What Is Tax Evasion

What is Tax evasion?
It is the illegal nonpayment or underpayment of tax

Tax avoidance is defined as legal measures to use the tax regime to find ways to pay
the lowest rate of tax, putting savings in the name of your partner to take advantage of
their lower tax band. Tax avoidance is simply the process of reducing tax liability using
legitimate ways. Mainly, it involves capitalizing on shortcomings within the law with the
intention of reducing the total amount owed to the IRS. In some instances, tax
avoidance is used to postpone the payment date for tax liability.
Tax evasion is taking illegal steps to avoid paying tax,not declaring income to the
taxman.
Tax evasion is the intentional act of failing to either file tax returns or pay the tax liability
or both. Additionally, falsifying the taxable income records or using underhand tactics to
avoid payroll and other taxes also count as tax evasion. Notably, tax evasion is a severe
crime that attracts dire consequences, such as hefty fines and lengthy jail terms.
Part 2
BIR files largest tax case vs Mighty Corp. (largest tax evasion case in
history)
The Bureau of Internal Revenue (BIR) yesterday filed a P26.9-billion criminal complaint
against homegrown tobacco-manufacturer Mighty Corp. for its alleged use of fake
cigarette tax stamps, its largest tax evasion case in history.
It was the second criminal complaint filed by the BIR against Mighty Corp. and its four
top officials – retired Lt. Gen. Edilberto Adan, president; former Executive Judge Oscar
Barrientos, executive vice president; Corporate Secretary Alexander Wongchuking; and
Treasurer Ernesto Victa.
The latest complaint, filed before the Department of Justice, was based on the outcome
of joint BIR and Bureau of Customs (BOC) raid last March 24 at two MC warehouses in
San Ildefonso, Bulacan.
Last March 22, the BIR filed a separate P9.564-billion criminal complaint against the
embattled cigarette firm, also for allegedly evading the payment of excise taxes by using
fake tax stamps.
The March 22 complaint stemmed from BOC inspections made on the Corporation’s
warehouses at the San Simon Industrial Park, San Isidro, Pampanga, where 87.5
percent of the 33,140,500 packs there were found to have fake internal revenue
stamps.
Mighty Corp. is now facing a total of P36.49 billion in tax evasion cases lodged by the
BIR, which is more than the government’s P25-billion case against business tycoon
Lucio Tan filed in 1993.
The second case stemmed from the BOC’s raids on Mighty Corp.’s warehouses at
Barangay Matimbubong in San Ildefonso, Bulacan, where the authorities confiscated
P3.2 billion worth of cigarettes packs with fake tax stamps.
According to the BIR, Mighty Corp. was charged with “unlawful possession of articles
subject to excise tax without payment of the tax, and for possessing false, counterfeit,
restored or altered stamps.”
The company violated of Sections 263 and 265(c) of the National Internal Revenue
Code of 1997, as amended (Tax Code), the BIR said.
“The result of the inventory-taking conducted on two Mighty Corp. warehouses in San
Ildefonso, Bulacan, disclosed a total of 81.59 million packs contained in 163,183 master
cases,” the BIR said.
“Based on the 24-day validation activity conducted from March 27, 2017 to May 05,
2017, 100 percent of the total stamps tested on 536,000 cigarette packs (1,072 master
cases) in the two warehouses are fake,” the agency said.
The BIR said the stamps were fake since they did not contain one of the multi-layered
security features of a valid internal revenue stamp.
Likewise, the agency said the stamps were not affixed at the production plant of Mighty
Corp. in Barangay Tikay, Malolos, Bulacan.
The BIR also pointed that the company failed to present the official delivery receipts, an
indication that the cigarette packs in the warehouses did not come from Mighty’s
licensed manufacturing plant.
“It should be noted that the warehouses in Barangay Matimbubong, San Ildefonso,
Bulacan are not registered with the BIR as certified by the Excise Large Taxpayer
Regulatory Division,” the BIR said.
“Mighty Corp. cannot legally remove the said packs of cigarettes from their only plant in
Tikay, Bulacan, for delivery to the said unregistered warehouses,” the agency added.
Tags: BIR files largest tax case vs Mighty Corp., Bureau of Internal Revenue, fake

cigarette tax stamps, largest tax evasion case in history, Manila Bulletin, Mighty Corp.
Part 3
PENALTIES IN PHIL
Nature of Violation Criminal Penalty imposed
Failure to file and/or pay any internal revenue tax at Fine of not less than
the time or times required by law or regulation P10,000 and
imprisonment of not
less than one (1)
year but not more
than 10 years
Failure to make/file/submit any return or Fine of not less than P10,000 and
supply correct information at the time or imprisonment of not less than one (1)
times required by law or regulation year but not more than ten (10) years
Part 4
Necessary to elaborate a well thought-out and comprehensive multi-disciplinary national
strategy and action plan against crimes
Risk assessment and exchange of information should be integrated
Should address legislative issues
Should have proper supervision and control of public authorities
Fair and not bias investigation regarding on issues
Part 5
https://news.mb.com.ph/2017/05/10/bir-files-largest-tax-case-vs-mighty-corp/

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What is Tax evasion?

It is the illegal nonpayment or underpayment of tax

Tags: BIR files largest tax case vs Mighty Corp., Bureau of Internal Revenue, fake

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