BIR nets another Malampaya Fund Infrastructure Projects Contractor and CPA lawyer

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The Bureau of Internal Revenue (BIR) today filed a criminal complaint with the Department of Justice against REBECCA S. TIOTANGCO(TIOTANGCO) for Willful Attempt to Evade or Defeat Tax, and Deliberate Failure to Supply Correct and Accurate Information in her AnnualIncome Tax Returns (ITR) and in her Quarterly Value Added Tax (VAT) Returns, for taxable years 2008 and 2010, all in violation of Sections 254 and 255 of the National Internal Revenue Code of 1997, as amended (Tax Code).

Likewise charged was independent Certified Public Accountant (CPA) EDENCIO M. CERVANTES (CERVANTES) who certified the Financial Statements of TIOTANGCO for taxable years 2008 and 2010, in violation of Section 257 of the Tax Code.

Respondent TIOTANGCO is the sole proprietress of ANILOS TRADING AND CONSTRUCTION (ANILOS) with registered address at 153 Mabini St., Puerto Princesa City, Province of Palawan. Being in the business of construction and sale of construction supplies, ANILOS was engaged by the Provincial Government of Palawan to construct several infrastructure projects funded by the Malampaya Funds during taxable years 2008, 2009 and 2010.

Investigation showed that TIOTANGCO declared in her ITRs for taxable years 2008 and 2010 gross income amounting to only P16.49 million and P20.05 million, respectively.

However, a Certification issued by the Provincial Government of Palawan in reply to an access letter sent by the BIR showed that TIOTANGCO received income payments from the said local government unit amounting to P76.19 million in 2008 and P31.63 million in 2010.

A comparison of TIOTANGCO’s gross income declaration in her ITRs as against income payments she received from the Provincial Government of Palawan disclosed that she substantially underdeclared her correct taxable income by P59.70 million or by 362% in 2008 andby P11.58 million or by 57% in 2010.

As a consequence of her acts and omissions, TIOTANGCO was assessed an aggregate deficiency tax liability of P82.36 million, inclusive of surcharges and interests, broken down as follows: 2008 – P69.14 million (Income Tax – P50.08 million; and VAT – P19.06 million); and 2010 – P13.22 million (Income Tax – P7.56 million; and VAT – P5.66 million).

CERVANTES, on the other hand, was included in the charge sheet for certifying the financial statements of TIOTANGCO despite the essential misstatement of facts therein, as well as the clear omission therein with respect to the latter’s actual taxable income.

The case against REBECCA S. TIOTANGCO and her CPA EDENCIO M. CERVANTES is the 286th filed under the Run After Tax Evaders (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.