The Bureau of Internal Revenue (BIR) today filed a criminal complaint with the Department of Justice against JEANE CATHERINE LIM NAPOLES(NAPOLES) for willful attempt to evade or defeat tax and deliberate failure to file return and pay tax for taxable years 2011 and 2012 pursuant to Sections 51 (A)(1)(a) and 74 in relation to Section 254 and Section 255 of the National Internal Revenue Code of 1997, as amended (Tax Code).
NAPOLES is a registered taxpayer of BIR Revenue District Office No. 43-A, East Pasig City with address at No. 635 San Isidro Ayala Alabang, Muntinlupa City.
Information gathered during investigation disclosed that NAPOLES was able to acquire and register in her name real properties during the taxable years 2011 and 2012. Among those properties is a residential house located in Los Angeles, California, USA and a farm lot in Bayambang, Pangasinan.
NAPOLES acquired in 2011 a condominium unit in Los Angeles, California worth P54.73 million. She also had a 1/9 share in a Bayambang, Pangasinan property purchased in 2012 equivalent to P1.49 million. BIR records, however, showed that NAPOLES did not file any Income Tax Return (ITR) for taxable years 20011 and 2012; nor were there any records of returns filed that will prove that gifts, bequests or devices were given to her.
Using the Expenditure Method of Investigation, the unreported income of NAPOLES was established by a comparison made between the amount of money she spent in buying the aforementioned properties and her unreported income.
The Expenditure Method of tax investigation is based on the theory that if the subject taxpayer’s expenditures during a given year exceed his reported income, and the source of the funds used to make the expenditures is unexplained, such expenditures represent unreported income.
Thus, the difference between the aggregate yearly expenditure of NAPOLES for taxable years 2011 and 2012 and total amount of unreported income for the same years constituted a substantial under-declaration of more than thirty percent (30%), and such unreported income is considered as prima facie evidence of her fraudulent scheme to defeat payment of taxes.
The total income tax liability of NAPOLES was computed at P32.06 million, inclusive of surcharges and interests, broken down into: P31.38 million in 2011 and P0.68 million in 2012.
The case against JEANE CATHERINE LIM NAPOLES is the 191st filed under the RATE program of the BIR under the leadership of Commissioner Kim S. Jacinto-Henares. (reytdlc)