Real Estate Agent Indicted for Tax Exasion

A lot (if not all) of real estate agents and brokers are not paying their taxes because of government failure. One reason is failure of Professeional Regulation Commission (PRC) to implement Section 33 of the Real Estate Service Act of 1999 (R.A. No 9646) that requires every registered and licensed real estate service practitioner to establish and maintain a principal place of business -- as a result these practitioners have to official receipts. The second reason is the failure of the Department of Trade and Industry (DTI) and the Local Government Units (LGU) to require professional license and formal place business for real estate sales outlets who open up business branches. It will also interest you to read the Warning on Real Estate Buying at http://reibs.com.

If you want to read a breathtaking series of articles about Anomalies Sams and Schemes in Real Estate Deals in Philippines, check out http://petalcorin.blogspot.com/search/label/Anomalies%20Scams%20and%20Schemes%20in%20Real%20Estate%20Deals.

Real estate agent indicted in P7.5-M tax evasion case
By Edu Punay (The Philippine Star) Updated January 28, 2011 12:00 AM
URL: http://www.philstar.com/Article.aspx?articleId=652152&publicationSubCategoryId=63

Real estate agent indicted in P7.5-M tax evasion case | The Philippine Star News Headlines

MANILA, Philippines – The Department of Justice (DOJ) has indicted a real estate agent on a P7.5-million tax evasion case filed by the Bureau of Internal Revenue (BIR).

In a resolution signed by Prosecutor General Claro Arellano, the DOJ said it has found probable cause to file charges in court against Marieandy Fricke for violation of the National Internal Revenue Code.

The DOJ found merit in the allegation of BIR that Fricke willfully evaded payment of taxes for the sale of a P30-million property to spouses Melito and Malisa Chua in 2007.

The 1,209-square meter property is located in Greenhills, San Juan City.

Preliminary investigation showed that Fricke falsified the certificate authorizing registration (CAR) and tax clearance certificate (TCC) when she made the transaction.

Assistant State Prosecutor Marlon Almero said Fricke failed to substantiate her claim that she let her broker effect the transfer of the property to the Chuas.

“Given that Fricke had the obligation to pay the capital gains tax and the documentary stamp tax pertaining to the subject transaction, and that she failed to make said payment, probable cause obtains against her for violation of Section 254 (Attempt to Evade or Defeat Tax) of the National Internal Revenue Code,” the DOJ’s eight-page resolution read.

“Inasmuch as she did not pay the corresponding taxes, she ought to know that it was impossible for the title to be validly transferred to her buyer, and the only way it could be done was by extralegal means,” the DOJ said.

“Using the falsified certificates did the job for her and she knowingly did it, or caused it to be done, because that was the only way she could comply with her obligations to the Chuas,” the resolution stated.

Prosecutors also recommended the filing of separate criminal charges against Fricke for failure to file tax return and for using falsified or fake account forms.

But the DOJ junked the complaint of the BIR against the Chua couple for alleged non-payment of some P1.5 million in documentary stamp tax for the sale of the property.

The Chuas said Fricke promised to facilitate the transfer and registration of the land title, and that she be given money for the payment of documentary stamp tax, transfer tax, registration fees and others.

“Thus, on Aug. 29, 2007, they deposited the amount of P800,000... They likewise claim they have no slightest suspicion that the transaction was tainted with anomaly because the owner’s duplicate copy of the title to the property was issued to them, while its original exists in the Registry of Deeds for San Juan,” the DOJ stated in its resolution.

The DOJ said “an assiduous evaluation” of records has shown that pertinent taxes have not been paid and that the documents in the transaction have been falsified.

“There is reason to believe that the Chuas had been relieved of their obligation to shoulder the documentary stamp tax because they had already given the payment thereof to Fricke as per their agreement,” the resolution read.

Meanwhile, tax evasion charges have also been filed against husband and wife doctors at the Asian Hospital and Medical Center in Muntinlupa City.

Respondents in the case were Vicente Gana Castillo and Ma. Teresa Chan Castillo.

In its complaint, the BIR said the couple falsified the filing of their 2009 income tax returns.

They were also charged with failing to supply the correct and accurate information in their 2009 quarterly value added tax (VAT) returns.

The two doctors, residents of the posh Bel-Air Village in Makati City, are registered with the BIR as professional doctors engaged in private medical and other health services.

According to the BIR’s initial investigation, Teresa Castillo received income payments amounting to P7.43 million but she did not file her income tax for 2009.

Confronted with the findings of the BIR, Teresa submitted an ITR allegedly filed by the couple with the BIR.

Investigators, however, found the same ITR utterly dubious since the receiving stamp of the BIR shown in the document did not bear the complete name of the receiving personnel. “Moreover, two BIR Revenue District Office certified that the couple did not file any ITR for 2009,” BIR Commissioner Kim Henares said yesterday.

The BIR said the total income tax liability of Teresa Castillo amounted to P2.44 million, inclusive of surcharges and interests. Her husband’s tax deficiency amounted to at least P470,000.

For failing to declare medical fees amounting to P2.2 million in her quarterly VAT returns, the BIR also ordered Teresa to pay additional P1.26 million in VAT, inclusive of surcharges and interests.

Overall, the BIR said the total estimated tax deficiency of the Castillo couple amounted to P4.18 million.

The case against the two doctors is the 25th filed under the Run After Tax Evaders (RATE) program of the BIR. – With Iris Gonzales

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