Guide Notes on Remedies

7/25/2019 Guide Notes on Remedies

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GUIDE NOTES ON REMEDIES

(NATIONAL INTERNAL REVENUE CODE)

Q: Who are the Philippine tax authorities?

* (1) Bureau of Internal Revenue - The BIR is the agency o the go!ern"ent #hich is pri"arily in charge othe a$"inistration an$ enorce"ent o tax la#s un$er the 1%%& Tax 'o$e

() Bureau of Customs - The B' is in charge o the enorce"ent o tari an$ custo"s tax la#s

(+) Assessors and Treasurers of Local Government Units, The assessors an$ treasurers o ./s are incharge o the enorce"ent o local an$ real property tax la#s

Q: 0o# are taxes assesse$?

* (1) Self-Assessment - Taxpayers are reuire$ to ile tax returns or !arious 2in$s o inco"e earne$ #hich"ay 3e su34ect to tax 5xa"ples are inco"e tax6 capital gains tax6 $onor7s tax6 an$ estate tax Whena taxpayer iles the tax return6 he is actually "a2ing a sel-assess"ent

() Deficiency Assessment - 8eiciency assess"ent is an assess"ent "a$e 3y the BIR ater the con$ucto an in!estigation or au$it #hen it in$s that the tax return ile$ 3y the taxpayer contains6 or exa"ple6an un$er-$eclaration o inco"e6 or #hen the taxpayer $oes not at all ile a tax return

9T5: The pro!isions on tax re"e$ies oun$ in the 1%%& Tax 'o$e reer to the go!ern"ent7s right to "a2e$eiciency assess"ents;

** The case o Philiine !ational "il Comany v# Court of Aeals "a$e a $istinction 3et#een a sel-assesse$ tax an$ a BIR-assesse$ tax


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CHAPTER I - REMEDIES IN GENERAL

Sec. 202, Final Deed to Puc!a"e. - In ca"e t!e ta#$a%e "!all not edee& t!e $o$et% a" !eein$o'ided, t!e Re'enue Di"tict ())ice "!all, a" *anto, e#ecute a deed con'e%in* to t!e $uc!a"e "o&uc! o) t!e $o$et% a" !a" +een "old, )ee )o& all lien" o) an% ind !at"oe'e, and t!e deed "!all"uccinctl% ecite allt!e $oceedin*" u$on !ic! t!e 'alidit% o) t!e "ale de$end".

ection A shall 3e $iscusse$ in relation to ection 1=6 #hich rea$s:

Sec. 2/, Rede&$tion o) Po$et% Sold. - it!in one 1 %ea )o& t!e date o)"ale, t!e delin3uent ta#$a%e, o an% one )o !i&, "!all !a'e t!e i*!t o) $a%in* to t!eRe'enue Di"tict ())ice t!e a&ount o) t!e $u+lic ta#e", $enaltie", and intee"t t!eeon)o& t!e date o) delin3uenc% to t!e date o) "ale, to*et!e it! intee"t on "aid $uc!a"e

$ice at t!e ate o) )i)teen $ecent 145 $e annu& )o& t!e date o) $uc!a"e to t!edate o) ede&$tion, and "uc! $a%&ent "!all entitle t!e $e"on $a%in* to t!e deli'e% o)t!e ceti)icate i""ued to t!e $uc!a"e and a ceti)icate )o& t!e "aid Re'enue Di"tict())ice t!at !e !a" t!u" edee&ed t!e $o$et%, and t!e Re'enue Di"tict ())ice "!all)ot!it! $a% o'e to t!e $uc!a"e t!e a&ount +% !ic! "uc! $o$et% !a" t!u" +eenedee&ed, and "aid $o$et% t!eea)te "!all +e )ee )o& t!e lien o) "uc! ta#e" and

$enaltie". T!e one "!all not, !oe'e, +e de$i'ed o) t!e $o""e""ion o) t!e "aid$o$et% and "!all +e entitled to t!e ent" and ot!e inco&e t!eeo) until t!e e#$iationo) t!e ti&e alloed )o it" ede&$tion.

Q: What is the re$e"ption perio$ or properties o a $elinuent taxpayer sol$ at pu3lic auction?9T5: Ea2e a $istinction 3et#een properties o a $elinuent taxpayer an$ tax $elinuentproperties;

* The case o City %ayor of &ue'on City v# Ri'al Commercial Ban(in) Cororation $ealt #ith the interpretationo the re$e"ption perio$ un$er R< o &1A6 other#ise 2no#n as the 1%%1 ocal .o!ern"ent 'o$e (realproperty taxes i"pose$ 3y ./s)6 3ut "ay 3e rele!ant in the $eter"ination o the starting point o there$e"ption perio$ pro!i$e$ in the 1%%& Tax 'o$e (internal re!enue taxes i"pose$ 3y the ational

.o!ern"ent)

In the a3o!e case6 the upre"e 'ourt hel$ that: (1) un$er P8 o ==6 or the Real Property Tax 'o$e6 theone-year re$e"ption perio$ or tax $elinuent properties sol$ at pu3lic auction #as counte$ ro" the $ate oregistration o sale o the property@ () un$er R< o &1A6 or the 1%%1 ocal .o!ern"ent 'o$e6 therec2oning point o the re$e"ption perio$ #as the $ate o sale o the property@ an$ (+) the latter la# eecti!elysuperse$e$ the ol$er la#6 such that the re$e"ption perio$ or tax $elinuent properties shoul$ 3e counte$ro" the $ate o sale o the property 0o#e!er6 the upre"e 'ourt li2e#ise too2 note o the Que>on 'ityRe!enue 'o$e o 1%%+6 #hich pro!i$e$ that the re$e"ption perio$ or tax $elinuent properties #ithin the city#as counte$ ro" the $ate o annotation o sale o the property at the proper registry < special la# pre!ailso!er a general la# Thus6 the Que>on 'ity Re!enue 'o$e o 1%%+ pre!aile$ o!er the 1%%1 ocal .o!ern"ent'o$e in that the re$e"ption perio$ in the case at 3ar #as rec2one$6 not ro" the $ate o sale o the property63ut ro" the $ate o annotation o sale o the property at the proper registry 9'ity Eayor o Que>on 'ity !

