SC: Acquittal in tax case does not erase taxes due

The Supreme Court (SC) in a decision said that being acquitted of a criminal tax violation does not exempt a taxpayer from having to pay the taxes.

In a decision penned by Associate Justice Mario V. Lopez dated 24 January, the SC’s Second Division dismissed the criminal cases against E & D Parts and Supply Inc. and its treasurer, Margaret L. Uy, for lack of evidence.

The Office of the Solicitor General (OSG) had filed criminal cases before the Court of Tax Appeals (CTA) against the company and Uy for failing to file the company’s income tax return and pay income and value-added taxes.

The CTA dismissed the criminal cases due to insufficient evidence, which showed that Uy was a responsible officer of the company and, therefore, could not be held criminally liable for the company’s actions.

Uy’s acquittal also removed the element of willfulness in the company’s non-payment of taxes.

The CTA dismissed the related civil case that would have determined the amount in taxes the company owed.

The OSG argued that the company should still pay the taxes due regardless of the acquittal.

The SC ruled that a taxpayer’s obligation to pay taxes arises from the law itself, and not from committing a criminal act like tax evasion. Therefore, even if a taxpayer is acquitted of a criminal charge, they remain liable for unpaid taxes.