WEEKLY TAX UPDATES [September 15, 2026]

IN CRIMINAL TAX CASES FOR FAILURE TO PAY DEFICIENCY TAXES, THE GOVERNMENT’S RIGHT TO PROSECUTE PRESCRIBES IN FIVE (5) YEARS; HOWEVER, NO CRIMINAL LIABILITY CAN ARISE FROM A VOID ASSESSMENT & CORPORATE OFFICERS CANNOT BE HELD LIABLE ABSENT PROOF OF THEIR ACTIVE PARTICIPATION IN THE ALLEGED TAX VIOLATION

Petitioner People of the Philippines filed criminal Information against Respondents Lincoln Port Parkways Warehousing and Logistics, Corp. and its alleged President, Medardo P. Pineda, for violation of Section 255, in relation to Section 253(d) and Section 256 of the Tax Code based on their alleged willful failure to pay deficiency Income Tax and Value-Added Tax (VAT) for taxable year (TY) 2017 after the assessments supposedly became final and executory. Petitioner argued that the assessments had already become final, executory and demandable after the corporation failed to file a valid protest against the Formal Letter of Demand/Final Assessment Notice (FLD/FAN). It maintained that the criminal cases were timely instituted within the five-year prescriptive period under Section 281 of the Tax Code and that the Respondents willfully failed to pay the assessed deficiency taxes despite demand and collection efforts by the Bureau of Internal Revenue (BIR). On the other hand, Respondents contended that the assessments were void for non-compliance with the due process requirements under Section 228 of the Tax Code because the BIR failed to properly conduct and establish the required Notice of Informal Conference and other assessment procedures. Respondent Pineda likewise denied active participation in the corporation’s tax affairs and questioned the sufficiency of the evidence linking him to the alleged violation.  In ruling, the criminal actions were filed within the applicable five-year prescriptive period and were therefore not barred by prescription. However, the Court found that the Prosecution failed to establish compliance with the due process requirements for the issuance of deficiency tax assessments, particularly the proper conduct of an Informal Conference and the valid issuance of assessment notices. As a result, the Preliminary Assessment Notice (PAN) and FLD/FAN were declared VOID, and without a valid assessment there could be no lawful obligation to pay the alleged deficiency taxes. Likewise, the Prosecution failed to prove that Respondent Pineda actively participated in or was responsible for the alleged offense, noting inconsistencies regarding his involvement with the corporation and the absence of direct evidence linking him to the non-payment of taxes. Consequently, the essential elements of the offense under Section 255 of the Tax Code were not established beyond reasonable doubt. Respondents were ACQUITTED, and the bail bonds posted by Respondent Pineda were ordered CANCELLED. [PEOPLE OF THE PHILIPPINES VS LINCOLN PORT PARKWAYS WAREHOUSING & LOGISTICS, CORPORATION & MEDARDO P. PINEDA, CTA CRIMINAL CASE NO. O-1079 & O-1080, SEPTEMBER 3, 2026]

ONLY THE OFFICE OF THE SOLICITOR GENERAL (OSG), OR BIR LAWYERS PROPERLY DEPUTIZED BY THE OSG, MAY REPRESENT THE PEOPLE OF THE PHILIPPINES IN APPELLATE PROCEEDINGS; A JUDGMENT OF ACQUITTAL CANNOT BE REVIEWED THROUGH A PETITION FOR REVIEW WITHOUT VIOLATING THE ACCUSED’S CONSTITUTIONAL RIGHT AGAINST DOUBLE JEOPARDY

Petitioner People of the Philippines, represented by the Bureau of Internal Revenue (BIR), filed a Verified Petition for Review seeking the reversal of the CTA First Division’s dismissal of its Petition for Certiorari, as well as the Regional Trial Court (RTC) Orders that granted the Demurrer to Evidence and acquitted Private Respondents Lily Pedroso, Ernesto Pedroso, and Elvin Louie Pedroso Reyes of charges for violations of Sections 254 and 255 of the Tax Code. Petitioner argued that the CTA First Division erroneously ruled that its Petition for Certiorari was filed out of time. It maintained that BIR lawyers, as deputized prosecutors, had authority under the Tax Code and existing arrangements with the Department of Justice (DOJ) and Office of the Solicitor General (OSG) to prosecute and pursue tax cases. Petitioner further contended that the 60-day period for filing the Petition for Certiorari should be reckoned from the BIR’s receipt of the RTC Order and not from the earlier receipt by the Public Prosecutor. It also asserted that the RTC gravely abused its discretion in granting the Demurrer to Evidence based on erroneous and shifting grounds, including the alleged absence of a valid assessment and the non-inclusion of the partnership as an Accused. On the other hand, Respondents argued that the Petition for Certiorari was correctly dismissed for being filed beyond the reglementary period because the Public Prosecutor had received the RTC’s Order earlier than the BIR. They likewise maintained that the RTC properly dismissed the criminal cases after finding that the Prosecution failed to establish guilt beyond reasonable doubt and that the partnership, allegedly liable as taxpayer, was not even impleaded in the Information. Respondents further questioned the BIR’s legal standing to independently pursue the appellate proceedings without proper authority from the OSG. In ruling, the BIR had no legal authority to independently represent the People of the Philippines in appellate proceedings absent proof of deputization from the OSG, which remains the government’s principal counsel in appeals. The Court found that the BIR lawyers failed to present the requisite OSG authorization, rendering the Petition fatally defective. More importantly, the Court ruled that the remedy pursued was improper because it effectively sought a review of the RTC’s judgment of acquittal. Since the RTC had granted the Demurrer to Evidence and acquitted the Accused on the merits after trial, legal jeopardy had already attached. Any attempt to reopen, review, or reverse the acquittal would violate the constitutional protection against double jeopardy. The CTA En Banc emphasized that a judgment of acquittal is immediately final and unappealable, even if allegedly erroneous, absent a showing that the Prosecution was denied due process. Finding no such denial, the Court upheld the ACQUITTAL and DISMISSED the petition. [PEOPLE OF THE PHILIPPINES VS REGIONAL TRIAL COURT OF THE CITY OF MANILA ET AL., CTA EN BANC CASE NO. 3072, AUGUST 13, 2026]