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Thello Dalanon DUNKIN’ DONUTS PHILIPPINES BIGTIME TAX EVADER…/ Philippine Daily Inquirer Chair Marixi Rufino-Prieto firm “Dunkin’ Donuts” deliberately CHEATED payment of taxes. It owes the Filipino people P1.56 Billion tax deficit which has become final, Read more ... executory and demandable; but Kim Henares and Estela Sales who were then the lead high-ranked BIR officials, and Nestor Valeroso, now Deputy Commissioner, intentionally failed to either collect it or pursue tax evasion case against the company despite having knowledge or information of the company’s omissions. -o0o- I have been posting Golden Donuts, Inc. (GDI) or Dunkin’ Donuts tax issue on social media almost every day for more than two years now. And every time I post it on my google account, I always share the same with former BIR Commissioner Kim Henares thru her official email account, with the Department of Finance (reports@perangbayan.com), and BIR contact center (contact_us@cctr.bir.gov.ph). However, Henares, dubbed as “tax expert” and lead counsel for the tax evader, failed to give any satisfactory justifications or defense to clarify this. Neither her minions nor Dunkin’ Donuts company which she lawyered for, has shared any arguments or explanations to refute my postings. It is because they all know that my original tax assessment against the company amounting to PhP 1.56 Billion, which has become final, executory, and demandable, is SOLID as the ROCK OF GIBRALTAR. Here are some crucial accounts that made it solid. First – my tax assessment was based on entries reflected in DD’s duly-registered books of accounts (hardbound computer-generated). That DD’s sales as reflected in the said books was significantly higher than that reflected in its Annual Income Tax Return (AITR). Jurisprudence tells us that the books of accounts prevail over tax return when they reflect higher sales, because they are kept and prepared under control and supervision of the taxpayer; and they embody what must appear to be admission against interest. (Paper Industries Corporation of the Philippines vs. Court of Appeals, et al., 250 SCRA 434). The representations made by Dunkin’ Donuts in the said duly-registered books presented by it to the Bureau for audit and examination amounted to admission against interest which it cannot disown or change at its convenience of pleasure. Second – The PhP 1.56 Billion deficiency tax assessment attained finality, because DD’s letter of protest against the Formal Letter of Demand and Assessment Notices (FANs) was INVALID; and that DD failed to submit the required documents within the period required by law. Jurisprudence also tells us that once the deficiency tax assessment attained finality, the right of the Government to collect the deficiency tax becomes absolute, thus, it precludes the taxpayer from questioning the correctness of the assessment and from raising any justifications or defense that would pave the way for a re-investigation. And once it attained finality, it is no longer appealable; and there is now no reason why the BIR cannot continue with the collection of the said tax. Third – Dunkin’ Donuts keeps two sets of books of accounts. One is the duly-registered hardbound computer generated books of accounts which were the bases of my tax assessment, and the other is the “manually-posted original books of accounts” which DD admitted and claimed as the basis of its Trial Balance for financial statements and income tax returns purposes. On the basis of these information alone, it can readily be deduced that DD deliberately committed fraudulent acts or criminal tax violations with the end view of evading payment of correct taxes. Kim Henares and Estela Sales, in their counter-affidavits, and even the supporting affidavits of Atty. Rommel Curiba and Wilfredo Reyes, also of the Bureau of Internal Revenue, National Office, failed to give any justifications or explanations to refute all crucial issues that were clearly stated in the Formal Complaint I filed against them before the Office of the Ombudsman. It is just AMAZING that the Ombudsman dismissed the case despite failure of the respondents to give rejoinders to all vital accounts stated in my complaint. The issue is now under scrutiny of the Bureau of Internal Revenue under the current dispensation. I hope that the BIR, in line with President Rodrigo