BIR to conduct lifestyle checks on flashy taxpayers

The Bureau of Internal Revenue (BIR) has started targeting individuals with plush lifestyles but who cut tax payments or avoid these altogether. Revenue Memorandum Order 19-2010, which lays down the guidelines for the bureau’s Taxpayers’ Lifestyle Check System, was signed and issued by BIR Commissioner Joel L. Tan-Torres on Tuesday. "The taxpayer lifestyle check is directed at individuals with substantial wealth and opulent lifestyle but pay only small amount of taxes," he said in a press conference. "You can only spend what you earn as a rule," he added. There are several individual taxpayers with substantial investments and assets and/or conspicuous lifestyles, but have relatively small income declared and, consequently, reduced income tax payments," the revenue order said. Under the order, the BIR aims to track and nail down such individuals by accessing records of state offices and private groups, particularly the Land Transportation Office, Bureau of Immigration, Maritime Industry Authority, Civil Aeronautics Board, Land Registration Authority, registries of deeds and Manila Electric Co. It will also access records of airline and shipping companies, resorts, membership clubs and similar establishments; homeowners’ associations; real estate firms; credit card companies; as well as statement of assets, liabilities and net worth and/or amnesty returns filed under Republic Act 9480. Tan-Torres said he expects the data collected to better enable the bureau to check whether those with lavish lifestyles have been paying the right amount of taxes. If a taxpayer is found to have acquired assets and has been living a lifestyle that is not proportionate to his declared income, the bureau will issue a letter of authority that marks the start of a formal probe. — BusinessWorld