Linggo, Disyembre 27, 2015


The formal complaint I filed with the Office of the Ombudsman vs Kim Henares and Estela Sales in connection with the P1.56-B tax case involving Golden Donuts, Inc. (GDI) includes, among other issues, the following:

1.   That GDI’s duly-registered books of accounts reflected a Net Income of P135.2-M while the tax return reflected a Net Loss of P44.9-M.

2.   That GDI’s duly-registered books of accounts reflected higher sales than that reflected on the tax return.

Sales per duly-registered books was P1.928-B while per tax return was P1.031-B. A huge discrepancy (under-declaration) amounting to P897-M.

The SUPREME COURT ruled in the case of Paper Industries Corporation of the Philippines versus Court of Appeals, et al., 250 SCRA 434 that “where the books of accounts reflected a Sales or Receipts higher than that reflected in the return, the books of accounts should prevail. This is so, because the books of accounts are kept by the taxpayer and are prepared under its control and supervision; and they reflected what may be deemed to be admission against interest.”

3.   Other independent relevant documents further revealed that GDI’s sales topped P2.366-B but the amount recorded in the duly-registered books was P1.928-B. A huge discrepancy amounting to P438-M.

Henares and Sales, in their counter-affidavits, and even the supporting affidavits of Atty. Romel Curiba, RATE Team Leader, and Mr. Wilfredo Reyes, the pioneer BIR CAATTs user, did not state any justifications or explanations to refute the above-enumerated issues.

The Ombudsman dismissed the case without investigating these issues scrupulously, and without discussing the same in the dismissal resolution despite glaring discrepancies.

The Ombudsman also did not secure GDI tax case docket from the BIR which is very crucial in the investigation.

No hearing was conducted.


Henares, in a telecast interview by GMA-7, said that representatives of GDI complained to her that my tax assessment against the company was faulty, that is why she had it re-investigated twice, conducted by different groups of revenue officers who supposedly arrived at the same results, purportedly finding my tax assessment to be incorrect. SHE LIED!!!

Just to reiterate. The PhP 1.56 billion deficiency tax assessment against GDI obtained finality. Thus, re-investigations are no longer warranted.

Once the deficiency tax assessment obtained finality, the right of the government to collect the deficiency tax becomes absolute; thus, precludes the taxpayer from questioning the correctness of the assessment and from raising any justification or defense that would pave the way for a re-investigation.

There is no LAW that authorizes the Commissioner to order two (2) re-investigations of a FINAL, EXECUTORY and DEMANDABLE assessment.

Notwithstanding the ensuing finality of the afore-said deficiency tax assessment against GDI, no less than the Commissioner herself allowed such re-investigations.

The “first re-investigation”, which is no longer warranted because my tax assessment which remained undisturbed after review and evaluation by high-ranking officers in the district and regional levels of the Bureau and already covered by Final Assessment Notices (FANs) bearing Demand No. 41-B072-07 and all dated October 29, 2010 obtained finality, was assigned to Revenue Officer STANLEY ONG, under Group Supervisor GREGORIO S. TUMANGUIL. Mr. STANLEY ONG was the same revenue officer who conducted the review of the case and recommended for the issuance of the statutory notices of assessment (PAN and FANs) when he was yet with the Assessment Division of the Regional Office in Quezon City.

I am not a lawyer though I believe that Revenue Officer STANLEY ONG who conducted the “first re-investigation” could no longer disturb my tax assessment by himself for reasons of principle of estoppel. The equitable principle of estoppel forbids the revenue officer who conducted the “first re-investigation” from taking inconsistent position against his concurrence to my original audit findings that culminated in the deficiency tax assessment amounting to P1.56 billion which is already FINAL, EXECUTORY and DEMANDABLE but which was re-investigated by no other than him.

The result of the “first re-investigation” conducted by revenue officers STANLEY ONG and GREGORIO TUMANGUIL, both of BIR Revenue District Office (RDO) no. 41, Mandaluyong City, was a HOCUS-POCUS.

The “second re-investigation”, which again is no longer necessary because my tax assessment obtained finality, was referred to ATTY. GRACE CRUZ of the National Investigation Division, BIR National Office in Diliman, Quezon City. I strongly admire ATTY. CRUZ of her investigative expertise in administrative cases. Lest I be misconstrued.  I am not saying that ATTY. CRUZ is short of proficiency in tax accounting and tax auditing. No result of re-investigation was submitted by ATTY. CRUZ.

So, how can Henares claim that her groups of revenue officers who conducted the two (2) separate re-investigations came up with the same findings that my tax assessment against GDI was incorrect?

What is crystal clear is that, Henares deliberately deceived the FILIPINO people by making excuses to conceal the real truth about this bigtime tax evasion case.


Henares and her minions claimed that the compact disc (CD), which I presented to the RATE “Run after Tax Evaders” team,  was allegedly not compliant with the requirements prescribed under Revenue Memorandum Order (RMO) No. 29-2002.

The RATE coordinator, members, and Mr. Wilfredo Reyes, the pioneer CAATTs (Computer-Assisted Audit Tools and Techniques) user, failed to consider and evaluate the documents attached to the docket of GDI case and the findings for deficiency tax assessment which were based on entries per duly-registered books of accounts (hardbound computer-generated), as I have appropriately validated; and other independent relevant documents, such as but not limited to, Franchise Agreement; Technical Service Agreement, and other BIR returns filed by GDI, such as: VAT returns and Final Withholding Tax Remittance Returns.

The CD, which was neither mentioned nor objected to by GDI in its INVALID protest, is used by Henares and her minions as scapegoat in not filing tax evasion case against GDI by claiming that said CD is not compliant with the requirements prescribed under RMO No. 29-2002 - that it should be properly labeled with the name of the taxpayer, taxable year and serial no. and volume no. and signed by the taxpayer and RDO.

I pointed out that GDI adopts a “computer-assisted accounting system” wherein it is still required to register a “hardbound computer-generated books of accounts” which were the bases of my audit findings. Thus, the CD, which they used as scapegoat in not filing fraud case against GDI, need not be strictly compliant with the requirements provided under the aforesaid RMO in regards to the markings to be inscribed thereon.

RMO No. 29-2002 clearly provides that in case the taxpayer has no capability to submit in CD-ROM form, procedures under the MANUAL SYSTEM shall prevail. In other words, if the taxpayer adopts a computer system of accounting but has no capability to integrate the different components of accounting system (i.e., books of accounts and other related accounting records) in a CD-ROM form, it shall still be required to register a “hardbound computer-generated books of accounts”, as in the case of GDI.

I suggested to the RATE team that they may recommend for the issuance of a Subpoena Duces Tecum (SDT) to compel GDI produce its duly-registered hardbound computer-generated books of accounts, but the suggestion was just ignored.


Othello Dalanon

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