Taxation, 2011 Bar — Question 74

MULTIPLE CHOICE

In "Operation Kandado," the BIR temporarily closed business establishments, including New Dynasty Corporation that failed to comply with VAT regulations. New Dynasty contends that it should not be temporarily closed since it has a valid and existing VAT registration, it faithfully issued VAT receipts, and filed the proper VAT returns. The contention may be rejected if the BIR investigation reveals that (A) the taxpayer has not been regularly filing its income tax returns for the past 4 years. (B) the taxpayer deliberately filed a false and fraudulent return with deliberate intention to evade taxes. (C) the taxpayer used falsified documents to support its application for refund of taxes. (D) there was an understatement of taxable sales or receipts by 30% or more for the taxable quarter.

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