Businesswoman convicted for tax evasion

News alert (tax law):

The Supreme Court’s third division has affirmed the Court of Tax Appeals’ decision finding Gloria Kintanar, a distributor of the Forever Living products, guilty of two counts of violating section 255 of the National Internal Revenue Code, sentencing her to two to four years imprisonment and a fine of P20,000 and ordering her to pay the Bureau of internal Revenue P6.3 million in taxes.

The BIR received the notice from the Supreme Court on January 24, 2012 that denied “with finality” Kintanar’s motion for reconsideration as “no compelling reason exists and no substantial arguments were raised to warrant its reconsideration.”

The CTA en banc promulgated its decision on criminal cases no. O-033 and 0-034 that found Kintanar guilty of two counts of violation of section 255 of the NIRC, or failing to supply the BIR with correct and accurate information, on December 3, 2010.

The BIR filed the case against Kintanar back in 2005 for failing to file her income tax return for 2000 and 2001. Kintanar earned substantial income as independent contractors of Forever Living Products Philippines Inc. and has been asked by the BIR several times from 2003 to 2005 to pay her taxes. FLPPI has been paying her commission for selling its products from 1999 to 2001 that she encashes or clears at the North Greenhills branch of the Bank of Philippine Islands where she maintains an account.

Kintanar who resides in Merville Subdivision in Paranaque presented income tax returns to the BIR where she listed her address as Lagro subdivision in Quezon City. Since Kintanar is a businesswoman, she should know that she has to pay taxes. And even if she claimed that she had entrusted the task of filing her income tax return to her husband who had, in turn, entrusted the duty to an accountant they hired.

While there are provisions for the joint filing of income tax returns for spouses, the CTA said Kintanar’s “sole reliance on her husband to file their ITRs is not a valid reason to justify her non-filing, considering that she knew from the start that she and her husband are mandated by law to file their ITRs.” And being an experienced businesswoman, the CTA said she ought to know and understand all matters concerning her business.