Ri>al 'o""ercial Ban2ing 'orporation6 .R o 1&1A++6 +


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Q: 5xplain the statute o li"itations on assess"ent an$ collection o taxes

* The 'IR has three years counte$ ro" the $ate o actual iling o the return or ro" the last $ate prescri3e$3y la# or the iling o such return6 #hiche!er co"es later6 to assess a national internal re!enue tax When the'IR !ali$ly issues an assess"ent6 he has another i!e years to collect the national internal re!enue tax $uethereon 3y $istraint6 le!y6 an$For court procee$ing 9T5: /n$er the 1%&& Tax 'o$e6 the go!ern"ent ha$i!e (D) years to assess an$ another i!e (D) years to collect By !irtue o a 1%C= a"en$"ent to the 1%&& Tax

'o$e6 the assess"ent an$ collection perio$s #ere 3oth re$uce$ to three (+) years To$ay6 un$er the 1%%& Tax'o$e6 the go!ern"ent has three (+) years to assess an$ i!e (D) years to collect;

** The pro!isions on the statute o li"itations on assess"ent an$ collection o taxes shall 3e construe$ an$applie$ li3erally in a!or o the taxpayer an$ strictly against the go!ern"ent

***


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$ierent ro" the original return6 the perio$ o li"itation o the right to issue the sa"e shoul$ 3e counte$ ro"the iling o the a"en$e$ return 0ere6 the changes an$ alterations e"3o$ie$ in the a"en$e$ returnconstitute$ su3stantial ones6 ie6 exclusion o certain ite"s ro" the gross inco"e Thus6 the 'IR7s $eiciencyassess"ent #as not 3arre$ 3y prescription 9'IR ! Phoenix


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t!e E'aluation


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$atial audit +% an aut!oi?ed e'enue o))ice, !o !a" ea"on to +elie'e t!att!e a""e""&ent and collection o) a de)icienc% ta# ill +e ;eo$adi?ed +%dela% +ecau"e o) t!e ta#$a%e>" )ailue to co&$l% it! t!e audit andin'e"ti*ation e3uie&ent" to $e"ent !i" +oo" o) account" ando

$etinent ecod", o to "u+"tantiate all o an% o) t!e deduction",e#e&$tion", o cedit" clai&ed in !i" etun: o

1+ T!e a""e""&ent "ee&" to +e a+ita% in natue, a$$eain* to +e +a"ed on$e"u&$tion" and t!ee i" ea"on to +elie'e t!at it i" lacin* in le*al ando

)actual +a"i": o1c T!e ta#$a%e )ailed to )ile an ad&ini"tati'e $ote"t on account o) t!e alle*ed

)ailue to ecei'e notice o) a""e""&ent and t!ee i" ea"on to +elie'e t!att!e a""e""&ent i" lacin* in le*al ando )actual +a"i": o

1d T!e ta#$a%e )ailed to )ile a e3ue"t )o ein'e"ti*ationecon"ideationit!in 60 da%" )o& ecei$t o) )inal a""e""&ent notice and t!ee i" ea"on to+elie'e t!at t!e a""e""&ent i" lacin* in le*al ando )actual +a"i": o

1e T!e ta#$a%e )ailed to ele'ate to t!e Cout o) Ta# A$$eal" 1CTA an ad'e"edeci"ion o) t!e Co&&i""ione, o !i" aut!oi?ed e$e"entati'e, in "o&eca"e", it!in 60 da%" )o& ecei$t t!eeo) and t!ee i" ea"on to +elie'e t!att!e a""e""&ent i" lacin* in le*al ando )actual +a"i": o

1) T!e a""e""&ent" ee i""ued on o a)te anua% , , !ee t!ede&and notice alle*edl% )ailed to co&$l% it! t!e )o&alitie" $e"ci+edunde Sec. 22 o) t!e National Intenal Re'enue Code o) B: o

1* A""e""&ent" &ade +a"ed on t!e


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t!at in t!e ca"e o) an indi'idual ta#$a%e, !e !a" no ot!e le'ia+le $o$etie"unde t!e la ot!e t!an !i" )a&il% !o&e: o

1d T!e ta#$a%e i" a co&$en"ation inco&e eane it! no ot!e "ouce o)inco&e and t!e )a&il%>" *o"" &ont!l% co&$en"ation inco&e doe" note#ceed t!e le'el" o) co&$en"ation inco&e $o'ided )o unde Sec. /.. o)t!e"e Re*ulation", and it a$$ea" t!at t!e ta#$a%e $o""e""e" no ot!ele'ia+le o di"taina+le a""et", ot!e t!an !i" )a&il% !o&e: o

1e T!e ta#$a%e !a" +een declaed +% an% co&$etent

ti+unalaut!oit%+od%*o'en&ent a*enc% a" +anu$t o in"ol'ent.

