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    BIR vs. CA, Sps. Antonio Villan Manly (Digest)

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    stclementacademyinc1
    The Supreme Court granted the petition of the Bureau of Internal Revenue (BIR) against Antonio and Ruby Manly. While a tax deficiency assessment is not required to file criminal charges for tax evasion, the fact that tax is due must be proved. The BIR presented evidence that the Manlys underdeclared their income by more than 30% for years 2000, 2001 and 2003 through an expenditure method analysis, which is prima facie evidence of filing false tax returns. The Court ruled this was sufficient to establish probable cause for tax evasion charges against the Manlys.

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    BIR vs. CA, Sps. Antonio Villan Manly (Digest)

    Uploaded by

    stclementacademyinc1
    758 views1 page
    The Supreme Court granted the petition of the Bureau of Internal Revenue (BIR) against Antonio and Ruby Manly. While a tax deficiency assessment is not required to file criminal charges for tax evasion, the fact that tax is due must be proved. The BIR presented evidence that the Manlys underdeclared their income by more than 30% for years 2000, 2001 and 2003 through an expenditure method analysis, which is prima facie evidence of filing false tax returns. The Court ruled this was sufficient to establish probable cause for tax evasion charges against the Manlys.

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    The Supreme Court granted the petition of the Bureau of Internal Revenue (BIR) against Antonio and Ruby Manly. While a tax deficiency assessment is not required to file criminal charges for tax evasion, the fact that tax is due must be proved. The BIR presented evidence that the Manlys underdeclared their income by more than 30% for years 2000, 2001 and 2003 through an expenditure method analysis, which is prima facie evidence of filing false tax returns. The Court ruled this was sufficient to establish probable cause for tax evasion charges against the Manlys.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    758 views1 page

    BIR vs. CA, Sps. Antonio Villan Manly (Digest)

    Uploaded by

    stclementacademyinc1
    The Supreme Court granted the petition of the Bureau of Internal Revenue (BIR) against Antonio and Ruby Manly. While a tax deficiency assessment is not required to file criminal charges for tax evasion, the fact that tax is due must be proved. The BIR presented evidence that the Manlys underdeclared their income by more than 30% for years 2000, 2001 and 2003 through an expenditure method analysis, which is prima facie evidence of filing false tax returns. The Court ruled this was sufficient to establish probable cause for tax evasion charges against the Manlys.

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    of 1

    BIR vs. CA, Sps.

    Antonio Villan Manly and Ruby Ong AUTHOR:


    Manly Expenditure method: a method of reconstructing the taxpayers income by
    deducting the aggregate yearly expenditures form the declared yearly income. The
    [G.R. No. 197950, November 24, 2014] theory is that when the amount of the money that a taxpayer spends during a
    TOPIC: Tax Evasion, determination of probable cause 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
    PONENTE: Del Castillo income.
    FACTS:
    1. Antonio Manly is stockholder and EVP of Standard Realty corp, a family owned corporation while at the same time
    engaged in rental business. His wife, herein co accused is a housewife.
    2. On April 27, 2005, the BIR issued LOA No. 2001 00012387 authorizing its revenue officers to investigate respondent
    spouses for internal revenue tax liabilities for the year 2003 and prior years.
    3. On June 6, 2005, BIR issued a letter to respondents requiring them to submit documentary eveidence.
    4. The Spouses failed to comply, thus on June 23, 2005, the revenue officers executed a joint affidavit purporting to the
    declared annual income of the spouses for the years 1998-2003. In the said affidavit, it was alleged that despite the
    modest income declared, the spouses were able to acquire valuable properties such as the log house in Tagaytay City,
    a Toyota Rav 4 and a Toyota Prado.
    5. The revenue officers recommended the filing of criminal cases against the respondents, for failing to supply the
    correct and accurate information in their ITRs for the years 2000, 2001 and 2003, punishable under Sec. 254 and 255,
    in relation to Sec. 248 (B) of R.A. 8424 (Tax Reform Act of 1997).
    6. The State Prosecutor recommended for the filing of criminal charges against respondents: 3 counts of violation of Sec.
    254 (attempt to evade or defeat tax), 3 counts of violation of Sec. 255 (failure to supply correct and accurate
    information), and 3 counts of violation of Sec. 255 (failure to pay).
    7. On July 27, 2009, Justice Secretary Agnes Devanadera reversed the resolution of the State Prosecutor. She found no
    willful failure to pay or attempt to evade or defeat the tax on the part of the respondent spouses. She also pointed to
    the BIRs failure to issue a deficiency tax assessment against respondents is a prerequisite to the filing of criminal case
    for tax evasion.
    8. BIR filed a petition for certiorari before the CA, however, the petition was dismissed.
    ISSUE(S):
    WON the issuance of a deficiency tax assessment is a prerequisite to the filing of criminal case for tax evasion?

    HELD: Petition of BIR granted.


    RATIO:
    1. Tax evasion is deemed complete when the violator has knowingly and willfully filed fraudulent return with intent
    to evade and defeat a part or all of the tax. An assessment of the tax deficiency is not required in a criminal
    prosecution for tax evasion. However, the fact that a tax is due must be proved before one can be prosecuted for
    tax evasion.
    2. Since the underdeclaration of the income is more than 30% (133.24%), it constitutes prima facie evidence of false
    or fraudulent return.
    3. The amount of tax due was specifically alleged in the complaint.
    CASE LAW/ DOCTRINE: Tax evasion is deemed complete when the violator has knowingly and willfully filed fraudulent
    return with intent to evade and defeat a part or all of the tax.
    DISSENTING/CONCURRING OPINION(S):

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