Roa Duterte’s commitment to change the Philippines into a graft-free country, will take immediate action on the matter to finally put to a halt the flagrant injustice to the Filipino people and bring to justice those revenue ANIMALS involved in conspiring with Philippine Daily Inquirer Chair Marixi Prieto firm Golden Donuts, Inc. (GDI) or “Dunkin’ Donuts” in defrauding the Government billions in collectible revenues. -o0o- Just to reiterate. I wrote in my postings Henares’s alibis in concealing the real truth about Dunkin’ Donuts tax evasion case. One is that – Henares proudly announced in public that she had DD tax case re-investigated for SEVERAL TIMES (twice) conducted by two (2) different groups of revenue officers who purportedly arrived at the same results, allegedly finding my original tax assessment against the company to be incorrect. However, in her counter-affidavit submitted to the Ombudsman, she denied that she had DD tax case re-investigated. In the same affidavit, she claimed that the case was referred to the regional office in Quezon City, then headed by Nestor Valeroso, purportedly for further determination of existence of fraud and to continue the assessment process. Her defense is weak, yet it is surprising that the Ombudsman considered it, without requiring Henares to submit DD tax case docket to determine with certainty the authenticity of the defense allegations. Henares was inconsistent as there was a re-investigation conducted which is NOT GRANTED by law on a FINAL, EXECUTORY and DEMANDABLE tax assessment. On August 11, 2016, I was at the BIR national office and got the chance to personally view and inspect documents in the possession of the BIR official who is assigned to evaluate the case. The result of the unwarranted “first re-investigation” ordered by Henares showed that – of the PhP 1.564 Billion final, executory and demandable tax assessment against DD (or GDI), only more than PhP 4 Million was receipted for the Government’s coffer. This shows an uncollected balance of more than PhP 1.560 Billion. I also noticed that all BIR forms 0500 series attached to the REPORT OF RE-INVESTIGATION were not signed by the Chief Assessment Division and Regional Director of the Bureau’s regional office in Quezon City. It follows that these two high-ranked officials in the Bureau’s regional office, did not concur with the re-investigation, and therefore, the tax case is still open. It also appears that the tax case docket is no longer complete. What does this mean? Another thing is that, I have not seen any other re-investigation report except the one earlier discussed. It may be noted that Henares proudly announced publicly that she had DD tax case re-investigated for SEVERAL TIMES (twice) which she claimed that said re-investigations arrived at the same results, purportedly finding my original tax assessment to be incorrect. On September 22, 2016, I went to the BIR National Office and chanced to talk with Atty. GRACE CRUZ who was assigned to conduct the “second re-investigation”. She admitted that the DD tax case was referred to her but she did not conduct a re-investigation because she knew that my original tax assessment already attained finality. – This confirms my firm stance that DD’s P1.56-B tax deficit has become FINAL, EXECUTORY and DEMANDABLE. So, how can Henares claim that the two different groups of revenue officers who supposedly conducted the re-investigations came up with the same results that my original tax assessment showed inaccuracies? It is now very clear that Kim Henares, Estela Sales, and Nestor Valeroso, SWINDLED the Filipino people BILLIONS in collectible revenues. More particulars may be viewed at www.othelloedalanon.blogspot.com Othello Dalanon #Commissioner #DeputyCommissioner #EstelaSales #NestorValeroso #IsabelPaulino #OliviaAmanse #GregorioTumanguil #StanleyOng #DunkinDonuts #PDI #Inquirer #Duterte #Malacañang #Palace #GoldenDonuts #DunkinBrands #Cheat #TaxEvader #animals #KimHenares #MarixiPrieto

