Marcoses’ Estate Tax Case Can No Longer Be Reopened – Former BIR Chief

As the decision of the Supreme Court (SC) has become final and executory, the multibillion-peso estate tax case against the Marcos family could no longer be reopened, a tax expert said on Wednesday, Sept. 14.

In an interview with “The Big Story” on One News, former Bureau of Internal Revenue (BIR) commissioner Kim Henares said it is erroneous for President Marcos to say that members of his family were not given the opportunity to question their estate tax case.

“I just want to correct the statement,” Henares said. “[T]hey (Marcoses) were the one[s] who appealed the case (before) the Court of Appeals and [raised it] to the Supreme Court,” Henares emphasized.

During an interview aired over ALLTV on Tuesday, Sept. 13, Marcos said he wants their estate tax case to be reopened, saying their side was not heard when the matter was being litigated in the courts as they were in exile in the United States.

“So when it was the time for us to answer, we had no chance to answer because we’re nakakulong (confined) and (in the) Air Force base in Hawaii,” he said. “Now we are all here, open the case and let us argue it.”

Read more: Marcos Wants Estate Tax Final Settlement

Marcos and his family fled to Hawaii in 1986 after the bloodless EDSA people power revolution which toppled the President’s namesake and father, the late dictator Ferdinand Marcos Sr.

The Chief Executive said if the case is reopened, the Marcos family will ask for detailed accounting of their alleged ill-gotten or unassessed properties for a true valuation of what they owe the government, if there is any.

In 1997, the SC ordered the Marcos heirs to pay P23 billion in estate tax. The order became final and executory on March 9, 1999.

The Marcos estate tax assessment of P23 billion in 1991 has ballooned to an estimated P203 billion due to penalties and surcharges.

File tax evasion case

According to the former tax agency official, the only other recourse is for the BIR to file a tax evasion case against the Marcoses.

“Actually, my suggestion is that if President Marcos is saying that they want to look at the inventory… I'm just saying that legally, there's only one way for which you can open the case again, which is you file a tax evasion case,” she said.

Once the tax evasion case is filed, Henares noted that this will be the chance for the Marcoses to question the inventory of their assets.

But as it is now, the former BIR chief pointed out that “there's no way” to open the case again.

She said the decision of the SC could not be reversed and that the lawyer of the Marcos family “made a mistake” by saying that the levy imposed on Marcoses’ assets was a violation of the due process.

She also noted that the BIR cannot reach the assets of the Marcoses abroad without the help of other countries as “we don't have that jurisdiction” and the agency can only levy on things in the Philippines.

“There is a convention that we had proposed that we adopt, which is the Mutual Assistance Convention, which has been with the Senate since 2015, but it has not been adopted yet,” Henares said.

“If we had adopted that, then we could have gone abroad and asked the various governments to help us levy on assets that are abroad,” she added.

The Marcos family estate tax case was among the top issues raised against the Chief Executive during the presidential campaign. 

Earlier, retired SC senior associate justice Antonio Carpio had insisted that the 1997 ruling of the high court on the Marcos estate tax case is “final and executory.”

In an interview in June, BIR Commissioner Lilia Guillermo said the agency would comply with the court’s decision on the estate tax issue of the Marcos family and will stick to the agency’s mandate to collect.

Fact-checked

Rappler and Philstar.com also fact-checked the claims that the President made on Sept. 13.

According to Rappler’s article dated Sept. 16, the Marcoses were already back in the Philippines when estate tax case was filed, contrary to what the Chief Executive said.

The Marcos family returned to the Philippines in 1991.

The 1994 Court of Appeals (CA) ruling on the case showed Marcos Jr. was already congressman of the second District of Ilocos Norte when the BIR sent copies of the deficiency tax assessments to him. The CA decision was affirmed by the SC in 1997.

Marcos Jr. was a petitioner in a CA case.

The decision said “the deficiency tax assessments were not protested administratively, by (former first lady) Mrs. (Imelda) Marcos and the other heirs of the late president, within 30 days from service of said assessments.”

The CA decision cited a total of 30 notices of levy issued by the BIR. These were the following:

• Twenty-two notices of levy on real property against certain parcels of land owned by the Marcoses were issued on Feb. 22, 1993.
• Four notices of levy on real property were issued for the purpose of satisfying the deficiency income taxes on May 20, 1993.
• Four notices of levy on real property were again issued on May 26, 1993.

The court decision said: “We cannot, therefore, countenance petitioner’s insistence that he was denied due process.”

Carpio said in a Philippine Daily Inquirer column published on Sept. 30, 2021, that “the BIR made sure that proper notices were given to Imelda Marcos” but “the Marcos heirs simply ignored all the notices sent by the BIR.”

“However, when the BIR served notices to the Marcos heirs that real properties in the name of Ferdinand Marcos would be auctioned off to pay the estate tax, (Ferdinand) Bongbong Marcos (Jr.) filed a petition with the Court of Appeals questioning the validity of the estate tax assessment on the flimsy ground that the BIR had no jurisdiction over the assets of the deceased Marcos because the assets were in the custody of the probate court.”

“The Court of Appeals dismissed Bongbong Marcos’s petition on the ground that the estate tax assessment had already become ‘final and unappealable,’” Carpio said.

Philstar.com, in its article dated Sept. 14, also cited the SC ruling that stated that notices of warrants of distraint and levy of sale were furnished to Marcos’ office when he was already a congressman in the Philippines in 1993.

The Presidential Commission on Good Government said that a Special Audit Tax Team from the BIR determined the following tax liabilities owed by the Marcos family in 1991:

• deficiency estate tax assessment against the estate of Marcos Sr. in the amount of P23,293,607,638
• deficiency income tax assessments against Imelda and Marcos Sr. in the aggregate amount of P184,159,289.70 for the years 1985 to 1986
• deficiency income tax assessment against Marcos Jr. [for the years] 1982 to 1985 in the aggregate amount of P20,410

Marcos filed a petition against this before the CA, which dismissed the petition on June 5, 1999 on the ground that the estate tax assessment of BIR — amounting to P23,293,607,638 — had already become final and unappealable as Carpio pointed out.

"As early as 1993, BIR already executed its final assessment when it levied and sold 11 real properties in Tacloban City, and, as early as 1997, the judgment on the tax case had become final and executory," the PCGG said then.

Through five administrations, the Marcos family has not paid estate tax despite the 1997 SC ruling.

Marcos’ interview with showbiz personality Toni Gonzaga was aired on government channels. A transcript of the interview is available on the official website of the Office of the Press Secretary.