Tax referrence

7/26/2019 Tax referrence

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FOR FUTURE REFERRENCE

TAXATION

Reviewer

TAXATION 1

CHAPTER 1GENERAL PRINCIPLES

I. Concepts, Nature and Characteristics o Ta!ation and Ta!es.

Ta!ation "eined#

As a process, it is a means by which the sovereign, through itslaw-making body, raises income to defray the necessary expenses ofthe government. It is merely a way of apportioning the costs ofgovernment among those who in some measures are privileged toenjoy its benefits and must bear its burdens.

As a po$er, taxation refers to the inherent power of the state to

demand enforced contributions for public purpose or purposes.

Rationa%e o Ta!ation & The Supreme ourt held!"It is said that taxes are what we pay for civili#ed society.

$ithout taxes, the government would be paraly#ed for lack of themotive power to activate and operate it. %ence, despite the naturalreluctance to surrender part of one&s hard-earned income to thetaxing authorities, every person who is able must contribute his sharein the running of the government. The government for its part isexpected to respond in the form of tangible and intangible benefitsintended to improve the lives of the people and enhance their moraland material values. The s'()iotic re%ationship is the rationa%e ota!ationand should dispel the erroneous notion that it is an arbitrary

method of exaction by those in the seat of power.Taxation is a symbiotic relationship, whereby in exchange

for the protection that the citi#ens get from the government, taxes arepaid.' (ommissioner of Internal )evenue vs *llegre, Inc.,et al., +-/, 0eb. 12, 13

Purposes and O)*ecti+es o Ta!ation

1. Re+enue to provide funds or property with which the Statepromotes the general welfare and protection of its citi#ens.

. Non&Re+enue45)657

a. Pro(otion o Genera% -e%are Taxation may be used as animplement of police powerin order to promote the general welfare ofthe people. 4see +ut# vs *raneta ( 5hil 183 and 9sme:a vs 9rbos(;.). 1, 1>37

b. Reu%ation *s in the case of taxes levied on excises andprivileges like those imposed in tobacco or alcoholic products oramusement places like night clubs, cabarets, cockpits, etc.

In the case of Caltex Phils. Inc. vs COA(;.). B8 which allows backpay certificates aspayment of taxes

8. It is levied on persons or propert' & * tax may also be imposedon acts, transactions, rights or privileges.

?. It is levied by the Statewhich has jurisdiction over the persons oproperty. - The persons, property or service to be taxed must be

subject to the jurisdiction of the taxing state.

/. It is levied by the %a$&(a0in )od'of the StateThe power to tax is a legislative power which under the

onstitution only ongress can exercise through the enactment olaws. *ccordingly, the obligation to pay taxes is a statutory liability.

2. It is levied for pu)%ic purpose or purposes & Taxation involvesand a tax constitutes, a burden to provide income for publicpurposes.


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Theor' and asis o Ta!ation

1. Necessit' Theor'Taxes proceed upon the theory that the existence of the

government is a necessityC that it cannot continue without the meansto pay its expensesC and that for those means, it has the right tocompel all citi#ens and properties within its limits to contribute.

In a case, the Supreme ourt held that!Taxation is a power emanating from necessity. It is a

necessary burden to preserve the State&s sovereignty and a meansto give the citi#enry an army to resist aggression, a navy to defend itsshores from invasion, a corps of civil servants to serve, publicimprovements designed for the enjoyment of the citi#enry and those

which come with the State&s territory and facilities, and protectionwhich a government is supposed to provide. (Phil. Guaranty Co., Inc.vs Commissioner of Internal evenue, !" #CA $$%&.

. The eneits&Protection Theor'The basis of taxation is the reciprocal duty of protection

between the state and its inhabitants. In return for the contributions,the taxpayer receives the general advantages and protection whichthe government affords the taxpayer and his property.

