potential tax liabilities from 2003 and prior years. The BIR requested documents to substantiate the source of funds used to purchase a P17.5 million vacation home in Tagaytay City. When the couple failed to comply, revenue officers concluded the declared income on tax returns was underreported based on expenditures. Criminal charges for tax evasion were recommended but ultimately not pursued due to lack of evidence of tax due or willful evasion. On appeal, the Supreme Court affirmed that tax liability must be proven before prosecution for evasion but the government can use expenditure analysis to reconstruct unreported income when expenditures exceed declared amounts.

    Original Title

    51. BIR VS. CA.docx

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    The Bureau of Internal Revenue issued a letter to investigate Antonio and Ruby Manly for potential tax liabilities from 2003 and prior years. The BIR requested documents to substantiate the source of funds used to purchase a P17.5 million vacation home in Tagaytay City. When the couple failed to comply, revenue officers concluded the declared income on tax returns was underreported based on expenditures. Criminal charges for tax evasion were recommended but ultimately not pursued due to lack of evidence of tax due or willful evasion. On appeal, the Supreme Court affirmed that tax liability must be proven before prosecution for evasion but the government can use expenditure analysis to reconstruct unreported income when expenditures exceed declared amounts.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    43 views1 page

    Bir vs. Ca

    Uploaded by

    Raquel Doquenia
    The Bureau of Internal Revenue issued a letter to investigate Antonio and Ruby Manly for potential tax liabilities from 2003 and prior years. The BIR requested documents to substantiate the source of funds used to purchase a P17.5 million vacation home in Tagaytay City. When the couple failed to comply, revenue officers concluded the declared income on tax returns was underreported based on expenditures. Criminal charges for tax evasion were recommended but ultimately not pursued due to lack of evidence of tax due or willful evasion. On appeal, the Supreme Court affirmed that tax liability must be proven before prosecution for evasion but the government can use expenditure analysis to reconstruct unreported income when expenditures exceed declared amounts.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    CASE: BUREAU OF INTERNAL REVENUE VS.

    COURT OF APPEALS, SPOUSES


    ANTONIO VILLAN MANLY AND RUBY ONG MANLY
    G.R. No. 197590
    November 24, 2014

    The Bureau of Internal Revenue issued a letter of authority authorizing its revenue officers
    to investigate Spouses Antonio Villan Manly (Antonio) and Ruby Ong Manly for their
    internal revenue tax liabilities for the taxable year 2003 and prior years. Antonio is a
    stockholder and the Executive Vice-President of Standard Realty Corporation, a family-
    owned corporation. He is also engaged in rental business. His spouse is a housewife. The
    BIR later issued the Spouses a letter requiring them to submit documentary evidence to
    substantiate the source of their cash purchase of a 256-square meter log cabin in
    Tagaytay City worth P17,511,010.00. The Spouses, however, failed to comply with the
    letter. The revenue examiners then executed affidavit showing the declared income of the
    Spouses for the covered years, and despite such modest income, they were able to buy
    in cash luxurious vacation house in Tagaytay and motor vehicles. Since the Spouses failed
    to show the source of their cash purchases, the revenue officers concluded that the
    income declared in Antonio’s income tax returns were underdeclared. And since the
    underdeclaration exceeded 30% of the reported or declared income, it was considered a
    prima facie evidence of fraud with intent to evade the payment of proper taxes due to the
    government. The revenue officers , thus, recommended the filing of criminal cases against
    the Spouses for failing to supply correct and accurate information in their income tax
    returns, punishable under Sections 254 and 255 in relation to Section 248(B) of the 1997
    Tax Code. The prosecutor recommended the filing of criminal charges but was reversed
    by the Secretary of Justice. The latter found no willful failure to pay or attempt to evade or
    defeat the tax on the part of the Spouses as the BIR allegedly failed to specify the amount
    of tax due and the likely source of income from which the same was based. She also
    pointed out BIR’s failure to issue a deficiency tax assessment against the Spouses which
    is a prerequisite to the filing of a criminal case for tax evasion. On appeal to the Court of
    Appeals, the CA ruled that there was no probable cause to charge Spouses as the BIR
    allegedly failed to state their exact tax liability and to show sufficient proof of their likely
    source of income. The CA further said that before one could be prosecuted for tax evasion,
    the fact that a tax is due must first be proved.

    On appeal to the Supreme Court, the SC, citing earlier rulings, noted that although a
    deficiency assessment is not necessary, the fact that a tax is due must first be proved
    before one can be prosecuted for tax evasion. In the case of income, for it to be taxable,
    there must be a gain realized or received by the taxpayer, which is not excluded by law or
    treaty from taxation. The government is allowed to resort to all evidence or resources
    available to determine a taxpayer’s income and to use methods to reconstruct his income.
    A method commonly used by the government is the expenditure method, which is a
    method of reconstructing a taxpayer’s income by deducting the aggregate yearly
    expenditures from the declared yearly income. The theory of this method is that when the
    amount of the money that a taxpayer spends during a given year exceeds his reported or
    declared income and the source of such money is unexplained, it may be inferred that
    such expenditures represent unreported or undeclared income.

    You might also like

    pFad - Phonifier reborn

    Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

    Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


    Alternative Proxies:

    Alternative Proxy

    pFad Proxy

    pFad v3 Proxy

    pFad v4 Proxy