The Philippine Tax Whiz discusses the liabilities and penalties of erring accountants including BIR officers under Section 257 of the Tax Code
Help! My accountant recommended that I falsify my entries to lower my tax liabilities. What should I do?
Look for another accountant who will not ask you to violate the Tax Code.
If your accountant does falsify any report or statement, he may face penal liabilities under Section 257 of the Tax Code, to wit: “any financial officer or independent CPA who (1) willfully falsifies any report or statement related to an examination or audit, or renders a report which has not been verified by him personally or under his supervision, or (2) certifies financial statements of a business enterprise containing an essential misstatement of facts would face penal liabilities.”
Also, a person who examines the books of accounts of a taxpayer, but is not a Certified Public Accountant (CPA), will also be liable. The same goes for persons who offer to sign and certify the financial statements of a business without actual audit.
Violators are punished by a fine of P50,000 to P100,000, and imprisonment of two to six years. CPAs who commit the same violations will automatically lose their CPA license upon conviction.
What can I do if a BIR officer attempts to extort money from me in exchange for not subjecting my business to an actual audit?
You may file a complaint against the erring BIR officer.
Under Section 269 of the Tax Code, an employee of the Bureau of Internal Revenue (BIR) who extorts taxpayers face the following penalties:
- Fine of P50,000 to P100,000
- Imprisonment of 10 to 15 years
- Perpetual disqualification from holding public office, from voting, and from participating in any public election
Other than extortion, BIR officers who accept bribes (e.g., demand/accept “fees” that are not authorized by law, demand/accept compromise without the authority of law, etc.) as well as those who offer to submit a report or assessment without examining the taxpayer’s books of accounts are liable to the same penalties under Section 269.
The same penalties apply for deliberately failing to act on the application for refunds within the prescribed period.
Taxpayers need to protect themselves from these unscrupulous CPAs and BIR officers. Tolerating or engaging with these dishonest accountants would only result in more headaches, penalties, and compromises. As taxpayers, we need to know our rights and obligations, in order to make sure that we are not taken advantage of. If you are interested to learn more, you can consult with us. Just download the TaxWhizPH Mobile App for free and book a consultation.
Originally Published in Rappler.com