Court clears ex-Chief Justice Sereno of tax evasion

The Court of Tax Appeals (CTA) has cleared former Chief Justice Maria Lourdes Sereno of tax evasion due to lack of evidence.

In a 50-page ruling, the CTA said there is "no prima facie evidence of a false return" in Sereno's case because the Bureau of Internal Revenue (BIR) did not present any computation to ascertain that there has been any misdeclaration in her income tax returns.

"We find that the error in petitioner's (Sereno) BIR Form 2316 and annual income tax return, if there was any, was committed without any intent to evade the tax payment on the part of petitioner," the CTA said. 

"If there were such an intent, petitioner would not have filed annual income tax returns for tax years 2012, 2014, and 2015 and voluntarily paid income taxes in the amounts of P253,665.28, P50,800.00 and P1,600.00, respectively, in addition to the taxes withheld and paid by the Supreme Court," it added.

"Moreover, as an employee, she reasonably relied on the BIR Form 2316 issued to her by her employer, which served as her annual income tax return during the period, without separately paying additional taxes for 2012, 2014, and 2015."

The tax court also said that the BIR belatedly served Sereno a Formal Letter of Demand/Final Assessment Notice (FLD/FAN) for tax years 2011 to 2016 in November 2018 because the assessment for tax years 2011 to 2014 already lapsed by the said date.

As such, the tax court said that FLD/FAN issued to Sereno was void since it was issued and served beyond the three-year prescriptive period.

The tax court said BIR had another three years or until November 5, 2021 to enforce collection of the assessed deficiency taxes by distraint, levy, or court proceeding stemming from its November 2018 notices.

The BIR, however, only initiated such collection enforcement only on May 10, 2022 when it filed an answer to Sereno's petition for review. By that time, the CTA said the BIR’s right to collect the assessed deficiency taxes for 2011 to 2016 had already lapsed.

"Thus, even if the assessment for tax years 2015 to 2016 has not yet prescribed, the BIR can no longer collect from petitioner the assessed deficiency income taxes for the period as he was already barred by prescription," the CTA said. 

"The Court ought to reiterate that while taxes are the lifeblood of the nation, the Court cannot allow tax authorities indefinite and infinite periods to assess and collect alleged unpaid taxes," it added. —KBK, GMA Integrated News