T!e Co&&i""ione "!all not con"ide an% o))e )o co&$o&i"e "ettle&ent on t!e*ound o) )inancial inca$acit% o) a ta#$a%e it! Ta# Cedit Ceti)icate 1TCC, i""uedunde t!e National Intenal Re'enue Code o) B o E#ecuti'e (de No. 22, on !ando in tan"it, o it! $endin* clai& )o ta# e)und o ta# cedit it! t!e


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'ourt sai$6 it #oul$ 3e pre"ature to $eclare that the co"pro"ise on the estate tax lia3ility ha$ 3een perecte$an$ consu""ate$6 consi$ering the earlier $eter"ination that the assess"ent against the estate #as !oi$9'IR ! Reyes6 .R o 1D%%=6 & Ganuary AA;

Q: What is a co"pro"ise penalty?

* In all cases o cri"inal !iolations o the 1%%& Tax 'o$e6 not in!ol!ing the co""ission o rau$ulent acts6pay"ent o co"pro"ise penalties "ay 3e suggeste$ to the taxpayer in lieu o cri"inal prosecution ince

co"pro"ise penalties are only a"ounts suggeste$ in settle"ent o cri"inal lia3ility an$ "ay thereore not 3ei"pose$ on the taxpayer6 the !iolation shall 3e reerre$ to the appropriate oice or cri"inal action in the e!entthe taxpayer reuses to pay the suggeste$ co"pro"ise penalty < co"pro"ise penalty shall 3e pai$ on top othe $eiciency 3asic tax6 surcharge6 an$ interest

n the other han$6 cases in!ol!ing rau$6 such as acts co""itte$ as "eans o tax e!asion6 shall 3e reerre$$irectly to the appropriate oice or cri"inal action 9Re!enue Ee"oran$u" r$er o 1%-A&6 C


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u"e and e)und t!ei 'alue u$on $oo) o) de"tuction. No cedit o e)und o) ta#e" o $enaltie" "!all +ealloed unle"" t!e ta#$a%e )ile" in itin*it! t!e Co&&i""ione a clai& )o cedit o e)und it!in to 12 %ea" a)te t!e $a%&ent o) t!e ta# o

$enalt%8 Po'ided, !oe'e, T!at a etun )iled "!oin* an o'e$a%&ent "!all +e con"ideed a" aitten clai& )o cedit o e)und.

A Ta# Cedit Ceti)icate 'alidl% i""ued unde t!e $o'i"ion" o) t!i" Code &a% +e a$$lied a*ain"t an%intenal e'enue ta#, e#cludin* it!!oldin* ta#e", )o !ic! t!e ta#$a%e i" diectl% lia+le. An%

e3ue"t )o con'e"ion into e)und o) unutili?ed ta# cedit" &a% +e alloed, "u+;ect to t!e $o'i"ion"o) Section 260 o) t!i" Code8 Po'ided, T!at t!e oi*inal co$% o) t!e Ta# Cedit Ceti)icate "!oin* acedita+le +alance i" "uendeed to t!e a$$o$iate e'enue o))ice )o 'ei)ication and cancellation8Po'ided, )ut!e, T!at in no ca"e "!all a ta# e)und +e *i'en e"ultin* )o& a'ail&ent o) incenti'e"*anted $u"uant to "$ecial la" )o !ic! no actual $a%&ent a" &ade.

T!e Co&&i""ione "!all "u+&it to t!e C!ai&en o) t!e Co&&ittee on a%" and Mean" o) +ot! t!eSenate and Hou"e o) Re$e"entati'e", e'e% "i# 1 &ont!", a e$ot on t!e e#eci"e o) !i" $oe"unde t!i" Section, "tatin* t!eein t!e )olloin* )act" and in)o&ation, a&on* ot!e"8 na&e" andadde""e" o) ta#$a%e" !o"e ca"e" !a'e +een t!e "u+;ect o) a+ate&ent o co&$o&i"e: a&ountin'ol'ed: a&ount co&$o&i"ed o a+ated: and ea"on" )o t!e e#eci"e o) $oe8 Po'ided, T!at t!e"aid e$ot "!all +e $e"ented to t!e ('e"i*!t Co&&ittee in Con*e"" t!at "!all +e con"tituted todete&ine t!at "aid $oe" ae ea"ona+l% e#eci"ed and t!at t!e *o'en&ent i" not undul% de$i'edo) e'enue".

Q: Who "ay ile a clai" or tax reun$ or cre$it un$er this pro!ision?

* il2air (ingapore) Pte t$ #as in!ol!e$ in a series o clai"s or tax reun$ or cre$it or excise taxes pai$on its purchases o a!iation 4et uel ro" Petron 'orporation or $ierent taxa3le perio$s il2air7s "ainargu"ent #as that it #as exe"pt ro" pay"ent o excise tax 3y !irtue o ection 1+D(3) o the 1%%& Tax 'o$ean$


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Pag3ilao 'orporation6 .R o 1&1%6 1 epte"3er AAC@ also6 'IR !


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I) t!e $ote"t i" denied in !ole o in $at, o i" not acted u$on it!in one !undedei*!t% 10 da%" )o& "u+&i""ion o) docu&ent", t!e ta#$a%e ad'e"el% a))ected +%t!e deci"ion o inaction &a% a$$eal to t!e Cout o) Ta# A$$eal" it!in t!it% 160 da%")o& ecei$t o) t!e "aid deci"ion, o )o& t!e la$"e o) one !unded ei*!t% 10-da%

$eiod: ot!ei"e, t!e deci"ion "!all +eco&e )inal, e#ecuto% and de&anda+le.