2ua%iications o the eneit&Protection Theor'#

a. It does not mean that only those who are able to pay and dopay taxes can enjoy the privileges and protection given to a citi#en bythe government.

b. 0rom the contributions received, the government renders nospecial or commensurate benefit to any particular property or person.

c. The only benefit to which the taxpayer is entitled is that derived

from his enjoyment of the privileges of living in an organi#ed societyestablished and safeguarded by the devotion of taxes to publicpurposes. (Gome' vs Palomar, % #CA )*&

d. * taxpayer cannot object to or resist the payment of taxessolely because no personal benefit to him can be pointed out asarising from the tax.(+oren'o vs Posaas, - Phil "%"&

>. Lie)%ood Theor'Taxes are the li feblood of the government, being such, their

prompt and certain availability is an imperious need. (Collector ofInternal evenue vs. Goorich International ubber Co., #ept. -,!*-%&$ithout taxes, the government would be paraly#ed for lack ofmotive power to activate and operate it.

Nature o Ta!in Po$er

1. Inherent in so+ereint'@ The power of taxation is inherent insovereignty as an incident or attribute thereof, being essential to theexistence of every government. It can be exercised by thegovernment even if the onstitution is entirely silent on the subject.

a. onstitutional provisions relating to the power of taxation donot operate as grants of the power to the government. They merelyconstitute limitations upon a power which would otherwise bepractically without limit.

b. $hile the power to tax is not expressly provided for in ouconstitutions, its existence is recogni#ed by the provisions relating totaxation.

In the case of /actan Cebu International Airport Authorityvs /arcos, #ept. !!, !**-,as an incident of sovereignty, the powerto tax has been described as "unlimited in its range, acknowledgingin its very nature no limits, so that security against its abuse is to befound only in the responsibility of the legislative which imposes thetax on the constituency who are to pay it.'

. Leis%ati+e in character @ The power to tax is exclusivelylegislative and cannot be exercised by the executive or judiciabranch of the government.

>. Su)*ect to constitutiona% and inherent %i(itations @ *lthoughin one decided case the Supreme ourt called it an awesome powerthe power of taxation is subject to certain limitations. =ost of theselimitations are specifically provided in the onstitution or impliedtherefrom while the rest are inherent and they are those which spring

from the nature of the taxing power itself although, they may or maynot be provided in the onstitution.

Scope o Leis%ati+e Ta!in Po$er 4S * 5 D * =7

1. su)*ects o Ta!ation(the persons, property or occupation etc. tobe taxed3. a(ount or rate o the ta!>. purposes or $hich ta!es sha%% )e %e+ied pro+ided the' arepu)%ic purposes8. apportion(ent o the ta!?. situs o ta!ation

/. (ethod o co%%ection

Is the Po$er to Ta! the Po$er to "estro'3

In the case of Churchill, et al. vs Concepcion (" Phil *-*&it has been ruled that!

The power to impose taxes is one so unlimited in force andso searching in extent so that the courts scarcely venture to declarethat it is subject to any restriction whatever, except such as rest in thediscretion of the authority which exercise it.


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be limited even though the taxes become burdensome orconfiscatory. To say that "the power to tax is the power to destroy' isto describe not the purposes for which the taxing power may be usedbut the degree of vigor with which the taxing power may be employedin order to raise revenue (I ooley 12-113

Constitutiona% Restraints Re# Ta!ation is the Po$er to

"estro'$hile taxation is said to be the power to destroy, it is by no

means unlimited. It is eAually correct to postulate that the 0power totax is not the power to destroy while the Supreme Court sits ,1because of the constitutional restraints placed on a taxing power thatviolated fundamental rights.

In the case ofoxas, et al vs C2A (April -, !*-)&, the Sreminds us that although the power of taxation is sometimes calledthe power to destroy, in order to maintain the general public&s trustand confidence in the ;overnment, this power must be used justlyand not treacherously. The Supreme ourt held!

