MANILA, Philippines — The Bureau of Internal Revenue (BIR) is conducting a discreet investigation into alleged questionable disbursements made by some foundations, which, if found true, will be deemed contrary to the purpose for which they were established, it was learned Friday.

Reports reaching the bureau indicated that some of these tax-exempt organizations were not only used as tax shelters of their owners, but treated them like “piggy banks” where they get funds for their personal use.

A foundation is granted tax exemption by law to be able to carry out its charitable projects.

All cash and assets transferred to a foundation are exempted from donor's tax and all donations are deductible from the income tax returns of the donors.

Officials and directors of foundations are not allowed to get money, or even draw allowances.

Revenue officials said that assets donated to foundations should be used exclusively for the purpose for which they were set up, citing as examples sending poor children to school and to hospitals and for other social welfare projects.

"There were instances that foundations were used as sources of petty cash for the wives and children of some businessmen who put up the charitable organization,” one revenue official claimed.

He cited the case of a politician who allegedly channeled portion of his priority development assistance fund to set up a sports complex for his foundation. He allegedly transferred the sports facilities in his name as if he personally owned them.

The BIR adopts a strict audit procedure before a foundation gets a tax exemption status like investigating its current activities and track records during the last three years.