JGGB: The tax"a1er has t/o o"tions on inaction or no ecision renere:

-% +ile an a""eal to the CTA /ithin 2 a1s from the la"se of the %3 a1 "erio4 or- 5ait for the ecision even if the %3 a1 "erio ha alrea1 la"se an ma6e an a""eal /ithin 2 a1s u"on

its recei"t -)ascona Case.

* /pon receipt o a !ali$ Preli"inary


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* The issue in %arcos v# Court of Aeals #as #hether the BIR ha$ the authority to collect6 3y the su""aryre"e$y o le!ying upon an$ sale o real properties o the $ece$ent6 estate tax $eiciencies6 #ithout thecognition an$ authority o the court sitting in pro3ate o!er the suppose$ #ill o the $ecease$ The upre"e'ourt ans#ere$ in this #ise: There is nothing in the Tax 'o$e6 an$ in the pertinent re"e$ial la#s that i"pliesthe necessity o the pro3ate or estate settle"ent court7s appro!al o the state7s cla" or estate taxes6 3eorethe sa"e can 3e enorce$ an$ collecte$J

The 0igh 'ourt #ent on to say that the $eiciency tax assess"ent6 ha!ing alrea$y 3eco"e inal6 executory6

an$ $e"an$a3le6 coul$ alrea$y 3e collecte$ through the su""ary re"e$y o $istraint or le!y pursuant toection AD o the 1%%& Tax 'o$e 9Earcos ! 'ourt o


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or the collection o such tax "ay 3e ile$ #ithout assess"ent6 at any ti"e #ithin ten (1A) years ro" $isco!eryo the alsity6 rau$ or o"issionJ


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di"taint an% *ood", c!attel" o e))ect", and t!e $e"onal $o$et%, includin* "toc" and ot!e"ecuitie", de+t", cedit", +an account", and intee"t" in and i*!t" to $e"onal $o$et% o) "uc!

$e"on" :in "u))icient 3uantit% to "ati")% t!e ta#, o c!a*e, to*et!e it! an% ince&ent t!eetoincident to delin3uenc%, and t!e e#$en"e" o) t!e di"taint and t!e co"t o) t!e "u+"e3uent "ale.

A e$ot on t!e di"taint "!all, it!in ten 10 da%" )o& ecei$t o) t!e aant, +e "u+&itted +% t!edi"tainin* o))ice to t!e Re'enue Di"tict ())ice, and to t!e Re'enue Re*ional Diecto8 Po'ided,T!at t!e Co&&i""ione o !i" dul% aut!oi?ed e$e"entati'e "!all, "u+;ect to ule" and e*ulation"

$o&ul*ated +% t!e Seceta% o) Finance, u$on eco&&endation o) t!e Co&&i""ione, !a'e t!e$oe to li)t "uc! ode o) di"taint8 Po'ided, )ut!e, T!at a con"olidated e$ot +% t!e Re'enueRe*ional Diecto &a% +e e3uied +% t!e Co&&i""ione a" o)ten a" nece""a%.

20B1


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I) !e doe" not do "o, t!e "ale "!all $oceed and "!all +e !eld eit!e at t!e &ain entance o) t!e&unici$al +uildin* o cit% !all, o on t!e $e&i"e" to +e "old, a" t!e o))ice conductin* t!e

$oceedin*" "!all dete&ine and a" t!e notice o) "ale "!all "$eci)%.

it!in )i'e 14 da%" a)te t!e "ale, a etun +% t!e di"tainin* o le'%in* o))ice o) t!e $oceedin*" "!all+e enteed u$on t!e ecod" o) t!e Re'enue Collection ())ice, t!e Re'enue Di"tict o))ice and t!eRe'enue Re*ional Diecto. T!e Re'enue Collection ())ice, in con"ultation it! t!e Re'enue di"tict())ice, "!all t!en &ae out and deli'e to t!e $uc!a"e a ceti)icate )o& !i" ecod", "!oin* t!e

$oceedin*" o) t!e "ale, de"ci+in* t!e $o$et% "old "tatin* t!e na&e o) t!e $uc!a"e and "ettin*out t!e e#act a&ount o) all ta#e", $enaltie" and intee"t8 Po'ided, !oe'e, T!at in ca"e t!e

$oceed" o) t!e "ale e#ceed" t!e clai& and co"t o) "ale, t!e e#ce"" "!all +e tuned o'e to t!e oneo) t!e $o$et%.

T!e Re'enue Collection ())ice, u$on a$$o'al +% t!e Re'enue Di"tict ())ice &a%, out o) !i"collection, ad'ance an a&ount "u))icient to de)a% t!e co"t" o) collection +% &ean" o) t!e "u&&a%e&edie" $o'ided )o in t!i" Code, includin*: t!e $e"e'ation o tan"$otation in ca"e o) $e"onal

$o$et%, and t!e ad'eti"e&ent and "u+"e3uent "ale, +ot! in ca"e" o) $e"onal and eal $o$et%includin* i&$o'e&ent" )ound on t!e latte. In !i" &ont!l% collection e$ot", "uc! ad'ance" "!all +ee)lected and "u$$oted +% ecei$t".