Thello Dalanon Dear President Duterte, Good day Sir! Ex-BIR Commissioner Kim Henares deliberately betrayed the Filipino people. She intentionally did not collect the P1.56-B tax deficit of Philippine Daily Inquirer chair Marixi Rufino-Prieto firm “Dunkin’ Don Read more ... uts” or pursue tax evasion case against the company despite clear existence of actual fraud. Thank you Mr. President, I am Sincerely yours, Othello E. Dalanon ***** ***** ***** OVERVIEW OF “DUNKIN’ DONUTS” TAX CASE I am a former revenue officer of the BIR. In 2008, I was tasked to conduct an investigation of the 2007 financial records of GOLDEN DONUTS, INC. (GDI), the Philippines’s exclusive franchise holder of the American food brand “Dunkin’ Donuts”, for internal revenue tax purposes where I discovered and appropriately documented several irregularities that culminated in the P1.56 billion deficiency tax assessment against the company. I personally reported GDI’s omissions to former BIR Commissioner Kim Henares and recommended to her the criminal prosecution of the company for tax evasion under the much-vaunted Run After Tax Evaders (RATE) program of the Bureau; but she intentionally failed to either pursue tax evasion case against the company or enforce collection of the aforesaid deficiency tax because GDI’s secretary – Ms. Marixi Rufino-Prieto who also happens to be the Philippine Daily Inquirer’s chairperson – is former President BS Aquino’s friend. Initially, she had the case evaluated by the RATE team under Deputy Commissioner Estela V. Sales to determine existence of fraud which resulted in the affirmative as relayed to me by a BIR official who requested anonymity. My informant said that the RATE team was then already preparing the memorandum to recommend the criminal prosecution of GDI for tax evasion but discontinued upon instruction from a high-ranking official of the BIR whose name my informant did not disclose. I then conferred with Deputy Commissioner Estela Sales about the status of the case but she told me – “assessment na lang daw kasi kaibigan ni PNoy ang taxpayer at nakakadirekta ito kay comm” (referring to CIR Henares). So, the case was referred to Assistant Commissioner, now Deputy Commissioner Nestor S. Valeroso who was then the Regional Director of BIR Regional Office in Quezon City. I was also informed by my former group supervisor Mr. Gregorio S. Tumanguil that Ms. Prieto met with Mr. Valeroso and informed the latter the she (Ms. Prieto) had already talked to CIR Henares about the tax assessment against GDI and expressed that they cannot afford to lose their franchise with Dunkin’ Donuts of America. Both Henares and Valeroso, who are supposed to execute tax laws fairly and reasonably to protect the interest of the Filipino people, deliberately failed to enforce collection of the afore-said tax deficiency, at least without fraud charges, giving undue advantage to the taxpayer and undue injury to the Philippine Government. On June 24, 2013, I resigned from the service as a result of my dissatisfaction and disenchantment with Henares over her selective and insincere anti-tax evasion drive that spared the said company for political patronage. On March 17, 2014, after several reminders sent to her and in order to protect the interest of the Filipino people to whom the P1.56-B tax deficit of GDI already legally belong, I filed administrative and criminal charges against Henares and Deputy Commissioner Estela Sales before the Office of the Ombudsman; but it dismissed the case without conducting a thorough investigation and without requiring respondents Henares and Sales to submit GDI’s tax case docket and copy of its actual “protest” which are necessary in the investigation. The Ombudsman, in its dismissal resolution, did not discuss the merits of the case and did not state the facts and law upon which the conclusion given were drawn. I feel in my layman’s understanding that the Ombudsman gravely erred in dismissing the case; thus, on December 4, 2015, within the period to file an appeal, I filed a Petition for Review before the Court of Appeals which also dismissed the case for lack of jurisdiction and affirmed the Ombudsman’s resolution. I express my firm stance that both the Ombudsman and CA have gravely erred in dismissing the case without fairly considering the primary and serious issues raised in my complaint. Thus, on July 22, 2016, I filed a Petition for Certiorari before the SUPREME COURT. The chronology of events affecting my case against Henares and Sales: March 17, 2014 I filed criminal and administrative charges against Henares and Sales before the Ombudsman for Grave Misconduct, Gross Neglect of Duty, and for violation of Sec. 3(e), (f) of R.A. 3019, and Sec. 269(e), (h) of the NIRC. August 24, 2015 I received the Ombudsman resolution dated March 