"The power of taxation is sometimes called also the power

to destroy. Therefore it should be exercised with caution to minimi#einjury to the proprietary rights of a taxpayer. It must be exercisedfairly, eAually and uniformly, lest the tax collector kill the Fhen thatlays the 3olen e33&. *nd, in order to maintain the general public&trust and confidence in the ;overnment this power must be used

justly and not treacherously.'The doctrine seeks to describe, in an extreme, the

conseAuential nature of taxation and its resulting implications, to wit!a. The power to tax must be exercised with caution to minimi#e

injury to proprietary rights of a taxpayerCb. If the tax is lawful and not violative of any of the inherent and

constitutional limitations, the fact alone that it may destroy an activityor object of taxation will not entirely permit the courts to afford any

reliefC andc. * subject or object that may not be destroyed by the taxing

authority may not likewise be taxed. (e.g. exercise of a constitutionalright3

Po$er o 4udicia% Re+ie$ in Ta!ationThe courts cannot review the wisdom or advisability or

expediency of a tax. The court&s power is limited only to theapplication and interpretation of the law.

Eudicial action is limited only to review where involves!1. The determination of validity on the tax in relation toconstitutional precepts or provisions.. The determination, in an appropriate case, of the application of

the law.

Aspects o Ta!ation1. Le+' @ determination of the persons, property or excises to betaxed, the sum or sums to be raised, the due date thereof and thetime and manner of levying and collecting taxes (strictly speaking,such refers to taxation3

. Co%%ection @ consists of the manner of enforcement of theobligation on the part of those who are taxed. (this includes paymentby the taxpayer and is referred to as tax administration3

The two processes together constitute the "ta!ations'ste('.

asic Princip%es o a Sound Ta! S'ste( 40*T71. 5isca% Ade/uac' the sources of tax revenue should coincide

with, and approximate the needs of government expenditure. . E!cise Ta!es @ charges imposed upon the performance of anact, the enjoyment of a privilege, or the engaging in an occupation.

examples! income tax, value-added tax, estate tax odonor&s tax

H. As to urden

1. "irect Ta!es@ taxes wherein both the 0incience1as well as the0impact1or burden of the tax faces on one person.

examples! income tax, community tax, donor&s tax, estatetax

. Indirect Ta!es@ taxes wherein the incidence of or the liability fothe payment of the tax falls on one person, but the burden thereofcan be shifted or passed to another person.

examples! *T, percentage taxes, customs duties excisetaxes on certain specific goods

I(portant Points to Consider reardin Indirect Ta!es!1. $hen the consumer or end-user of a manufacturer product istax-exempt, such exemption covers only those taxes for which suchconsumer or end-user is directly liable. Indirect taxes are noincluded. %ence, the manufacturer cannot claim exemption from the


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payment of sales tax, neither can the consumer or buyer of theproduct demand the refund of the tax that the manufacturer mighthave passed on to him. (Phil. Acetylene Co. inc. vs Commissioner ofInternal evenue et. al., +4!*$5$, Au3.!$, !*)$&

. $hen the transaction itself is the one that is tax-exempt butthrough error the seller pays the tax and shifts the same to the buyer,the seller gets the refund, but must hold it in trust for buyer.(American ubber Co. case, +4!5*-", April "5, !*-"&

". $here the exemption from indirect tax is given to the contractee,but the evident intention is to exempt the contractor so that suchcontractor may no longer shift or pass on any tax to the contractee,the contractor may claim tax exemption on the transaction(Commissioner of Internal evenue vs 6ohn Gotamco an #ons,Inc., et.al., +4"!5*, 7eb. $, !*)$&

8. $hen the law granting tax exemption specifically includesindirect taxes or when it is clearly manifest therein that legislative

intention to exempt embraces indirect taxes, then the buyer of theproduct or service sold has a right to be reimbursed the amount ofthe taxes that the sellers passed on to him. (/acea vs/acarai3,supra&

. As to Purpose

1. Genera%65isca%6Re+enue @ tax imposed for the general purposesof the government, i.e., to raise revenues for governmental needs.

