Practice question
A seller creates a sham “donation” document while secretly collecting and concealing the full sale price, deliberately to avoid tax known to be due on the true sale. It argues the form’s title alone establishes legal avoidance. Which is correct?
- The document title controls regardless of truth
- Concealed sale proceeds are always nontaxable
- The deliberate unlawful concealment must be assessed by the real transaction, not accepted as avoidance merely from its label
- Every genuine donation is evasion
- Tax motivation alone proves every fraud without evidence
Legal references
- CIR v. Estate of Benigno P. Toda, Jr., G.R. No. 147188, September 14, 2004, main decision: https://lawphil.net/judjuris/juri2004/sep2004/gr_147188_2004.html
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