DOCTRINES IN TAXATION: Escape from Taxation (Willful Blindness Doctrine)

People of the Philippines vs. Gloria V. Kintanar In response thereto, the BIR required the spouses to
C.T.A. EB CRIM. NO. 006
(C.T.A. CRIM. CASE NOS. 0-033 & 0-034) submit additional documents within 60 days. Again, the spouses
December 3, 2010
failed to comply with the said request; consequently, the
NATURE OF THE CASE: A Petition for Review of the assessment and the demand letter became final, executory and
decision rendered by the Former Second Division of the CTA demandable.
which found Gloria Kintanar guilty of failure to file her Income
Tax returns for years 2000 and 2001.
The prosecution proved that Gloria Kintanar failed to file
FACTS: Spouses Benjamin Kintanar and Gloria V. her ITR’s for the years 1999-2001 and found her liable for
Kintanar were distributors or independent contractors of deficiency income taxes arising from income earned from FLPPI.
Forever Living Products Phils. Inc. (FLPPI). It all began when the
Gloria Kintanar testified that she filed her ITR’s for
Investigation Division of the BIR received confidential
taxable years 2000-2001. She denied having willfully, unlawfully
information of an alleged tax evasion scheme of the Spouses
and feloniously failed to file her ITR on said years as she has no
Kintanar. As a result thereof, BIR issued a Letter of Authority to
personal knowledge of the actual filing of the said returns
examine the books of accounts and other accounting records for
because it was her husband who filed the ITR’s. Her husband on
taxable years 1999 to 2002. The LOA was received by Mr.
the other hand testified that he filed the ITR’s for the years 1997-
Kintanar on April 3, 2003. Gloria Kintanar failed to submit the
2004 through their hired accountant who prepared and filed
required documents.
their returns. Because he relied upon his accountant, he only
Thereafter, several notices and a subpoena were sent to browsed the returns; therefore, he has no knowledge to the
her, by the BIR but the she remained uncompliant. amount stated thereon and to the address which their
accountant filed their returns to.
On August 31, 2004 the husband of Gloria Kintanar filed
a protest to the Letter of Demand and Assessment notices sent The Former Second Division found Gloria Kintanar guilty
by the BIR. Photocopies of the spouses’ joint income tax returns beyond reasonable doubt of Violation of Section 255 of the NIRC
for the years 2000-2002 were attached to the protest.

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 DOCTRINES IN TAXATION: Escape from Taxation (Willful Blindness Doctrine)

of 1997. Hence, Gloria Kintanar filed this instant petition before a. the accused is a person required to make or file a
the CTA En Banc. return;
b. the accused failed to make or file a return at the time
ISSUES: Did Petitioner Gloria Kintanar violate Sec. 255 of
required by law; and
the NIRC for failure to make or file her returns? Was her failure
c. That failure to make or file a return was willful.
to make or file a return willful?
All of the aforementioned elements are present in this
ANSWER/RATIONALE/HELD: Yes, Gloria Kintanar is
case.
guilty beyond reasonable doubt for failure to make or file a
return under Section 255 of the NIRC . As to the 1st element, Gloria Kintanar is duty bound to
make or file a return under Section 51 of the NIRC. Considering
Yes, she the Court found her to have willfully and
that the she earned a substantial income as distributor of FLPPI;
deliberately failed to file her returns for the taxable years 2000-
she is therefore required to make or file her annual income tax
2001.
return pursuant to Sec. 51 of the NIRC.

Section 255 contemplates four different situations

As to 2nd element, she failed to make or file her ITR’s for
punishable by law, for failure to:
the taxable years 2000-2001. Gloria Kintanar had no record that

1. To pay any tax; she filed the required ITR’s within the reglementary period to

2. To make a return; any of the Rev. District Offices of the BIR. The only record the BIR

3. To keep any record; and has was when she was registered as a one-time transaction tax

4. To supply correct and accurate information. payer for capital gains and documentary stamp in Cavite. The
petitioner presented 2 ITR’s allegedly filed in the RDO of
Petitioner Gloria Kintanar is charged with failure to make Novaliches. However, the court did not give credence to the
or file a return. The elements of which are the following: authenticity of the document as it contained material flaws. The
ITR’s were in itself incomplete, filed in an RDO having no

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 DOCTRINES IN TAXATION: Escape from Taxation (Willful Blindness Doctrine)

jurisdiction over the place of residence of Mrs. Kintanar and even An act or omission is "willfully" done if done voluntarily
her husband admitted that he did not even read the contents of and intentionally and with specific intent to do something the
the ITR and does not know where these ITR’s were supposedly law forbids, or with specific intent to fail to do something the
filed by their accountant. The 2 certifications submitted by law requires to be done; that is, with bad purpose to either
Kintanar were likewise tainted with various defects to wit; a) the disobey or disregard the law. A willful act may be described as
certificates are undated; the certificates were issued by the RDO one done intentionally, knowingly and purposely, without
in Novaliches which has the jurisdiction over the address justifiable excuse (Black's Law Dictionary, 51ed. p.1434).
reflected on the accused’s ITR. However, the ITR’s were stamped
Under the law, Gloria and her husband are obliged to
received by the RDO in Cubao; and lastly, the signatory of the
file their ITRs for taxable years 2000 and 2001. Thus, Gloria’s
certificate was not presented nor was there an attempt to
sole reliance on her husband to file their ITRs is not a valid
present him to attest the veracity of the certificates.
reason to justify her non-filing. Being an experienced
As regards the 3rd element of "willfulness", it was businesswoman and having been an independent distributor of
sufficiently proven beyond reasonable doubt that petitioner FLPPI since 1996, she ought to know and understand all the
deliberately failed to make or file a return. matters concerning her business. This includes knowledge and
awareness of her tax obligation in connection with her
Willful in the tax crimes statutes means voluntary,
business. She should know how much are her tax dues, the
intentional violation of a known legal duty, and bad faith or bad
details stated on the ITRs, where the same are filed, and
purpose need not be shown [Mertens' Law of Federal Income
other important facts related to the filing of her ITRs; after all,
Taxation, Chapter 47.05, page 28, Volume 13, see U.S. v. Green,
these matters concern her finances. There were no affirmative
757 F2d 116,85-1 USTC 9178 (CA7 1985), in which the Court,
acts on the part of Gloria Kintanar to make sure that her
Citing U.S. v. Moore, 627 F2d 830 (CA7 1980) and U.S. v.
obligation to file her ITRs had been fully complied with. Such
Verkuilen, 690 F2d 6-18, 82-2 USTC 9618 (CA7 1982), upheld
neglect or omission, as aptly founded by the Former Second
the conviction of a tax protester for willful failure to file
returns.

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 DOCTRINES IN TAXATION: Escape from Taxation (Willful Blindness Doctrine)

Division, is tantamount to "deliberate ignorance” or "conscious

avoidance".

Likewise, Gloria Kintanar was duly informed that no ITRs

were filed, nor recorded under her name. There were several
notices sent to her by the BIR to comply with her tax obligations,
but she opted not to comply. Evidently, such non-compliance
with the BIR’s notices clearly shows her intent not to file her
ITRs.

Finding no reversible error, the Court En Banc affirms

the assailed decision and Resolution of the Former Second
Division of this Court.

RULING: WHEREFORE, premises considered, the present

Petition for Review is hereby DENIED. The assailed Decision
dated August 26, 2009 and Resolution dated November 26,
2009 of the Former Second Division are hereby AFFIRMED.

SO ORDERED.

Reported by: Clavel A. Tuason Page 4