DOJ recommends filing of tax evasion charges vs Juday

The Department of Justice (DOJ) recommended yesterday the filing of tax evasion charges against movie and television actress Judy Anne "Juday" Santos for underdeclaring her income for 2002, which resulted in her alleged failure to pay tax liabilities amounting to P1,395,116.24.

Assistant Chief State Prosecutor Anthony Fadullon said the DOJ panel led by lawyer Olivia Laroza-Torrevillas conducted the preliminary investigation into the tax evasion complaint filed by the Bureau of Internal Revenue (BIR) against Santos and found probable cause to indict her for violation of the National Internal Revenue Code (NIRC) of 1997.

"There was prima facie evidence that she (Santos) underdeclared her income derived in 2002," Fadullon said.

He said the DOJ panel also dismissed the counter-charges filed by Santos against former BIR commissioner Guillermo Parayno and five other BIR officials for insufficient evidence.

"Santos can still file a motion for reconsideration within 10 days from receipt of the resolution of the DOJ panel," he said. "She can also go up on appeal and file a petition for review before Secretary Raul Gonzalez. The case will be filed against her anytime this week."

In indicting Santos, Torrevillas debunked Santos’ claim that she overpaid her income tax for taxable year 2002: "The income tax due from respondent (Santos) in taxable year 2002 is P1,397,973.69; how can there be overpayment of tax when respondent paid a small amount of P2,857.45 as income tax in 2002?"

According to Torrevillas, the BIR revenue officers computed that Santos’ taxes due come to P1,395,116.24, "exclusive of penalty and interest."

Based on Santos’ compliances for 2001, 2002 and 2003 and her income tax return for 2002 and other BIR documents, Santos earned a total of P8,033,332.70 from television network ABS-CBN.

In the course of the BIR’s investigation, revenue officers Roderick Abad, Stimson Cureg, Vilma Caronan, Rhodora delos Reyes and Teodora Purino found that Santos failed to report the income she derived from movie outfits Star Cinema Productions and Viva Productions Inc.

The BIR documents also showed that Santos failed to declare the actual income she earned from ABS-CBN.

Torrevillas said these documents show that "in the year 2002, Santos earned income in the amount of P14,796,234.70 derived from the ABS-CBN Broadcasting Corporation amounting to P11,055,554.70; Viva Productions, Inc., P2,925,000 and Star Cinema, P815,680."

Because Santos failed to declare in her income tax return for the year 2002, the amount of at least P6,762,902, or 84.18 percent of her declared income, with an estimated tax liability in the amount of P1,718,925.52, the BIR examiners recommended Santos’ prosecution for substantial underdeclaration of income.

This evidence constitutes prima facie evidence of false or fraudulent returns punishable under the NIRC, the BIR said.

Santos has denied the charges, saying the joint affidavit of the revenue examiners accusing her of underdeclaring her income "is absolutely falsified and grossly perjured."

She said the complaint merely stated the estimated tax liability of P1,718,925.52, but failed to allege the correct amount of taxes withheld and the amount of the taxes she needed to pay.

She accused the BIR officials of deliberately and maliciously omitting her withheld taxes, resulting in the erroneous computation of her due taxes for 2002.

Santos said the total amount of taxes withheld or docked from her income is P2,814,355.63 and that she overpaid her income tax by P1,095,430.11.

She said the BIR grossly and inexcusably misapplied the NIRC when they failed to properly compute her taxes due, adding that the BIR also failed to issue a notice of assessment indicating her tax liability.

She also denied signing any false or fraudulent document in connection with her 2002 income tax return, saying the preparation and filing of the tax return was done in good faith by her accountant.

In her counter-charges for perjury and graft against Parayno and the five BIR officers, Santos said Parayno, Abad, Cureg, Caronan, Delos Reyes and Purino violated the Revised Penal Code and the Anti-Graft and Corrupt Practices Act and the Code of Conduct for Public Officials.