BIR target: Erring accountants

After targeting tax evaders with its Run After Tax Evaders (RATE) program — which brought big-time celebrities and entrepreneurs to court — the Bureau of Internal Revenue (BIR) is now eyeing erring accountants.

The revenue agency is set to launch its Expanded RATE (E-RATE) program in a bid to further cut red tape and graft and corruption in the BIR’s tax collection system.

"It is RATE with a twist," said BIR Deputy Commissioner for Legal Matters Gregorio Cabantac. "This new program will target accountants who are instrumental in perpetrating tax evasion schemes for their clients."

Cabantac said E-RATE will render the revision of BIR forms and returns to require taxpayers’ accountants paying more than P500,000 to verify and attest to the truthfulness and correctness of the tax return.

"This will impose accountability on accountants and large taxpayers by making them attest to their tax returns," he added.

According to Cabantac, it is not mandatory now for accountants to sign their clients’ tax returns. Often, accountants would just use a "tax agent" or their accounting clerk to sign the return to avoid accountability, he added.

"Most individuals, including corporations, completely leave the filing of their tax returns to their accountants. These accountants keep their books and employ various illegal tax evasion schemes to reduce their client’s taxes," he added.

Cabantac, who conceptualized the E-RATE, believes the BIR’s efforts to run after unscrupulous accountants will curb tax evasion and generate tax collection through the voluntary payment of correct taxes from honest accountants who have no desire to risk their livelihood.

He said the E-RATE program will greatly reduce the huge deficiency tax assessments on audited cases and avoid graft and corruption in the compromise and settlement of taxes, as voluntary tax payments will now be the immediate duty and accountability of the accountants in charge of them.

As "a bonus," E-RATE will result in the "cleansing of the ranks of accountants," Cabantac said.

Besides the amendment of the BIR forms and returns, Cabantac said the BIR will also use a simple accreditation system for accountants with a Professional Regulation Commission (PRC) license and Securities and Exchange Commission (SEC) accreditation.

He also said accountants will be assigned a BIR number, which will be indicated in all their transactions and communications with the revenue agency.

Cabantac said no accountant will be allowed to practice within the BIR system without an accreditation number and that accountants "will be strictly monitored in their audit cases and rate cases."

Accountants found committing malpractice might be suspended, as their accreditation with the BIR may be canceled, Cabantac said.

Charges may also be filed against them before the PRC, he added.

"This is the BIR’s contribution to President Arroyo’s all-out war against corruption," Cabantac said. "The E-RATE will definitely boost government’s revenue collection and will help fund government programs for the development of our regions."

The BIR has begun consultations with the PRC, Philippine Institute of Certified Public Accountants (PICPA), the Tax Management Association of the Philippines (TMAP), BIR examiners and department heads for their input and coordination on the E-RATE program.

Cabantac said the BIR has been receiving "very encouraging feedback" for its new program.