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BIR to go after accountants

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MANILA, Philippines - The Bureau of Internal Revenue (BIR) will be going after erring tax accountants who issued unqualified opinions in their clients' audit reports.


BIR Commissioner Kim Henares said the move is part of government efforts to boost state coffers. She said the agency would be plugging revenue loopholes by going after tax cheats and improving the tax administration system.


The BIR, she said, has already started issuing "show cause letters" to independent certified public accountants (CPAs) who issued unqualified opinions in the audit reports of their clients' financial statements in cases where there were validated and verified material misstatements or misdeclaration.


Henares said this development was brought about by big understatements of declared sales and revenues, which the agency discovered through its third-party information system.


"Records of the BIR show that while the Auditors' Report expressly stated that the said financial statements present fairly the financial position of the taxpayer, a comparison of the declared income of a taxpayer per income tax return and data gathered from third party sources like purchases from suppliers showed otherwise," she said.


According to the BIR's investigation, one taxpayer declared gross sales of P397 million for one year. This was certified by an independent public accountant but third party sources revealed purchases amounting to P645 million, the BIR's investigation showed.


Henares said that in this example, the sales data that should have been declared would have been higher in the normal course of business.


As such, the BIR reminded CPAs that while their responsibility is limited to that of expressing an opinion on the financial statements prepared by their clients, they could easily uncover probable understatements of sales and consequently, tax liabilities, both local and national.


The CPAs concerned were given 10 days from receipt of the show cause letter to explain in writing the findings of the BIR.


The BIR will push for a suspension or revocation of the accreditation of public accountants found to be guilty of issuing unqualified opinions on their clients' financial statements.



Edited by Cary
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