6xamples! income taxes, *T, and almost all taxes

. Specia%6Reu%ator'@ tax imposed for special purposes, i.e., to

achieve some social or economic needs.6xamples! educational fund tax under )eal 5roperty

Taxation

J. As to 7easure o App%ication

1. Speciic Ta!@ tax imposed per head, unit or number, or by somestandard of weight or measurement and which reAuires noassessment beyond a listing and classification of the subjects to betaxed.

6xamples! taxes on distilled spirits, wines, and fermentedliAuors

. Ad 8a%ore( Ta!@ tax based on the value of the article or thingsubject to tax.example! real property taxes, customs duties

6. As to "ate

1. Proressi+e Ta!@ the rate or the amount of the tax increases asthe amount of the income or earning (tax base3 to be taxedincreases.

examples! income tax, estate tax, donor&s tax

. Reressi+e Ta! @ the tax rate decreases as the amount oincome or earning (tax base3 to be taxed increases.

. 7i!ed Ta! @ tax rates are partly progressive and partlyregressive.

8. Proportionate Ta! @ tax rates are fixed on a flat tax base.examples! real estate tax, *T, and other percentage taxes

0.As to Scope or authorit' i(posin the ta!

1. Nationa% Ta! tax imposed by the . general ly, no l imit as toamount imposed

>. amount depends on the cosof construction or maintenanceof the public improvement used

8. imposed only by the

government

8. imposed by the governmen

or private individuals or entities

b. Pena%t' +s Ta!Pena%t' @ any sanctions imposed as a punishment fo

violations of law or acts deemed injurious.

Ta! +s Pena%t'

1. generally intended to raiserevenue

1. designed to regulate conduc

. imposed only by thegovernment

. imposed by the governmenor private individuals or entities


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c. Specia% Assess(ent +s Ta!Specia% Assess(ent @ an enforced proportional

contribution from owners of lands especially or peculiarly benefitedby public improvements.

Ta! +s Specia% Assess(ent

1. imposed on persons,property and excise

1. levied only on land

. personal liabili ty of theperson assessed

. not a personal liability of theperson assessed, i.e. his liabilityis limited only to the landinvolved

>. based on necessity as wellas on benefits received

>. based wholly on benefits

8. general application (see*postolic 5refect vs Treas. 9fHaguio, 21 5hil ?823

8. exceptional both as time andplace

I(portant Points to Consider Reardin Specia%Assess(ents#1. Since special assessments are not taxes within the constitutionalor statutory provisions on tax exemptions, it follows that theexemption under Sec. (>3, *rt. I of the onstitution does notapply to special assessments.

. %owever, in view of the exempting proviso in #ec. " of the+ocal Government Coe,properties which are actually, irectly anexclusively use for reli3ious, charitable an eucational purposesare not exactlyexempt from real property taxes but are exempt fromthe imposition of special assessments as well.( see Aban&> .The general rule is that an exemption from taxation does notinclude exemption from special assessment.

d. License or Per(it 5ee +s Ta!License or Per(it ee@ is a charge imposed under the

police power for the purposes of regulation.

Ta! +s License6Per(it 5ee

1. enforced contributionassessed by sovereign authorityto defray public expenses

1. legal compensation orreward of an officer for specificpurposes

. for revenue purposes . for regulation purposes

>. an exercise of the taxingpower

>. an exercise of the policepower

8. generally no l imit in theamount of tax to be paid

8. amount is l imited to thenecessary expenses of

inspection and regulation?. imposed also on personsand property

?. imposed on the right toexercise privilege

/. non-payment does notnecessarily make the act orbusiness illegal

/. non-payment makes the actor business illegal

Three 0inds o %icenses are reconi:ed in the %a$#1. +icenses for the regulation of useful occupations.. +icenses for the regulation or restriction of non-usefuloccupations or enterprises

>. +icenses for revenue only

I(portance o the distinctions )et$een ta! and %icenseee#1. Some limitations apply only to one and not to the other, and thaexemption from taxes may not include exemption from license fees.

