FILING A TAX-EVASION COMPLAINT AGAINST YOUR EMPLOYER IN THE PHILIPPINES A comprehensive legal guide for employees, whistle-blowers, and counsel
1. Why employees sometimes have to act
Most tax-evasion cases in the Philippines begin with an internal audit of the Bureau of Internal Revenue (BIR). But the BIR’s Enforcement Service also relies heavily on “walk-in” or e-mailed complaints—often from rank-and-file workers—when employers:
- Fail to withhold compensation tax from salaries, or withhold a lesser amount;
- Withhold but do not remit the taxes to the BIR;
- Refuse to issue the annual Certificate of Compensation Payment/Tax Withheld (BIR Form 2316);
- Use false or multiple TINs, split payrolls, or misclassify employees as “consultants”; or
- Create ghost employees to claim fictitious deductions.
Because the tax on wages is a “withholding tax,” the legal burden is squarely on the employer (Tax Code § 24, 79 & 81). Employees face no deficiency assessment if the employer defaulted—yet they are indispensable witnesses to prove intent to evade.
2. Legal framework and sources of liability
| Statute / Rule | Key provisions relevant to employers | Typical penalties |
|---|---|---|
| National Internal Revenue Code (NIRC), as amended | § 255 (Failure to file return/pay/remit), § 256 (Willful tax evasion), § 267 (Use of false receipts), § 282 (Informer’s reward) | Fine ₱5 000 – ₱20 000 and/or imprisonment 6 months – 10 years; plus surcharge, interest, and compromise penalties |
| TRAIN Law (RA 10963) | Raised tax-evasion thresholds; adjusted incremental penalty rates; limited informer’s reward to specific instances; introduced payroll withholding statements in electronic form | Same criminal ranges; electronic evidence explicitly admissible |
| Revised Penal Code | Art. 172 (Falsification of documents), Art. 315 (Estafa) if taxes are deducted from wages but pocketed | Reclusion temporal to prision correccional, fines, restitution |
| DOLE Labor Code | Art. 116 (Wage withholding); Art. 118 (Retaliation) | Criminal prosecution by DOLE; separate from BIR case |
Note. Revenue Regulations and Revenue Memorandum Orders (RR 4-2016, RR 11-2018, RMO 27-2020, etc.) detail documentary requirements and electronic filing protocols.
3. Where—and how—to file the complaint
| Option | Where to lodge | Typical scenario | Advantages / cautions |
|---|---|---|---|
| A. BIR National Office, Enforcement & Advocacy Service (EAS) | Send notarized written complaint (or e-mail pdf) to taxevaders@bir.gov.ph or personally file with the EAS counter in Diliman, QC | Large nationwide employer; complex tax fraud; high revenue impact | Direct pipeline to the R.A.T.S. (Run After Tax Scams) Program; may qualify for up to 10 % informer’s reward (subject to ₱1 M cap and TRAIN restrictions) |
| B. Revenue District Office (RDO) where employer is registered | Submit letter-complaint with attachments to the RDO’s Investigation Division | SME or local company operating only in one region | Faster fact-finding; RDO can immediately issue Subpoena Duces Tecum |
| C. Department of Justice (DOJ) – Task Force on Anti-Tax Evasion | File sworn complaint-affidavit directly under NIRC § 256 | Employer is a public official or enjoys local influence | DOJ may docket as “Tax Case No.__”; BIR representatives join as nominal complainants |
| D. Office of the Ombudsman | If employer is a government agency or GOCC | Non-remittance of withholding taxes on government salary | Ombudsman prosecutes before the Sandiganbayan |
Minimum contents of the sworn complaint
- Identities (full corporate name, address, TIN, RDO).
- Nature of violation (failing to withhold, non-remittance, falsified 2316, etc.).
- Taxable period covered (e.g., CY 2022–2024).
- Evidence list (payslips, payroll register, bank transfer logs, e-mails, co-worker statements).
- Complainant’s undertaking to appear and testify.
- Certification of non-forum shopping (for Ombudsman/DOJ routes).
All pages must be initialed and the affidavit notarized. Attach digital copies on a USB drive if filing electronically.
4. Gathering evidence — what actually convinces the BIR
| Evidence type | What it shows | How to secure it |
|---|---|---|
| Payslips / e-payslips | Gross pay vs. tax deducted | Print originals; download from HR portal |
| BIR Form 2316 (or its absence) | Proof of actual remittance (validated by BIR stamp or eATS acknowledgment) | Employer must furnish on/before Jan 31 each year; ask HR in writing |
| Alpha List of Employees (BIR Form 1604-C) | Whether your name and correct taxable income were reported | Request copy from BIR RDO under Sec. 270 (b) with your TIN and ID |
| Bank statements of payroll account | Whether tax portion was ever credited to BIR | Employees seldom have direct access; subpoena later |
| Internal e-mails / memos | Intentional scheme (e.g., “let’s delay remittance”) | Save original .msg format metadata |
Tip. Even if you never received a 2316, you can ask the BIR for a Taxpayer Ledger Inquiry on your TIN; zero entries for withholding usually corroborate the offense.
5. Procedure once filed
- Pre-evaluation (15 days). Investigators check completeness; may call you to clarify.
- Letter of Authority (LOA) issuance. Begins formal audit period; LOA served on employer.
- Revenue officers’ Findings Report. Recommended civil liabilities (deficiency tax, surcharge, interest, compromise).
- Review by Legal Service. Determines prima facie willful intent.
- Approval of the Commissioner. If criminal, BIR Commissioner signs a complaint-affidavit.
- Filing with DOJ / CTA (within prescriptive period). For fraud, BIR has 10 years from discovery to assess (NIRC § 222); criminal action prescribes in 5 years from commission (NIRC § 281).