Sec. 2/, Rede&$tion o) Po$et% Sold. - it!in one 1 %ea )o& t!e date o) "ale, t!e delin3uentta#$a%e, o an% one )o !i&, "!all !a'e t!e i*!t o) $a%in* to t!e Re'enue Di"tict ())ice t!e a&ounto) t!e $u+lic ta#e", $enaltie", and intee"t t!eeon )o& t!e date o) delin3uenc% to t!e date o) "ale,to*et!e it! intee"t on "aid $uc!a"e $ice at t!e ate o) )i)teen $ecent 145 $e annu& )o& t!edate o) $uc!a"e to t!e date o) ede&$tion, and "uc! $a%&ent "!all entitle t!e $e"on $a%in* to t!edeli'e% o) t!e ceti)icate i""ued to t!e $uc!a"e and a ceti)icate )o& t!e "aid Re'enue Di"tict())ice t!at !e !a" t!u" edee&ed t!e $o$et%, and t!e Re'enue Di"tict ())ice "!all )ot!it! $a%o'e to t!e $uc!a"e t!e a&ount +% !ic! "uc! $o$et% !a" t!u" +een edee&ed, and "aid $o$et%t!eea)te "!all +e )ee )o& t!e lien o) "uc! ta#e" and $enaltie". T!e one "!all not, !oe'e, +ede$i'ed o) t!e $o""e""ion o) t!e "aid $o$et% and "!all +e entitled to t!e ent" and ot!e inco&et!eeo) until t!e e#$iation o) t!e ti&e alloed )o it" ede&$tion.

Sec. 24, Fo)eitue to Go'en&ent )o ant o)


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Sec. 2B, Fut!e Di"taint o Le'%. - T!e e&ed% +% di"taint o) $e"onal $o$et% and le'% on ealt%&a% +e e$eated i) nece""a% until t!e )ull a&ount due, includin* all e#$en"e", i" collected.

Sec. 2, In;unction not A'aila+le to Re"tain Collection o) Ta#. - No cout "!all !a'e t!e aut!oit% to*ant an in;unction to e"tain t!e collection o) an% national intenal e'enue ta#, )ee o c!a*ei&$o"ed +% t!i" Code.

Q: 5xplain the go!ern"ent7s policy on in4unctions that restrain the collection o taxes

* n #hether the courts can restrain the collection o taxes on the groun$ that their !ali$ity is $ispute$ 3y thetaxpayer6 David v# Ramos ans#ere$ in the negati!e The case pro!i$e$ a sur!ey o cases $iscussing theprohi3ition against in4unctions that restrain the collection o taxes6 e!entually ruling that 'ourts o LirstInstance6 no# Regional Trial 'ourts6 ha!e no 4uris$iction to restrain the collection o taxes 98a!i$ ! Ra"os6.R o -=+AA6 +1 cto3er 1%D1;** InAn)eles City v# An)eles .lectric Cororation6 the ruling o the upre"e 'ourt #as that the prohi3ition onthe issuance o a #rit o in4unction to en4oin the collection o taxes applie$ only to national internal re!enuetaxes6 not to local taxes ection 1C o the 1%%& Tax 'o$e $oes not ha!e a counterpart pro!ision in the 1%%1ocal .o!ern"ent 'o$e Thus6 the upre"e 'ourt uphel$ the RT'7s $ecision in or$ering the issuance o the#rit o preli"inary in4unction en4oining


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3ecause the plainti ha$ no notice o the tax6 there #as no !ali$ su3sisting lien upon the tiesJ 90ong2ong hanghai Ban2ing 'orporation ! Raerty6 .R o -1+1CC6 1D o!e"3er 1%1C;

** In Reu*lic v# .nri2ue'6 the 'IR ser!e$ a #arrant o $istraint o!er t#o 3arges o#ne$ 3y Eariti"e 'o"panyo the Philippines to satisy !arious $eiciency taxes o sai$ co"pany ater6 the sa"e t#o 3arges #eresu34ect to le!y on execution 3y !irtue o a ci!il case ile$ an$ #on against Eariti"e 'o"pany o thePhilippines The upre"e 'ourt rule$ that the clai" o the go!ern"ent pre$icate$ on a tax lien is superior tothe clai" o a pri!ate litigant pre$icate$ on a 4u$g"ent The tax lien attaches not only ro" the ser!ice o the

#arrant o $istraint o personal property 3ut ro" the ti"e the tax 3eca"e $ue an$ paya3leJ Besi$es6 the$istraint #as "a$e long 3eore the #rit o execution #as issue$ to i"ple"ent the le!y on execution 9Repu3lic! 5nriue>6 .R o -&C+%16 1 cto3er 1%CC;

*** Relate$ to the pre!ious case6 in CIR v# !LRC6 the 'IR ser!e$ a #arrant o $istraint o!er our 3argeso#ne$ 3y Eariti"e 'o"pany o the Philippines to satisy !arious $eiciency taxes o sai$ co"pany ater6 thesa"e our 3arges #ere le!ie$ upon execution to satisy a 4u$g"ent or unpai$ #ages an$ other 3eneits oe"ployees o Eariti"e 'o"pany o the Philippines


19/30

2221+ I) +e)oe t!e e#$iation o) t!e ti&e $e"ci+ed in Section 206 )o t!e a""e""&ent o) t!e ta#, +ot!t!e Co&&i""ione and t!e ta#$a%e !a'e a*eed in itin* to it" a""e""&ent a)te "uc! ti&e, t!e ta#&a% +e a""e""ed it!in t!e $eiod a*eed u$on. T!e $eiod "o a*eed u$on &a% +e e#tended +%"u+"e3uent itten a*ee&ent &ade +e)oe t!e e#$iation o) t!e $eiod $e'iou"l% a*eed u$on.

Q: What is a #ai!er o the statute o li"itations? What are the reuire"ents or a !ali$ #ai!er o the statute oli"itations?