. The power to regulate as an exercise of police power does noinclude the power to impose fees for revenue purposes. (see

American /ail +ine vs City of 8utuan, +4!-$, /ay "!, !*-$ anrelate cases&>. *n extraction, however, maybe considered both a tax and alicense fee.8. Hut a tax may have only a regulatory purpose.%. The general rule is that the imposition is a tax if its primarypurpose is to generate revenue and regulation is merely incidentalbut if regulation is the primary purpose, the fact that incidentallyrevenue is also obtained does not make the imposition of a tax. (seePro3ressive 9evelopment Corp. vs :ue'on City, !$ #CA -*&

e. "e)t +s Ta!Jebt is based upon juridical tie, created by law, contracts

delicts or Auasi-delicts between parties for their private interest orresulting from their own acts or omissions.

Ta! +s "e)t

1. based on law 1. based on contracts, expressor implied

. generally, cannot beassigned

. assignable

>. general ly payable in money >. may be paid in kind

8. generally not subject to set-

off or compensation

8. may be subject to set-off o

compensation?. imprisonment is a sanctionfor non-payment of tax exceptpoll tax

?. no imprisonment for nonpayment of debt

/. governed by specialprescriptive periods provided forin the Tax ode

/. governed by the ordinaryperiods of prescriptions

2. does not draw interestexcept only when delinAuent

2. draws interest when sostipulated, or in case of default

Genera% Ru%e#Taxes are not subject to set-off or legal compensationThe government and the taxpayer are not creditors and debtors oeach other. 9bligations in the nature of debts are due to the

government in its corporate capacity, while taxes are due to thegovernment in its sovereign capacity (Philex /inin3 Corp. vs CI,

* #CA -)$; epublic vs /ambulao +umber Co., - #CA -&

E!ception# $here both the claims of the government and thetaxpayer against each other have already become due anddemandable as well as fully liAuated. (see 9omin3o vs Garlitos, +4!)*5, 6une *, !*-"&

Pertinent Case#


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Phi%e! 7inin Corp. +s Co((issioner o Interna% Re+enue;.).


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. Non-delegability of the Taxing 5ower>. Territoria%it' or the Situs of Taxation8. E!e(ption of the ;overnment from taxes?. Internationa% omity

b. Constitutiona% Li(itations or those expressly found in theconstitution or implied from its provision

1. "ue process of law. E/ua% protection of law>. 0reedom of Speech and of the press8. Non&inrine(ent of religious freedom?. Non&i(pair(entof contracts/. Non&i(prison(ent for debt or non-payment of poll tax2. 9rigin of Appropriation, )evenue and Tariff Hills. ;nior(it', 6Auitability and 5rogressitivity of Taxation. "e%eationof +egislative *uthority to 0x Tariff )ates, Import and6xport Luotas1B. Tax 6xemption of Properties*ctually, Jirectly, and 6xclusively

used for )eligious haritable11. oting reAuirements in connection with the +egislative Grant ofTax 6xemption1. . Tax exemption of Re+enues and *ssets, including ;rants,6ndowments, Jonations or ontributions to 6ducation Institutions

c. Other Constitutiona% Pro+isions re%ated to Ta!ation

1. Su)*ectand Title of Hills. 5ower of the President to eto an items in an *ppropriation,)evenue or Tariff Hill>. 3 directly to promote the welfare of the community(taxation as an implement of police power3

. The term 0public purpose1 is synonymous with03overnmental purpose1;a purpose affecting the inhabitants of thestate or taxing district as a community and not merely as individuals.

c. * tax levied for a private purpose constitutes a taking ofproperty without due process of law.

d. The purposes to be accomplished by taxation need not beexclusively public. *lthough private individuals are directly benefited,the tax would still be valid provided such benefit is only incidental.

e. The test is not as to who receives the money, but thecharacter of the purpose for which it is expendedC not the immediateresult of the expenditure but rather the ultimate.

g. In the imposition of taxes, public purpose is presumed.