24, 2015 dismissing the criminal and administrative charges against the respondents. September 1, 2015 I filed a Motion for Reconsideration which the Ombudsman denied in an order dated September 10, 2015 which I received on November 19, 2015. December 4, 2015 I filed a Petition for Review before the Court of Appeals to seek the reversal of the Ombudsman’s decision dismissing the case against the respondents. December 18, 2015 The Court of Appeals issued a Resolution dismissing the petition. January 4, 2016 I filed a Motion for Reconsideration. May 27, 2016 I received CA’s resolution dated May 17, 2016 denying my Motion for Reconsideration. July 22, 2016 Within the 60-day granted by law, I filed a Petition for Certiorari before the SUPREME COURT. The P1.56-B deficiency tax assessment against GDI that remained undisturbed after review and evaluation conducted by the Assessment Division of the Bureau’s Regional Office in Quezon City, and already covered by FANs, were my very findings. Such findings were the product of days and nights of toil and hard work for almost two (2) years, not to mention the pressures that I had to endure from the outside and even from some of my superiors in the Bureau. And for doing an out-of-the-box job, I was threatened with disciplinary action by my superiors; and for reporting irregularities, I was threatened with criminal action by no less than former BIR Commissioner Henares herself who was supposed to uphold an examiner’s tax assessment. MAY GOD HELP ME? Othello Dalanon www.othelloedalanon.blogspot.com

Thello Dalanon ATTY. KIM HENARES’s IGNORANCE OF THE LAW AND INEXCUSABLE MISTAKE AS THEN PHILIPPINES INTERNAL REVENUE COMMISSIONER. 1. Kim Henares, on February 28, 2014, told GMA-7 in a telecast interview that my tax assessment against “Dunkin’ Donuts” show Read more ... ed inaccuracies. However, Henares and BIR Deputy Commissioner Estela Sales, in their counter-affidavits, and even the supporting affidavits of Atty. Rommel Curiba and Mr. Wilfredo Reyes, both of the BIR national office, did not give any justifications or explanations to dispute all the glaring and crucial issues included in my audit findings that were clearly stated in the Formal Complaint I filed against them before the Office of the Ombudsman. Despite respondents Henares’s and Sales’s failure to refute, the Ombudsman dismissed the case without conducting a thorough investigation and without requiring the respondents to submit “Dunkin’ Donuts” tax case docket and copy of its actual “protest” which are very essential in the investigation. The Ombudsman, in its dismissal resolution, did not discuss the merits of the case and did not state the facts and law upon which the conclusion given were drawn. AMAZING!!! 2. Henares’s ignorance of the law and inexcusable mistake as then internal revenue commissioner. I expressed my firm stance that the P1.56-B tax assessment against “Dunkin’ Donuts” attained finality based on the following grounds: a. DD failed to file a VALID protest; and b. DD failed to submit the required documents within the period required by law. Henares, in her counter-affidavit, states: “Mr. Dalanon, as then Revenue Officer, has no authority – and could not arrogate upon himself – to decide and declare that a certain assessment is already final, executory, and demandable. THIS IS A FUNCTION VESTED BY LAW UPON THE COMMISSIONER OF INTERNAL REVENUE OR HER DULY AUTHORIZED REPRESENTATIVES.” Henares’s statement does not find basis in law. Her claim is erroneous, because it is the law that determines finality of an assessment as clearly provided under Revenue Regulations No. 12-99 in relation to Section 228 of the 1997 National Internal Revenue Code, as amended. The Ombudsman dismissed the case without studying tax assessment rules. WONDERFUL!!! 