3 RE o A-%A an$ R8e$(=) The 'IR or the re!enue oicial authori>e$ 3y hi" "ust sign the #ai!er in$icating the BIR7s acceptance

an$ agree"ent to the #ai!er6 an$ the $ate o such acceptance 3y the BIR shoul$ 3e in$icate$(D) Both the $ate o execution 3y the taxpayer an$ the $ate o acceptance 3y the BIR shoul$ 3e prior to the

expiration o the perio$ o prescription or 3eore the lapse o the perio$ agree$ upon in case asu3seuent agree"ent is execute$

() The #ai!er "ust 3e in three copies: the original copy to 3e attache$ to the $oc2et o the case6 thesecon$ copy or the taxpayer6 an$ the thir$ copy or the ice accepting the #ai!er

9Re!enue Ee"oran$u" r$er o A-%A6 =


20/30

**** In CIR v# 5udos %etal Cororation+ the 'IR #as una3le to assess Su$os Eetal 'orporation o its taxlia3ility or the taxa3le year 1%%C #ithin the three-year prescripti!e perio$ state$ in ection A+ o the 1%%&Tax 'o$e 0o#e!er6 the corporation7s accountant execute$ t#o Wai!ers o the 8eense o Prescription on$ierent $ates The 'IR 3an2e$ on these #ai!ers to sustain the !ali$ity o the assess"ent "a$e against thecorporation The upre"e 'ourt rule$ against the 'IR as the t#o #ai!ers #ere not co"pliant #ith theproce$ures lai$ $o#n in RE o A-%A an$ R8e$ #ritten authority o the representati!e to sign the #ai!er in 3ehal o the taxpayer@ () the #ai!ersaile$ to in$icate the $ate o acceptance@ an$ (+) the act o receipt 3y the taxpayer o its ile copy #as notin$icate$ in the original copies o the #ai!ers 9'IR ! Su$os Eetal 'orporation6 .R o 1&CAC&6 D Eay A1A;

2221c An% intenal e'enue ta# !ic! !a" +een a""e""ed it!in t!e $eiod o) li&itation a" $e"ci+edin $aa*a$! 1a !eeo) &a% +e collected +% di"taint o le'% o +% a $oceedin* in cout it!in )i'e 14%ea" )olloin* t!e a""e""&ent o) t!e ta#.

9T5: Recall that the go!ern"ent has either + years or 1A years to assess In 3oth cases6 the go!ern"enthas D years to collect;

2221d An% intenal e'enue ta#, !ic! !a" +een a""e""ed it!in t!e $eiod a*eed u$on a" $o'idedin $aa*a$! 1+ !eeina+o'e, &a% +e collected +% di"taint o le'% o +% a $oceedin* in cout it!int!e $eiod a*eed u$on in itin* +e)oe t!e e#$iation o) t!e )i'e 14-%ea $eiod. T!e $eiod "oa*eed u$on &a% +e e#tended +% "u+"e3uent itten a*ee&ent" &ade +e)oe t!e e#$iation o) t!e

$eiod $e'iou"l% a*eed u$on.

2221e Po'ided, !oe'e, T!at not!in* in t!e i&&ediatel% $ecedin* and $aa*a$! 1a !eeo) "!all+e con"tued to aut!oi?e t!e e#a&ination and in'e"ti*ation o in3ui% into an% ta# etun )iled inaccodance it! t!e $o'i"ion" o) an% ta# a&ne"t% la o decee.

Sec. 226, Su"$en"ion o) Runnin* o) Statute o) Li&itation". - T!e unnin* o) t!e Statute o) Li&itation"$o'ided in Section" 206 and 222 on t!e &ain* o) a""e""&ent and t!e +e*innin* o) di"taint o le'%a $oceedin* in cout )o collection, in e"$ect o) an% de)icienc%, "!all +e "u"$ended )o t!e $eiod

duin* !ic! t!e Co&&i""ione i" $o!i+ited )o& &ain* t!e a""e""&ent o +e*innin* di"taint ole'% o a $oceedin* in cout and )o "i#t% 10 da%" t!eea)te: !en t!e ta#$a%e e3ue"t" )o aein'e"ti*ation !ic! i" *anted +% t!e Co&&i""ione: !en t!e ta#$a%e cannot +e located in t!eadde"" *i'en +% !i& in t!e etun )iled u$on !ic! a ta# i" +ein* a""e""ed o collected8 Po'ided,t!at, i) t!e ta#$a%e in)o&" t!e Co&&i""ione o) an% c!an*e in adde"", t!e unnin* o) t!e Statute o)Li&itation" ill not +e "u"$ended: !en t!e aant o) di"taint o le'% i" dul% "e'ed u$on t!eta#$a%e, !i" aut!oi?ed e$e"entati'e, o a &e&+e o) !i" !ou"e!old it! "u))icient di"cetion, andno $o$et% could +e located: and !en t!e ta#$a%e i" out o) t!e P!ili$$ine". 95"phasis supplie$;

9T5: Re"e"3er that any suspension o the running o the statute o li"itations #or2s to the $etri"ent othe taxpayer in that the tax authorities are gi!en "ore ti"e to assess an$For to collect;

Q: 'ite instances on the suspension or interruption o the running o statute o li"itations 9Relate the

ollo#ing cases to ection (c);

3 Ban( of the Philiine Islands v# CIR is instructi!e on the topic o suspension o running o the statute oli"itations on collection 9This case #as go!erne$ 3y the pro!isions o the 1%&& Tax 'o$e; In ruling that thego!ern"ent7s right to collect ha$ alrea$y prescri3e$6 the upre"e 'ourt "a$e the ollo#ing points:(1) < reuest or reconsi$eration or rein!estigation 3y the taxpayer6 #ithout a !ali$ #ai!er o the prescripti!e

perio$s or the assess"ent an$ collection o tax6 #ill not suspen$ the running thereo

