Tax court drops tax evasion against talent promoter
The Court of Tax Appeals (CTA) has cleared a model and talent promoter of tax evasion charges because the Bureau of Internal Revenue’s (BIR) final assessment notice (FAN) did not mention the date when the alleged deficiency taxes should be paid.
The BIR filed the case after its national investigation division discovered that Bernardo B. Anacta substantially under-declared the earnings of his company, Monaco Models and Casting Agency of Madrigal Building, Ayala Avenue, Makati.
Records showed Anacta allegedly declared total income of P1.1 million for the year 2009.
However, audit showed the firm generated income of more than P7.6 million based on the information supplied by its clients to the bureau.
The respondent argued that models and talents got 70 percent of the total earnings, while the company retained 30 percent.
Monaco supplies talents to advertising agencies.
In a 26-page decision, the court said the disputed FAN was invalid as it did not contain the due date of payment as required by law.
It said the FAN shall not only contain the computation of the tax liabilities, but also the deadline for the payment of deficiency tax.
Citing a decision of the Supreme Court on the similar issue, the court said the due date is vital “as it signals the time when penalties and interest begin to accrue against the taxpayer.”