While the Internal Revenue Service (IRS) insists on collecting the debt of $85 million via an embargo, Exportadora Bananera Noboa repeats that it owes nothing to the Treasury and announced legal action this week that, according to statements, will stop the enforced payment.

The business, owned by PRIAN leader, Álvaro Noboa, has until Thursday to pay the amount, the result of an audit that the IRS carried out on the 2005 tax year, for presumed tax evasion by the taxpayer.

It received three notifications of the writ of payment from last Wednesday to Friday, and was given three working days in which to pay. That is to say, that the period in which to do so ends this Thursday, upon which the IRS could apply coercive means in case the debt has not been cancelled.

Sources in the IRS explain that once this time has expired, an embargo of goods equivalent to the debt will go ahead. As yet, no date has been set, as they admit that the process will be delayed in valuations and judicial decisions.

The defense asserts that the embargo will be halted by the petition for an exception foreseen by the Tributary Code. The legal director for the banana producer, Fernando Alarcón, has announced a petition for exception that will be raised given that an administrative appeal or challenge is still pending. Last Friday he cited Article 214 of the Code which indicates that presentation of the petition "will suspend execution of the process.

"The defense questions the methodology employed by the IRS to arrive at the amount of tax to be paid to the Revenue, and for that reason submitted a legal (dismissal) as well as administrative (revisionary) appeal.

The director of the IRS, Carlos Marx Carrasco, explained that said appeals will not impede the recuperation of debt and defended the utilization of transfer prices that led to the determination of the adjustment.

Carrasco revealed that in reviewing a court action in London, where the legitimacy of Álvaro Noboa's inheritance was considered, allowed the IRS to identify a holding of companies linked to the Noboa Group located in tax havens and to which they sold the fruit.

Via this mechanism, the IRS suspected that the taxpayer tried to submit a smaller declaration, reporting only the sales to its own linked businesses in tax havens. These are Kelso Enterprises in Nassau (Bahamas) and Pacific Fruit in Delaware.

For that reason, he explained, the IRS saw the need to fix upon transfer prices and establish the adjustment.

Debt in arrears
The IRS director exhorted the taxpayer to pay and by this means avoid further complications, such as, for example, the accumulation of interest or the initiation of penal action by the IRS for the crime of tax fraud, he said in Canal UNO.

Published in El Universo Newspaper of Ecuador, 25 May 2010.