20


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() 5!en in the a3sence o a #ai!er6 the running o the statute o li"itations on assess"ent an$ collection otaxes is consi$ere$ suspen$e$ #hen the taxpayer reuests or a rein!estigation #hich is grante$ 3y the'o""issionerJ 9ection +6 1%%& Tax 'o$e;

(+) < reuest or reconsi$eration reers to a plea or a re-e!aluation o an assess"ent on the 3asis oexisting recor$s #ithout nee$ o a$$itional e!i$ence6 #hile a reuest or rein!estigation reers to a pleaor re-e!aluation o an assess"ent on the 3asis o ne#ly-$isco!ere$ or a$$itional e!i$ence that ataxpayer inten$s to present in the rein!estigation

(=) The reuest or rein!estigation "ust also 3e grante$ 3y the BIR 'o""issioner to suspen$ the running o

the statute o li"itations The 3ur$en o proo that the taxpayer7s reuest or rein!estigation ha$ 3eenactually grante$ shall 3e on the BIR 'o""issioner

(D) The upre"e 'ourt ha$ occasion to $iscuss the case o CIR v# Suyoc Consolidated %inin) Co# #hichpro!i$es one other exception to the statute o li"itations on collection o taxes .enerally6 a reuest orreconsi$eration or rein!estigation 3y the taxpayer6 in or$er to suspen$ the running o the statute oli"itations6 "ust 3e prece$e$ 3y a #ai!er o the statute o li"itations


22/30

a*ain"t t!e "a&e, t!ou*! t!e Solicito Geneal, an% ;ud*&ent, da&a*e" o co"t" eco'eed in "uc!action "!all +e "ati")ied +% t!e Co&&i""ione, u$on a$$o'al o) t!e Seceta% o) Finance, o i) t!e"a&e +e $aid +% t!e $e"on u"ed "!all +e e$aid o ei&+u"ed to !i&.

No "uc! ;ud*&ent, da&a*e", o co"t" "!all +e $aid o ei&+u"ed in +e!al) o) a $e"on !o !a"acted ne*li*entl% o in +ad )ait!, o it! ill)ul o$$e""ion.

CHAPTER III 9 PR(TESTING AN ASSESSMENT, REF7ND, ETC.

Sec. 22, Pote"tin* o) A""e""&ent. - !en t!e Co&&i""ione o !i" dul% aut!oi?ed e$e"entati'e)ind" t!at $o$e ta#e" "!ould +e a""e""ed, !e "!all )i"t noti)% t!e ta#$a%e o) !i" )indin*"8 $o'ided,!oe'e, T!at a $ea""e""&ent notice "!all not +e e3uied in t!e )olloin* ca"e"81a !en t!e )indin* )o an% de)icienc% ta# i" t!e e"ult o) &at!e&atical eo in t!e co&$utation o)

t!e ta# a" a$$eain* on t!e )ace o) t!e etun: o1+ !en a di"ce$anc% !a" +een dete&ined +eteen t!e ta# it!!eld and t!e a&ount actuall%

e&itted +% t!e it!!oldin* a*ent: o1c !en a ta#$a%e !o o$ted to clai& a e)und o ta# cedit o) e#ce"" cedita+le it!!oldin* ta#

)o a ta#a+le $eiod a" dete&ined to !a'e caied o'e and auto&aticall% a$$lied t!e "a&ea&ount clai&ed a*ain"t t!e e"ti&ated ta# lia+ilitie" )o t!e ta#a+le 3uate o 3uate" o) t!e"ucceedin* ta#a+le %ea: o

1d !en t!e e#ci"e ta# due on e#ci"ea+le aticle" !a" not +een $aid: o1e !en t!e aticle locall% $uc!a"ed o i&$oted +% an e#e&$t $e"on, "uc! a", +ut not li&ited to,

'e!icle", ca$ital e3ui$&ent, &ac!ineie" and "$ae $at", !a" +een "old, taded o tan")eed tonon-e#e&$t $e"on".

T!e ta#$a%e" "!all +e in)o&ed in itin* o) t!e la and t!e )act" on !ic! t!e a""e""&ent i" &ade:ot!ei"e, t!e a""e""&ent "!all +e 'oid.it!in a $eiod to +e $e"ci+ed +% i&$le&entin* ule" and e*ulation", t!e ta#$a%e "!all +ee3uied to e"$ond to "aid notice. I) t!e ta#$a%e )ail" to e"$ond, t!e Co&&i""ione o !i" dul%aut!oi?ed e$e"entati'e "!all i""ue an a""e""&ent +a"ed on !i" )indin*".

Suc! a""e""&ent &a% +e $ote"ted ad&ini"tati'el% +% )ilin* a e3ue"t )o econ"ideation o

ein'e"ti*ation it!in t!it% 160 da%" )o& ecei$t o) t!e a""e""&ent in "uc! )o& and &anne a"&a% +e $e"ci+ed +% i&$le&entin* ule" and e*ulation". it!in "i#t% 10 da%" )o& )ilin* o) t!e

$ote"t, all ele'ant "u$$otin* docu&ent" "!all !a'e +een "u+&itted: ot!ei"e, t!e a""e""&ent"!all +eco&e )inal.