. Test in deter(inin Pu)%ic Purposes inta!

a. "ut' Test @ whether the thing to be threatened by theappropriation of public revenue is something which is the duty of theState, as a government.

b. Pro(otion o Genera% -e%are Test@ whether the law providingthe tax directly promotes the welfare of the community in eAuameasure.

asic Princip%es o a Sound Ta! S'ste(


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namely, that legislative power may be delegated to localgovernments. The theory of non-delegation of legislative powersdoes not apply in maters of local concern. (Pepsi4Cola 8ottlin3 Co. ofthe Phil, Inc. vs City of 8utuan, et . al., +4)!, Au3. ), !*-)&

c. 9ele3ation to Aministrative A3encies with respect to aspectsof 2axation not le3islative in character.

i. Power to value propertyii. Power to assess an collect the taxesi ii. Power to perform computation,

appraisement an aBustment

>. Li(itations on "e%eation

a. It shall not contravene any onstitutional provisions orinherent limitations of taxationC

b. The delegation is effected either by the onstitution orby validly enacted legislative measures or statuteC andc. The delegated levy power, except when the delegation is

by an express provision of onstitution itself, should only be in favorof the local legislative body of the local or municipal governmentconcerned.

5owers which cannot be delegated!i. Jetermination of the su)*ects to be

taxedii. Purposeof the taxiii. A(ount or rateof the taxi+. 7anner+. 7eans

+i. Aencies o co%%ectionvii. Prescri)in the necessary ru%es with

respect thereto

8. Ta! Leis%ation +is&9&+is Ta! Ad(inistration & 6verysystem of taxation consists of two parts!

a. the elements that enter into the imposition of the tax 4S

* 5 D * =7, or tax regulationC andb. the steps taken for its assessment and collection or tax

administrationIf what is delegated is tax legislation, the delegation is

invalidC but if what is involved is only tax administration, the non-delegability rule is not violated.

. Territoria%it' or Situs o Ta!ation

1. I(portant Points to Consider#a. Territoriality or Situs of Taxation means 0place of taxation1

depending on the nature of taxes being imposed.b. It is an inherent mandate that taxation shall only be

exercised on persons, properties, an excisewithin the territory ofthe taxing power because!

b.13 Tax laws do not operate beyond a country&s territorialimit.b.3 5roperty which is wholly and exclusively within the

jurisdiction of another state receives none of the protectionfor which a tax is supposed to be compensation.

c. %owever, the fundamental basis of the right to tax is thecapacity of the 3overnment to provie benefitsan protectionto the obBect of the tax. * person may be taxed, even if he isoutside the taxing state, where there is between him and thetaxing state, a privity of relationship justifying the levy.

. 5actors to Consider in deter(inin Situs o Ta!ationa. kind and lassification of the Tax). location of the subject matter of the tax @ real and pers.c. domicile or residence of the person @ intangible per. 5rop.d. citi#enship of the persone. source of income @ income derived wKin. place where the privilege, business or occupation is being

exercised

J.E!e(ption o the Go+ern(ent ro( Ta!es

1. I(portant Points to Consider#Reasons or E!e(ptions#a.13 To levy tax upon public property would rendenecessary new taxes on other public property for thepayment of the tax so laid and thus, the government wouldbe taxing itself to raise money to pay over to itselfCa.3 In order that the functions of the government shall nobe unduly impedeC and

a.>3 To reduce the amount of money that has to be handedby the government in the course of i ts operations.. Mnless otherwise provided by law, the exemption

applies only to government entities through which thegovernment immediately and directly exercises its sovereignpowers (Infantry Post =xchan3e vs Posaas, % Phil )--&

>.


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b.>3 foreign government may not be sued without itsconsent so that it is useless to assess the tax since it cannot becollected

b.83 reciprocity among states

Constitutiona% Li(itations

1. "ue Process o La$

a. asis# #ec. ! Art. " 0>o person shall be eprive of life,liberty or property without ue process of law x x x.'

