The Bureau of Internal Revenue (BIR) today filed a criminal complaint with the Department of Justice against RED FOX SECURITY, INC. (RED FOX) and its responsible corporate officers President FELIPE J. PACLEB and Treasurer PEDRO T. CEZAR for three (3) counts of Willful Attempt to Evade or Defeat the Payment of Income Tax for taxable years 2008 to 2010 and three (3) counts of Deliberate Failure to Supply Correct and Accurate Information for taxable years 2008 to 2010, all in violation of Sections 254 and 255 in relation to Sections 253 and 256 of the National Internal Revenue Code of 1997, as amended (Tax Code).
RED FOX is a domestic corporation primarily engaged in providing security to juridical persons, offices, industrial, commercial and other establishments whether public or private, anywhere in the Philippines for the purpose of securing or protecting properties, with registered address at No. 43-F HR Building, Mindanao Avenue, Pag-asa, Quezon City.
The case against RED FOX stemmed from a third-party information provided by an informer who has personal knowledge of the operations of the company. In the course of its tax mapping operations, the BIR apprehended from RED FOX unregistered provisional and official receipts, as well as deposit slips which disclosed that Air Materiel Wings Savings and Loan Association, Inc. (AMWSLAI) was a major client of RED FOX.
Access letters were sent by the BIR to ascertain income payments made by AMWSLAI to RED FOX. In reply thereto, AMWSLAI issued a certification which indicated that RED FOX received total income payments of P24.62 million, P23.46 million and P25.52 million for taxable years 2008, 2009 and 2010, respectively.
Despite said income payments from AMWSLAI, RED FOX only declared gross revenues of P5.39 million, P3.69 million and P3.97 million for taxable years 2008, 2009 and 2010, respectively, thereby substantially underdeclaring its gross revenues by P19.22 million (356%) for taxable year 2008, P19.77 million (536%) for taxable year 2009 and by P21.54 million (542%) for taxable year 2010.
Under Section 248(B) of the Tax Code, an underdeclaration of taxable income by more than 30% constitutes a prima facie case of fraud tantamount to tax evasion.
RED FOX was sued for its income tax deficiencies in the amount of P23.44 million, P16.93 million and P16.97 million for taxable years 2008, 2009 and 2010, respectively, or in the aggregate amount of P57.34 million, inclusive of surcharges and interests.
The case against RED FOX SECURITY, INC. and its responsible corporate officers President FELIPE J. PACLEB and Treasurer PEDRO T. CEZAR is the 184thfiled under the RATE program of the BIR under the leadership of Commissioner Kim S. Jacinto-Henares. It is likewise a RATE case of Revenue Region No. 7, Quezon City.