BIR ordered to investigate Sereno for alleged tax evasion

Metro Manila (CNN Philippines, February 7) — The Bureau of Internal Revenue (BIR) on Wednesday said it will begin investigating Chief Justice Maria Lourdes Sereno’s alleged failure to pay taxes.

BIR Deputy Commissioner for Operations Arnel Guballa made this commitment in response to an order from the House Committee on Justice.

“You are hereby directed to submit before this committee the results of your investigation on the tax payments, incomes, revenues, and the compliance by the Chief Justice. So ordered,” House Justice Committee Chairperson Reynaldo Umali told the BIR official.

Umali asked the BIR to submit the results before February 19, saying he hopes to finish hearing Sereno’s impeachment case by the end of the month.

Guballa answered, “We will do [our] best to find supposed deficiency or whatever we can find regarding the income the Chief Justice has made.”

He asked permission to leave while the hearing was ongoing so he can formally launch the probe. He was allowed to go.

Earlier, Rep. Eugene De Vera asked Guballa if the BIR has ever investigated Sereno’s alleged tax evasion, in connection with her supposed failure to file her Statements of Assets, Liabilities and Net Worth (SALNs) for 17 years, when she was still a professor at the University of the Philippines.

“We all know in taxation that all income, whether legal or illegal is subject to tax,” De Vera said.

In the impeachment complaint filed by lawyer Larry Gadon, Sereno is accused of failure to file SALNs, and “failing to report her extortionate attorney’s fees and pay the appropriate taxes.” Gadon said this constitutes a violation of the Constitution and other high crimes, grounds for officials to be impeached under the Constitution.

Gadon said Sereno earned P37 million (US$725,500) in lawyers’ fees for representing the government in a controversial case against the Philippine International Air Terminals Co. Inc. in 2003. The BIR said it will look into the actual amount received by Sereno.

In a statement issued Wednesday, Sereno’s camp maintained the Chief Justice accurately declared all her earnings in the PIATCO cases.

“During the years CJ Sereno filed her income tax returns with the BIR, there was no deficiency assessment notice from the BIR nor any question surrounding her ITR filings,” Sereno spokesman Atty. Josa Deinla said.

“This only means one thing: All her income tax filings when she was a private lawyer were accurate and proper. Tama, sakto at walang hokus-pokus [accurate, exact, and without any hocus-pocus].”

Deinla said their camp is “confident” the BIR’s review of Sereno’s ITRs will prove she has paid corresponding taxes for income earned before.

She added the fees, like any other income, were gradually spent over time.

“All assets and investments bought or acquired from the remainder of these fees were truthfully reflected in her SALNs when she became a member of the judiciary,” said Deinla

Sereno’s lawyers earlier said she received P30 million in tranches. Since it was not received in full, the full amount does not appear in any of her SALNs, her lawyers said.

In the impeachment case, the Chief Justice is also accused of committing corruption and betrayal of public trust. Sereno has denied the allegations, and asked for the complaint to be junked.