Cedric Lee, ex-wife seek dismissal of P194M tax evasion raps

Embattled businessman Cedric Lee and his estranged wife Judy Lee have asked the Department of Justice (DOJ) to dismiss what they both called as "trumped-up" tax evasion complaints filed against them by the Bureau of Internal Revenue.

Judy even accused Cedric of assigning to her company shares, which she said she does not own, just so she could become a member of the board of directors.

In his counter-affidavit, Cedric blamed the chief accountant of his corporation Izumo Corp., Susan Nace, for his company's alleged failure to pay the right taxes from 2006 to 2009.

“I deny that there was a conscious and deliberate effort on my part to hide the income of the Corporation and evade the payment of taxes, rather the discrepancies, if any, are merely due to inadvertence to verify thet actual revenues of the Corporation for the years involved,” he said.

Cedric, who is also facing grave coercion and serious illegal detention charges in connection with the January 22 mauling of TV host-actor Vhong Navarro, said he has no “personal knowledge” on the actual revenues collected per billings made by Nace.

“To reiterate, the accountant of the corporation prepared the financial statements and filed the ITRs,” he said.

He said he does not have "personal knowledge" on the release of disbursement vouchers and official receipts, as well as the receipt of BIR forms from the local governments of San Juan, Pasay, Butuan, Tagudin, IlocosSur and Davao del Sur.

Cedric also noted that his company was subjected to an audit assessment on September 22, 2010 for the period from January 1 to 31, 2009, "to which the corporation is gearing for a compromise settlement."

Meanwhile, Judy insisted she had no participation in the management, supervision or control of the day-to-day operations of Izumo, including its financial transactions.

She insisted that she does not own 20 percent of the company's total shareholdings for 2012.

“The fact of the matter is I actually do not own those shares as it was just assigned to me by Mr. Cedric Lee for qualification purposes in order to qualify me as a director because the slots for the members of the board of directors could not be filled up and I was one of those chosen by Mr. Cedric Lee to fill up one director position,” she said.

Judy said she has been separated from Lee since 2005, and since then had no dealing with him and his companies.

“Cedric Lee can very well confirm all the foregoing facts for its truth,” she said.

The BIR is suing Lee, his company Izumo Contractors Inc, and others, for supposedly not paying taxes amounting to P194.47 million.

The BIR said the suspects violated Section 254 and 255, in relation to Section 253(dl) and 256 of the amended National Internal Revenue Code of 1997 for their willful attempt to evade paying the right amount of taxes and deliberate failure to supply correct and accurate information on the company's annual income tax return 2006 to 2009.

According to the bureau, it received "confidential information" that Izumo Contractors had been remiss in settling tax liabilities. After a preliminary investigation that established a "prima facie" case of fraud, it issued a letter of authority to examine the company books and other accounting records.

Certifications secured by the BIR from clients of Izumo Contractor revealed the company had earned P302.63 million from 2006 to 2009. Among its clients were the local governments of Butuan, San Juan City, Pasay City, Davao del Sur, and Tagudin, Ilocos Sur.

However, the company declared an income of only P76.22 million from 2006 to 2009, according to the BIR.

The BIR said Izumo Contractors had incurred a tax liability of P194.47 million, including surcharges and interest. —KBK, GMA News