Re/uisites #. The interest of the public generally as distinguished from those of a

particular class reAuire the intervention of the stateC. The means employed must be reasonably necessary to the

accomplishment for the purpose and not unduly oppressiveC. The deprivation was done under the authority of a valid law or of the

constitutionC and

. The deprivation was done after compliance with fair and reasonablemethod of procedure prescribed by law.

In a string of cases, the Supreme ourt held that inorder that due process of law must not be done in an arbitrary,despotic, capricious, or whimsical manner.

. E/ua% Protection o the La$

a. asis# #ec.! Art. " 0 xxx >or shall any person be eniethe eual protection of the laws.I(portantPoints to Consider!

1. 6Aual protection of the laws signifies that allpersons subject to legislation shall be treated under circumstances

and conditions both in the privileges conferred and liabilities imposed. This doctrine prohibits class legislation which

discriminates against some and favors others.

b. )eAuisites for a alid lassification1. =ust not be arbitrary

. =ust not be based upon substantial distinctions>. =ust be germane to the purpose of law.8. =ust not be limited to exiting conditions onlyC and?. =ust play eAually to all members of a class.

>. ;nior(it', E/uita)i%it' and Proressi+it' o Ta!ation

a. asis# Sec. (13 *rt. I. The rule of taxation shall beuniform and eAuitable. The ongress shall evolve aprogressive system of taxation.b. I(portant Points to Consider#1. ;nior(it'(eAuality or eAual protection of the laws3

means all taxable articles or kinds or property of the same class shallbe taxed at the same rate. * tax is uniform when the same force andeffect in every place where the subject of it is found.

. E/uita)%e means fair, just, reasonable andproportionate to one&s ability to pay.

>. Proressi+e s'ste( o Ta!ation places stress ondirect rather than indirect taxes, or on the taxpayers& ability to pay

8. IneAuality which results in singling out one particulaclass for taxation or exemption infringes no constitutional limitation(see Commissioner vs. +in3ayen Gulf =lectric, !- #CA $&

?. The rule of uniformity does not call for perfecuniformity or perfect eAuality, because this is hardly attainable.

8. 5reedo( o Speech and o the Press

a. asis#Sec. 8 *rt. III.


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b. I(portant Points to Consider#1. The only penalty for delinAuency in payment is

the payment of surcharge in the form of interest at the rate of 8Nper annum which shall be added to the unpaid amount from due dateuntil it is paid. (Sec. 1/1, +;3

. The prohibition is against "imprisonment' for"non-payment of poll tax'. Thus, a person is subject to imprisonmentfor violation of the community tax law other than for non-payment ofthe tax and for non-payment of other taxes as prescribed by law.

. Oriin or Re+enue, Appropriation and Tari i%%s

a. asis#Sec. 8 *rt. I. "*ll appropriation, revenue or tariffbills, bill authori#ing increase of the public debt, bills of localapplication, and private bills shall originate exclusively in the%ouse of )epresentatives, but the Senate may propose orconcur with amendments.'b. Mnder the above provision, the Senator&s power is not only

to >on%' concur $ith a(end(ents? but also "to propose

amendments'. (2olentino vs #ec. of 7inance, supra&

. "e%eation o Leis%ati+e Authorit' to 5i! Tari Rates,I(ports and E!port 2uotas

a. asis#Sec. (3 *rt. I "x x x The ongress may, by law,authori#e the 5resident to fix within specified limits, and subjectto such limitations and restrictions as it may impose, tariff rates,import and export Auotas, tonnage and wharfage dues, andother duties or imposts within the framework of the nationaldevelopment program of the government.