- DOJ preliminary investigation. Subpoena employer; receive counter-affidavit; resolve probable cause.
- Information filed in RTC / CTA Division. Tax cases > ₱1 M now fall under CTA Division per RA 11213 (TARP).
- Trial & judgment. Conviction rate of tax-evasion cases hovers below 30 %, chiefly for want of witnesses—hence the employee’s testimony is pivotal.
6. Penalties and personal exposure of corporate officers
| Violation | Fine | Imprisonment | Ancillary |
|---|---|---|---|
| Failure to remit withheld tax (NIRC § 255) | ₱10 000 – ₱20 000 | 1 – 10 yrs | Closure of business, disqualification from public bidding |
| Willful attempt to evade (NIRC § 256) | Fine = deficiency tax × 100 % + ₱500 000 – ₱10 M | 2 – 6 yrs (if tax ≤ ₱10 M) / 6 – 10 yrs (if > ₱10 M) | Public naming under BIR website; RDO padlocking |
| Falsification of 2316 (RPC Art. 172) | Up to ₱5 000 | 2 – 6 yrs, plus accessory penalties | |
| Retaliation against whistle-blower (Labor Code Art. 118) | ₱1 000 – ₱10 000 | 3 months – 3 yrs | Reinstatement / full backwages |
Corporate directors, treasurers, and managing officers are solidarily liable (NIRC § 253). Limited liability does not shield them from criminal prosecution.
7. Whistle-blower protections and informer’s reward
Confidentiality. BIR Revenue Regulations 30-2002 & 7-2016 prohibit disclosure of informant identities except on court order.
Labor non-retaliation. DOLE can order immediate reinstatement with backwages under Art. 118, and employers who dismiss informants may be subpoenaed for illegal dismissal proceedings.
Informer’s reward (NIRC § 282). Up to 10 % of the recovered tax or ₱1 million, whichever is lower, if information:
- Results in assessment + collection of revenues;
- Involves a case not already under audit when tipped; and
- Does not come from current BIR personnel.
TRAIN Law narrowed the scope—reward no longer applies to simple deficiency assessments where evidentiary records are purchased from suppliers.
8. Practical checklist for the employee-complainant
| Before filing | During investigation | After filing |
|---|---|---|
| ☑ Collect six months of payslips and e-mails | ☑ Respond promptly to BIR phone calls | ☑ Keep copy of docket number (e.g., RATS Case No. 2025-03) |
| ☑ Secure notarization of affidavit | ☑ Attend clarificatory conference if invited | ☑ Monitor case status via BIR hotline 155-128 |
| ☑ Scan all documents to PDF | ☑ Do not discuss publicly to avoid sub judice issues | ☑ If sued for retaliation, inform BIR Legal so they can assist |
9. Frequently asked questions
| Question | Short answer |
|---|---|
| Can I file anonymously? | BIR accepts anonymous tips, but a formal criminal case needs a sworn witness. Without one, the case may be downgraded to civil deficiency only. |
| Will I owe back taxes if my employer never remitted? | No. NIRC makes withholding agents (employers), not employees, liable. You may still need to file an annual ITR if your 2316 is absent. |
| What if the unpaid tax is under ₱50 000? | The BIR may compromise rather than prosecute; but willful intent (e.g., falsified forms) can still justify criminal action regardless of amount. |
| Is prescription tolled by my complaint? | Yes. Filing a sworn complaint interrupts the running of the 5-year criminal prescriptive period (NIRC § 281 [b]). |
| Does the BIR coordinate with DOLE? | Yes. Joint DOF-DOLE Circular 1-2021 mandates parallel labor inspection when payroll tax issues are found. |
10. Sample template: Sworn Complaint-Affidavit
(condensed for brevity—expand details when drafting)
REPUBLIC OF THE PHILIPPINES BUREAU OF INTERNAL REVENUE National Office – Enforcement & Advocacy Service
x x
AFFIDAVIT-COMPLAINT
I, Juan Dela Cruz, Filipino, of legal age, and a resident of … state address and TIN, after having been duly sworn, depose and state:
- That I was employed as a Sales Associate by XYZ Retail Inc. (TIN ___, RDO 45) from 1 January 2023 to present, receiving a monthly salary of ₱25 000.
- That XYZ deducted “Withholding Tax” of ₱1 500 monthly from my salary but failed to remit the same to the BIR, as evidenced by: a. My payslips for Jan–Dec 2024 (Annex “A”); b. BIR Certification dated 15 Feb 2025 indicating no withholding entries under my TIN (Annex “B”); c. HR e-mail dated 10 Mar 2025 admitting delay in remittance (Annex “C”).
- That XYZ’s officers willfully violated §§ 255 and 256 of the NIRC.
- I am executing this Complaint for the filing of criminal charges and assessment of deficiency taxes, and to claim benefits under the Informer’s Reward Program.
IN WITNESS WHEREOF, …
11. Key take-aways
- Document first, complain later. Solid contemporaneous records make or break tax-evasion prosecutions.
- Choose the correct venue. For purely private employers, start with the RDO or BIR National Office; for government employers, the Ombudsman route may be mandatory.
- Time-bar awareness. While fraud extends BIR’s assessment window to 10 years, criminal action still prescribes in 5 years—so act early.
- Expect parallel labor and criminal cases. Tax non-remittance often correlates with SSS, PhilHealth, and Pag-IBIG delinquency; use multi-agency pressure.
- Whistle-blower rights exist—but are only real if asserted. Invoke Labor Code Art. 118 and insist on anonymity provisions under BIR regulations.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Statutes and regulations are continually amended; consult a Philippine tax lawyer or certified public accountant for specific situations.