#AskTheTaxWhiz: Are you a tax evader? [Part 2]

My accountant reassured me that since we are “cooperating” with Bureau of Internal Revenue (BIR) examiners we have nothing to worry about. Is he correct? Can we not be audited again for the same year or for the prescribed years? What are the consequences of tax fraud?

He’s incorrect. Even audited or prescribed years may still be subject to BIR audit if there is evidence of fraud.

The following are the consequences of tax evasion:

• Civil penalties resulting to the imposition of a 50% surcharge
• Criminal penalties resulting to imprisonment and/or imposition of a fine upon conviction by the judicial courts 
• Power of the BIR to assess and collect the tax is extended to 10 years from the date of discovery of the fraud case
• Fraud cases cannot be the subject of a compromise

I usually read in the papers about the BIR filing tax evasion cases against celebrities. Is it true that only big taxpayers and personalities may be charged with tax evasion? What are the sources of RATE cases?

No. Cases under the Run Against Tax Evaders (RATE) program may come from any or all of the following sources:

• Routine audit examination of tax return/s by the BIR
• Confidential information filed by informers
• Information obtained by the BIR from third parties
• Referrals from other government agencies 
• Newspaper reports

In our industry, it is common not to declare all revenues or to buy receipts to reduce taxable income. Honestly, I find this really unfair to those of us who are paying the right taxes. Where can I report tax evaders? Is it true that there’s a reward for informers? How about for those paying the right taxes – is there no incentive?

If you know any individual or company not paying the right taxes, you may directly email BIR Commissioner Caesar Dulay at caesar.dulay@bir.gov.ph. Taxpayers may also contact the Customer Assistance Division (CAD), formerly the BIR Contact Center, for their tax queries and concerns using the following new numbers: 981-7003; 981-7020; 981-7030; 981-7040; 981-7046; or email their tax queries and concerns at contact_us@bir.gov.ph.

Yes, there is a reward for informers. An informer’s reward is given to a person instrumental in the discovery of tax fraud. The reward is a sum equivalent to 10% of the surcharges, revenues, or fees recovered and/or fine or penalty imposed and collected, or P1,000,000.00 per case, whichever is lower.

Meanwhile, for those who are paying the right taxes, CSR Philippines in partnership with the BIR launched the Seal of Honesty (SOH) Certification Program which will grant the following incentives to certified taxpayers:

• Issuance of annual tax clearance, without prejudice to information not available at the time of issuance
• Last Priority Audit
• Other privileges to be determined by other government agencies

For inquiries and/or reservation to attend the exclusive roundtable discussion on how to apply for SOH, email us at info.sealofhonesty@gmail.com or call (+63) 2 3725727. – Rappler.com

Mon Abrea, popularly known as the Philippine Tax Whiz, is one of the 2016 Outstanding Persons of the World, a Move Awards 2016 Digital Mover, one of the 2015 The Outstanding Young Men of the Philippines (TOYM), an Asia CEO Young Leader of the Year, and founder of the Abrea Consulting Group and Center for Strategic Reforms of the Philippines (CSR Philippines). He currently serves as Adviser to the Commissioner of Internal Revenue of the Philippine government on tax administration reform in promoting inclusive growth. Follow Mon on Twitter (@askthetaxwhiz) or visit his Facebook page. You may also email him at consult@acg.ph.