3. Henares, in her counter-affidavit, denied knowledge of “Dunkin’ Donuts” irregularities; but admitted that she received my audit report on September 3, 2010. --- Therefore, she knew about it. I personally reported to her “Dunkin’ Donuts” omissions and recommended to her the criminal prosecution of the company for tax evasion under the much-vaunted Run After Tax Evaders (RATE) program of the Bureau. Atty. Jethro M. Sabariaga, who was then her Chief of Staff, knew very well that I personally talked to Henares about the case. In fact, Atty. Sabariaga first read my audit report before it was handed over to Henares. “Othello, di ka ba natatakot sa ginagawa mo? – That’s Atty. Sabariaga asking. To which I replied – trabaho lang ho sir. So if Henares didn’t know about “Dunkin’ Donuts” case as she claimed, what did Atty. Sabariaga report to her? -- Was it about the filmed story of “ASIONG SALONGA”? It was Henares who introduced me to Deputy Commissioner Estela Sales to whom she referred the case for evaluation by the RATE team to determine existence of fraud – “ganito ang gusto kong mga kaso” – Estela Sales even exclaimed! The evaluation conducted by the RATE team to determine existence of fraud resulted in the AFFIRMATIVE as relayed to me by a BIR official who requested anonymity. The informant further told me that the RATE team was then already preparing the memorandum to recommend the criminal prosecution of the doughnut company for tax evasion, but discontinued upon instruction by a high-ranking official of the Bureau whose name the informant did not disclose. There are documents to prove that Henares was properly apprised of the “Dunkin’ Donuts” tax case. These were attached to my Formal Complaint against Henares and Estela Sales filed before the Ombudsman. As I said, the Ombudsman dismissed the case. SURPRISING!!! 4. Henares, in her counter-affidavit, denied that she ordered “two re-investigations”. However, on February 28, 2014, in a telecast interview by GMA-7, she admitted that she had the doughnut company’s tax case re-investigated for several times (twice). “pinaimbestiga natin ng ilan beses, at yong mga imbestigasyon na yon, lumalabas na hindi naman tama ang assessment ni Mr. Othello [Dalanon]” – Henares said. This is what happened to the “two reinvestigations”. The “first re-investigation”, which is no longer warranted because my tax assessment which remained undisturbed after review and evaluation by high-ranking officers in the district and regional levels of the Bureau and already covered by Final Assessment Notices (FANs), all bearing Demand No. 41-B072-07 and all dated October 29, 2010, attained finality, was assigned to Revenue Officer STANLEY ONG under Group Supervisor GREGORIO TUMANGUIL. Mr. Stanley Ong was the same revenue officer who conducted the review of “Dunkin’ Donuts” tax case and recommended for the issuance of the statutory notices of assessment (PAN and FANs) when he was yet with the Assessment Division of the Regional Office in Quezon City. I am not a lawyer though I believe that Revenue Officer Ong who conducted the “first re-investigation” could no longer disturb my tax assessment by himself for reasons of principle of estoppel. The equitable principle of estoppel forbids the revenue officer who conducted the “first re-investigation” from taking inconsistent position against his concurrence to my original audit findings that culminated in the deficiency tax assessment amounting to PhP 1.56-B which is already FINAL, EXECUTORY, and DEMANDABLE but which was re-investigated by no other than him. The result of the “first re-investigation” conducted by Revenue Officers Ong and Tumanguil, who were then assigned at RDO No. 41, Mandaluyong City, was a HOCUS-POCUS. The “second re-investigation”, which is also no longer necessary because my tax assessment attained finality, was referred to ATTY. GRACE CRUZ of the National Investigation Division, BIR National Office in Diliman, Quezon City. I strongly admire Atty. Cruz of her investigative expertise in administrative cases. Lest I be misconstrued. I am not saying that Atty. Cruz is short of proficiency in tax accounting and tax auditing. NO RESULT OF REINVESTIGATION WAS SUBMITTED BY ATTY. CRUZ. So, how can former BIR Chief Henares claim that her groups of revenue officers who conducted the two (2) separate re-investigations came up with the same findings that my tax assessment against the doughnut company was incorrect? --- AMAZING!!! 