Corona’s daughter, son-in-law file counter-affidavits vs tax rapsBy Tetch Torres
MANILA, Philippines—Daughter of former Chief Justice Renato Corona and her husband asked the Department of Justice (DoJ) to dismiss the tax evasion case filed against them.
Carla Corona-Castillo and her husband Dr. Constantino Castillo, in separate counter-affidavits filed with the DoJ, said the Bureau of Internal Revenue did not conduct a formal investigation prior to the filing of the tax evasion complaint against them.
“If the BIR only allowed me to participate in its preliminary investigation prior to the institution of the instant case, I would have adequately explained that I had funds to enable me to purchase the La Vista property,” Carla said in her counter-affidavit.
Corona’s daughter was charged for violating section 254 of the National Internal Revenue Code or attempting to evade or defeat taxes in 2010 and violating section 255 or failing to file an income tax return for the same year.
Her husband on the other hand is also facing the same violation for attempting to evade taxes in 2003 and 2009 and violating section 255 of the NIRC or failing to file an income tax return in 2003.
Based on the complaint, Castillo registered with the BIR in 1998 but filed his income tax returns only from 2005 to 2009.
Castillo declared a total income of only P1.933 million for the five-year period. His wife, on the other hand, only filed income tax returns for only 2008 and 2009 where she declared a total income of only P228,040.
While the Castillo couple’s declared income amounted to less than P3 million, they were able to acquire three properties: a P10.5-million property in Project 3, Quezon City, a P15-million commercial property in Kalayaan Avenue, Quezon City and an P18-million mansion in La Vista, Quezon City.
The BIR said Castillo’s tax liability was P20.25 million while the deficiency income tax liability of Corona’s daughter amounted to P9.93 million.
In her counter-affidavit, Carla said the complaint against her was hastily filed.
She added that the BIR was basing its complaint on “unfounded assumptions” that since she brought a property in 2010, she earned income that same year.
“The purchase by a taxpayer of a property in a given year does not show, moreso establish that he/she earned or received taxable income much less, that he/she earned such taxable income in the same year the property was purchased,” Carla said.
In fact, she said on December 2010, she filed with the BIR Form No. 2551M indicating that the food business she ventured into had been non-operational since third quarter of 2009.
“The BIR did not establish my net worth at the beginning of the questioned taxable period by any competent evidence.. By not doing so, the BIR made it appear that I had no funds or assets prior to the year 2008 when a cursory inquiry would have easily shown that I earned a living as a physical therapist abroad from 1996 to 2002,” she said.
Carla worked as Physical Therapist at the Tampa General Hospital in the US from 1996 to 2002 where she received an estimated cumulative compensation income of no less than US$265,000.00. She said she had substantial savings abroad where she has included her cash gifts which she could have explained had she been given opportunity to explain her side before the case against her was filed at the DOJ.
Her husband, meanwhile said, had he been given the opportunity to explain by the BIR, they will know that the two properties he bought in Quezon City was sourced from a loan.
Castillo said in 2003, is parents helped him purchase the property in Project 3 for P10.5 million while the property he bought in 2009, was through a loan he obtained from the Bank of the Philippine Islands worth P12 million. He said his parents sourced the balance of P3 million of the P15 million purchase price.
“From the foregoing, it is clear that the subject real properties were acquired and purchased using borrowed funds and the bank loan which cannot be considered taxable income. Hence, there is no basis to charge me with willful attempt to evade or defeat any tax liability for either year,” he said.
The two personally appeared before the DoJ and affirmed their affidavits.