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Willful blindness doctrine

Willful blindness doctrine by: Maridelle M. Ramos

MERE RELIANCE on another person in preparing, filing and paying income taxes is not a justification for failure to file the right information on income taxes.

In People v. Gloria Kintanar (CTA EB Crim. No. 006, Dec. 3, 2010), Ms. Kintanar was charged with failure to make or file her income tax returns (ITR), violating Section 255 of the 1997 National Internal Revenue Code (NIRC), as amended. She claimed that she did not actively participate in the filing of her joint ITR with her husband since she entrusted such duty to the latter who, in turn, hired an accountant to perform their tax responsibilities. She testified that she did not know how much her tax obligation was; nor did she bother to inquire or determine the facts surrounding the filing of her ITRs. Despite several notices and subpoena received by the accused, only an unsupported protest letter made by her husband was filed with the Bureau of Internal Revenue (BIR). The Court of Tax Appeals (CTA) En Banc found her neglect or omission tantamount to “deliberate ignorance” or “conscious avoidance”. As an experienced businesswoman, her reliance on her husband to file the required ITR without ensuring its full compliance showed clear indication of deliberate lack of concern on her part to perform her tax obligations. This ruling was sustained by the Supreme Court (SC) in 2012.

Based on the foregoing, the willful blindness doctrine was applied by the CTA, as sustained by SC on cases where there is a natural presumption that the taxpayer knows his/her tax obligations under the law considering the factual circumstances of the case, such as being a businesswoman or official of a company. This case set a precedent that mere reliance on a representative or agent (i.e., accountant or husband) is not a valid ground to justify any noncompliance in tax obligations. The taxpayer must inquire, check and validate whether or not his/her representative or agent has complied with the taxpayer’s tax responsibilities.

However, in the recent case of People v. Judy Ann Santos (CTA Crim. Case no. 012, Jan. 16, 2013), the CTA Division seemed to have a change of heart and acquitted Ms. Santos despite having almost the same circumstances as that of the case of Ms. Kintanar. In this case, Ms. Santos was accused of failure to supply correct and accurate information in her ITR. She claimed that by virtue of trust, respect and confidence, she has entrusted her professional, financial and tax responsibilities to her manager since she was 12 years old. She participated and maintained her intention to settle the case, and thus provided all the documents needed as well as payment of her taxes. The element of willfulness was not established and the CTA found her to be merely negligent. The CTA also noted the intention of Ms. Santos to settle the case, which negates any motive to commit fraud. This was affirmed by the SC in its resolution issued April 2013.


“Willful blindness” is defined in Black’s Law Dictionary as “deliberate avoidance of knowledge of a crime, especially by failing to make a reasonable inquiry about suspected wrongdoing, despite being aware that it is highly probable.” A “willful act” is described as one done intentionally, knowingly and purposely, without justifiable excuse.

“Willful” in tax crimes means voluntary, intentional violation of a known legal duty, and bad faith or bad purpose need not be shown. It is a state of mind that may be inferred from the circumstances of the case; thus, proof of willfulness may be, and usually is, shown by circumstantial evidence alone. Therefore, to convict the accused for willful failure to file ITR or submit accurate information, it must be shown that the accused was (1) aware of his/her obligation to file annual ITR or submit accurate information, but that (2) he/she, or his/her supposed agent, nevertheless voluntarily, knowingly and intentionally failed to file the required ret urns or submit accurate information. Bad faith or intent to defraud need not be shown.

As can be observed in the first case, the accused knew that she had to timely file and supply correct and accurate information of the joint ITR with the BIR in relation to the profession or the position she holds. The knowledge was presumed based on the fact that Ms. Kintanar is an “experienced” businesswoman, having been an independent distributor of a product for several years. However, despite this knowledge, the CTA found that she voluntarily, knowingly and intentionally failed to fulfill her tax responsibilities by not participating in the filing of the ITR and ensuring that everything was filed correctly and accurately. As compared with the Santos case, which the SC affirmed, the element of “voluntarily, knowingly and intentionally” was taken differently by the CTA in consideration of the facts of the case. Ms. Santos fully entrusted her tax obligations and finances to her manager since she was a child. It can be said that she is not an “experienced” manager of her finances and taxes since she never handled such task, as compared with the situation of Ms. Kintanar, who is considered an experienced businesswoman who manages her business as well as her financial and tax responsibilities -- which is expected of somebody in her position (i.e., president and/or businessperson).

The concept of willful blindness doctrine is new in Philippine jurisprudence. The application of this doctrine by the CTA in the said cases was guided by the appreciation of the facts and the pieces of evidence produced by the prosecution and accused to prove the non-existence of willfulness. However, defined and clear standards in its application must be done as guidance for future application. This is necessary to avoid arbitrary application and to encourage proper use of the doctrine by both parties in the case.