BIR raps businessman and his CPA for tax evasion

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The Bureau of Internal Revenue (BIR) today filed a criminal complaint with the Department of Justice against ALVIN V. ESGUERRA (ESGUERRA) for willful attempt to evade or defeat tax and for deliberate failure to supply correct and accurate information in his Income Tax Return (ITR) for taxable years 2010 and 2011, in violation of Sections 254 and 255 of the National Internal Revenue Code of 1997, as amended (Tax Code).

Likewise charged was CELIA P. MIRASOL-GUECO (MIRASOL-GUECO), the independent Certified Public Accountant (CPA) who certified the Financial Statements of ESGUERRA for taxable years 2010 and 2011, for violation of Section 257 of the Tax Code.

ESGUERRA is the sole proprietor of FRUIVEG MARKETING with business address at 257 Leen cor. Sampaguita St., Brgy. Cut-Cut, Angeles City, Pampanga. He is a wholesaler of fruits and vegetables.

The case against ESGUERRA arose from a preliminary investigation conducted by the BIR on his alleged tax evasion schemes.

Certifications of income payments obtained from his various customers showed that in 2010, ESGUERRA made sales to Puregold Price Club, Inc. and Puregold Jr. Supermarket, Inc. amounting to P43.97 million and P20.91 million, respectively.

The BIR also discovered that in 2011, ESGUERRA likewise made sales to Puregold Price Club, Inc., Puregold Jr. Supermarket, Inc., Puregold Duty Free, Inc. and Puregold Duty Free Subic, Inc. amounting to P61.41 million, P32.77 million, P0.53 million and P2.13 million, respectively.

A comparison with the sales declared by ESGUERRRA in his ITR amounting to P812,458.50 in 2010 and P75.56 million in 2011 disclosed an underdeclaration of sales of more than 30%. Under the Tax Code, an underdeclaration of more than 30% constitutes prima facie evidence of fraud tantamount to tax evasion.

ESGUERRA was assessed a total deficiency income tax liability of P46.60 million, inclusive of surcharges and interests, broken down into: 2010 – P36.11 million; and 2011 – P10.49 million.

MIRASOL-GUECO, for her part, was included in the charge sheet for issuing an unqualified opinion in her certification of the 2010 and 2011 audited financial statements of ESGUERRA despite knowledge of the existence of such income payments/underdeclarations.

The case against ALVIN V. ESGUERRA and his CPA CELIA P. MIRASOL-GUECOÂ is the 112th filed under the Run After Tax Evaders (RATE) program of the BIR under the leadership of Commissioner Kim S. Jacinto-Henares.