I) t!e $ote"t i" denied in !ole o in $at, o i" not acted u$on it!in one !unded ei*!t% 10 da%")o& "u+&i""ion o) docu&ent", t!e ta#$a%e ad'e"el% a))ected +% t!e deci"ion o inaction &a%a$$eal to t!e Cout o) Ta# A$$eal" it!in t!it% 160 da%" )o& ecei$t o) t!e "aid deci"ion, o )o& t!ela$"e o) one !unded ei*!t% 10-da% $eiod: ot!ei"e, t!e deci"ion "!all +eco&e )inal, e#ecuto%and de&anda+le.

A""e""&ent in *eneal

Liling o return Issuance o etter o


23/30

Preli"inary


24/30

JGGB: (+r $it for the de"ision e,en if the 180 d$' period h$d $lre$d' l$psed

$nd &pon its re"eipt* $ppe$l to the -.A ithin 30 d$'s (/$s"on$ -$se


25/30

* The ol$ reuire"ent o "erely notifyin) the taxpayer o the 'IR7s in$ings #as change$ in 1%%C to informin)the taxpayer o not only the la#6 3ut also o the acts on #hich an assess"ent #oul$ 3e "a$e In CIR v#Reyes+ the upre"e 'ourt spo2e o the no# "an$atory reuire"ent to inor" the taxpayer o the la# an$ theacts on #hich the assess"ent is "a$e It sai$: To 3e si"ply inor"e$ in #riting o the in!estigation 3eingcon$ucte$ an$ o the reco""en$ation or the assess"ent o the estate taxes $ue is nothing 3ut a perunctory$ischarge o the tax unction o correctly assessing a taxpayer The act cannot 3e ta2en to "ean that Reyesalrea$y 2ne# the la# an$ the acts on #hich the assess"ent #as 3ase$ It $oes not at all conor" to theco"pulsory reuire"ent un$er ection CJ 9'IR ! Reyes6 .R o 1D%%=6 & Ganuary AA;

Q: 8iscuss the rule that all presu"ptions are in a!or o the correctness o a tax assess"ent Is there anexception to the rule?

* In Sy Po v# Court of Ta$ Aeals+ the late Po Bien ing #as the sole proprietor o il!er 'up Wine Lactory6engage$ in the "anuacture an$ sale o co"poun$e$ liuors 0e #as assesse$ $eiciency inco"e tax an$speciic tax or !arious years ater the BIR con$ucte$ in!estigation


26/30

#ithin the thirty-$ay perio$ (1) The assess"ent shall 3eco"e inal The taxpayer #ill then 3e 3arre$ ro"$isputing the correctness o the assess"ent or in!o2ing any $eense that #ill reopen the uestion o itslia3ility on the "erits () There arises a presu"ption o correctness o the tax assess"ent 9'IR ! Ban2 othe Philippine Islan$s6 .R o 1+=A6 1&


27/30

Sec. 22, Reco'e% o) Ta# Eoneou"l% o Ille*all% Collected. - No "uit o $oceedin* "!all +e&aintained in an% cout )o t!e eco'e% o) an% national intenal e'enue ta# !eea)te alle*ed to !a'e+een eoneou"l% o ille*all% a""e""ed o collected, o o) an% $enalt% clai&ed to !a'e +een collectedit!out aut!oit%, o) an% "u& alle*ed to !a'e +een e#ce""i'el% o in an% &anne on*)ull% collectedit!out aut!oit%, o o) an% "u& alle*ed to !a'e +een e#ce""i'el% o in an% &anne on*)ull%collected, until a clai& )o e)und o cedit !a" +een dul% )iled it! t!e Co&&i""ione: +ut "uc! "uito $oceedin* &a% +e &aintained, !et!e o not "uc! ta#, $enalt%, o "u& !a" +een $aid unde

$ote"t o due"".

In an% ca"e, no "uc! "uit o $oceedin* "!all +e )iled a)te t!e e#$iation o) to 12 %ea" )o& t!edate o) $a%&ent o) t!e ta# o $enalt% e*adle"" o) an% "u$e'enin* cau"e t!at &a% ai"e a)te

$a%&ent8 Po'ided, !oe'e, T!at t!e Co&&i""ione &a%, e'en it!out a itten clai& t!ee)o,e)und o cedit an% ta#, !ee on t!e )ace o) t!e etun u$on !ic! $a%&ent a" &ade, "uc!

$a%&ent a$$ea" cleal% to !a'e +een eoneou"l% $aid.

Pocedue )o eco'e% o) intenal e'enue ta#

Pay"ent


28/30

** o"eti"e in 1%CD6 RE' o &-CD #as issue$ It state$ that o!erpai$ inco"e taxes #ere not co!ere$ 3y thet#o-year prescripti!e perio$ un$er the 1%&& Tax 'o$e an$ that taxpayers coul$ clai" tax reun$s or cre$its orthe excess uarterly inco"e tax #ith the BIR #ithin 1A years un$er e$ input H


29/30

In the case o corporationsLro" the ti"e o iling o Linal


30/30

Sec. 2/, Non-Retoacti'it% o) Rulin*". 9 An% e'ocation, &odi)ication o e'e"al o) an% o) t!e ule"and e*ulation" $o&ul*ated in accodance it! t!e $ecedin* Section" o an% o) t!e ulin*" ocicula" $o&ul*ated +% t!e Co&&i""ione "!all not +e *i'en etoacti'e a$$lication i) t!ee'ocation, &odi)ication o e'e"al ill +e $e;udicial to t!e ta#$a%e", e#ce$t in t!e )olloin* ca"e"81a !ee t!e ta#$a%e deli+eatel% &i""tate" o o&it" &ateial )act" )o& !i" etun o an%

docu&ent e3uied o) !i& +% t!e

Guide Notes on Remedies

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