The Bureau of Internal Revenue (BIR) today filed a criminal complaint with the Department of Justice against DR. ALEXANDER EDUARDO REYES GARCIA (Dr. GARCIA) for Willful Attempt to Evade or Defeat Tax, and Deliberate Failure to Supply Correct and Accurate Information in his Income Tax Return (ITR) for taxable years 2011, 2012 and 2013 in violation of Sections 254 and 255 of the National Internal Revenue Code of 1997, as amended (Tax Code).
DR. GARCIA was likewise charged with Deliberate Failure to file his Value Added Tax (VAT) Returns and Failure to Register as VAT Taxpayer for taxable years 2011, 2012 and 2013 in violation of Section 275, in relation to Section 236(G)(1) of the Tax Code.
DR. GARCIA is a dentist operating under the business name SACRED HEART DENTAL CENTER with business address at 129 Asuncion Street, Morning Breeze Subdivision, Brgy. 84 Zone 8, Caloocan City.
The case against DR. GARCIA stemmed from information extracted from the Information Systems database indicating that income payments made to the dentist for the years 2011, 2012 and 2013 amounted to P42.45 million. On the other hand, total income declared by DR. GARCIA in his ITRs for the said three-year period amounted to P2.98 million, broken down into: P0.891 million in 2011; P0.999 million in 2012; and P1.09 million in 2013.
Verification of the said third-party information by investigators through access letters sent to credit card companies whose services were utilized by the clients of DR. GARCIA to pay him revealed that he received from BDO Unibank, Inc. P3.30 million in 2011, P3.13 million in 2012 and P1.84 million in 2013. He also got from Citibank, N.A. P10.89 million in 2011, P7.52 million in 2012 and P15.77 million in 2013. In sum, DR. GARCIA earned P14.19 million in 2011, P10.65 million in 2012 and P17.61 million in 2013.
A comparison and evaluation of DR. GARCIA’s declared service income as against the income he actually received from the said credit card companies showed that he substantially underdeclared his correct taxable income/receipts by 1,492% or P13.30 million in 2011, 966% or P9.65 million in 2012 and 1,516% or P16.52 million in 2013.
Under Sec. 248 (B) of the Tax Code, under-declaration of taxable income by more than 30% constitutes a prima facie case of fraud.
He likewise failed to register as VAT Taxpayer considering that the amount of his service fees starting in 2011 exceeded the threshold amount of P1.92 million and thus, failed to file the required VAT returns and pay the corresponding VAT due thereon.
As a consequence of his acts and omissions, DR. GARCIA was assessed a total tax liability amounting to P31.64 million, inclusive of surcharges and interests, broken down into: 2011 - P11.91 million (Income Tax - P8.35 million and VAT – P3.56 million); 2012 - P7.88 million (Income Tax - P5.46 million and VAT – P2.42 million); and 2013 - P11.85 million (Income Tax - P8.30 million and VAT – P3.55 million).
The case against DR. ALEXANDER EDUARDO REYES GARCIA is the 281st filed under the RATE program of the BIR under the leadership of Commissioner Kim S. Jacinto-Henares. It is likewise a RATE case of the National Investigation Division.