5. Henares’s another “PALUSOT” in not filing fraud case vs. “Dunkin’ Donuts”. Henares and her minions claimed that the compact disc (CD), which I presented to the RATE team, was allegedly not compliant with the requirements prescribed under Revenue Memorandum Order (RMO) No. 29-2002. The RATE coordinator, members, and Mr. Wilfredo Reyes, the pioneer CATTs user, failed to consider and evaluate the documents attached to the docket of “Dunkin’ Donuts” case and the findings for deficiency tax assessment which were based on entries per duly-registered books of accounts (hardbound computer-generated), as I have appropriately validated; and other independent relevant documents, such as but not limited to: Franchise Agreement, Technical Service Agreement, and other BIR returns filed by the doughnut company, such as: VAT returns and Final Withholding Tax Remittance Returns. The CD, which was neither mentioned nor objected to by “Dunkin’ Donuts” in its INVALID protest, is used by Henares and her minions as scapegoat in not filing tax evasion case against the company by claiming that said CD is not compliant with the requirements prescribed under RMO No. 29-2002 - that it should be properly labeled with the name of the taxpayer, taxable year and serial no. and volume no. and signed by the taxpayer and RDO. I pointed out that “Dunkin’ Donuts” adopts a “computer-assisted accounting system” wherein it is still required to register a “hardbound computer-generated books of accounts” which were the bases of my audit findings. Thus, the CD, which they used as scapegoat in not filing fraud case against “Dunkin’ Donuts”, need not be strictly compliant with the requirements provided under the aforesaid RMO in regards to the markings to be inscribed thereon. RMO No. 29-2002 clearly provides that in case the taxpayer has no capability to submit in CD-ROM form, procedures under the MANUAL SYSTEM shall prevail. In other words, if the taxpayer adopts a computer system of accounting but has no capability to integrate the different components of accounting system (i.e., books of accounts and other related accounting records) in a CD-ROM form, it shall still be required to register a “hardbound computer-generated books of accounts”, as in the case of “Dunkin’ Donuts”. I suggested to the RATE team that they may recommend for the issuance of a Subpoena Duces Tecum (SDT) to compel the doughnut company produce its duly-registered hardbound computer-generated books of accounts, but the suggestion was just ignored. What is crystal clear is that, Henares deliberately deceived the FILIPINO people by making excuses to conceal the REAL TRUTH about this bigtime tax evasion case. Again, as I said, the Ombudsman dismissed the case…without scrutinizing tax laws, rules and regulations. –- IT’S MORE FUN IN THE PHILIPPINES!!! www.othelloedalanon.blogspot.com Othello Dalanon

Thello Dalanon BIR KIM HENARES AT ANG KANYANG MGA ALIPORES…HANDANG MANG-UNGGOY!!! The formal complaint I filed with the Office of the Ombudsman vs Kim Henares and Estela Sales in connection with the P1.56-B tax case involving Golden Donuts, Inc. (GDI) includes, Read more ... among other issues, the following: 1. That GDI’s duly-registered books of accounts reflected a Net Income of P135.2-M while the tax return reflected a Net Loss of P44.9-M. 2. That GDI’s duly-registered books of accounts reflected higher sales than that reflected on the tax return. Sales per duly-registered books was P1.928-B while per tax return was P1.031-B. A huge discrepancy (under-declaration) amounting to P897-M. The SUPREME COURT ruled in the case of Paper Industries Corporation of the Philippines versus Court of Appeals, et al., 250 SCRA 434 that “where the books of accounts reflected a Sales or Receipts higher than that reflected in the return, the books of accounts should prevail. This is so, because the books of accounts are kept by the taxpayer and are prepared under its control and supervision; and they reflected what may be deemed to be admission against interest.” 3. Other independent relevant documents further revealed that GDI’s sales topped P2.366-B but the amount recorded in the duly-registered books was P1.928-B. A huge discrepancy amounting to P438-M. Henares and Sales, in their counter-affidavits, and even the supporting affidavits of Atty. Romel Curiba, RATE Team Leader, and Mr. Wilfredo Reyes, the pioneer BIR CAATTs user, did not state any justifications or explanations to refute the above-enumerated issues. The Ombudsman dismissed the case without investigating these issues scrupulously, and without discussing the same in the dismissal resolution despite glaring discrepancies. The Ombudsman also did not secure GDI tax case docket from the BIR which is very crucial in the investigation. No hearing was conducted. Goodbye P1.56-B “Dunkin’ Donuts” tax…naging TAE na!!! www.othelloedalanon.blogspot.com Othello E Dalanon

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