1B. Ta! E!e(ption o Properties Actua%%', "irect%' and

E!c%usi+e%' used or Re%iious, Charita)%e and Educationa%Purposes

a. asis#Sec. (>3 *rt. I. "haritable institutions, churchesand parsonages or convents appurtenant thereto, mosAues,non-profit cemeteries, and all lands, building, andimprovements actually, irectly an exclusively used forreligious, charitable or educational purposes shall be exemptfrom taxation.'b. I(portant Points to Consider#

1. +est of the tax exemption! the use and notownership of the property

. To be tax-exempt, the property must be actually,

directly and exclusively used for the purposes mentioned.>. The word "exclusively' means "primarily&.8. The exemption is not limited to property actually

indispensable but extends to facilities which are incidental to andreasonably necessary for the accomplishment of said purposes.

?. The constitutional exemption applies only toproperty tax.

/. %owever, it would seem that under existing law,gifts made in favor or religious charitable and educationalorgani#ations would nevertheless Aualify for donor&s gift taxexemption. (Sec. 1B1(3(>3, . Ta! E!e(ptions o Re+enues and Assets, inc%udinrants, endo$(ents, donations or contri)utions to EducationaInstitutions

a. asis# Sec. 8(83 *rt. OI. "Subject to the conditionsprescribed by law, all grants, endowments, donations ocontributions used actually, directly and exclusively foeducational purposes shall be exempt from tax.'b. I(portant Points to Consider#

1. The exemption granted to non-stock, non-profit educationainstitution covers income, property, and donor&s taxes, and customduties.. To be exempt from tax or duty, the revenue, assets, propertyor donation must be used actually, directly and exclusively foeducational purpose.>. In the case or religious and charitable entities and non-proficemeteries, the exemption is limited to property tax.8. The said constitutional provision granting tax exemption tonon-stock, non-profit educational institution is self-executing.?. Tax exemptions, however, of proprietary (for profi teducational institutions reAuire prior legislative implementation. Theirtax exemption is not self-executing.

/. +ands, Huildings, and improvements actually, directly, andexclusively used for educational purposed are exempt from propertytax, whether the educational institution is proprietary or non-profit.

c. "epart(ent o 5inance Order No. 1B&B, dated "ec. 1D1B

The following are some of the highlights of the J90 ordegoverning the tax exemption of non-stock, non-profit educationainstitutions!

1. The tax exemption is not only limited to revenues andassets derived from strictly school operations like income from tuition


11/55


TAXATION

Reviewer

and other miscellaneous feed such as matriculation, library, )9T,etc. fees, but it also extends to incidental income derived fromcanteen, bookstore and dormitory facilities.

. In the case, however, of incidental income, the facilitiesmentioned must not only be owned and operated by the school itselfbut such facilities must be located inside the school campus.anteens operated by mere concessionaires are taxable.

>. Income which is unrelated to school operations like incomefrom bank deposits, trust fund and similar arrangements, royalties,dividends and rental income are taxable.

8. The use of the school&s income or assets must be inconsonance with the purposes for which the school is createdC inshort, use must be school-related, like the grant of scholarships,faculty development, and establishment of professional chairs,school building expansion, library and school facilities.

Other Constitutiona% Pro+isions re%ated to Ta!ation

1. Su)*ect and Tit%e o i%%s


12/55


TAXATION

Reviewer

E!a(p%e#shares of stock may have situs for purposes oftaxation in a state in which they are permanently kept regardless ofthe domicile of the owner, or the state in which he corporation isorgani#ed.

>. Leis%ati+e Po$er to 5i! SitusIf no constitutional provisions are violated, the power of the

legislative to fix situs is undoubted.

E!a(p%e# our law fixes the situs of intangible personalproperty for purposes of the estate and gift taxes. (see Sec. 1,1B NIRC3

Note# In those cases where the situs for certain intangiblesare not categorically spelled out, there is room for applying themobilia rule.

8. "ou)%e Ta!ation and the Situs Li(itation (see later topic3

Criteria in 5i!in Ta! Situs o Su)*ect o Ta!ation

a. Persons@ 5oll tax may be levied upon persons who areresidents of the State.

b. Rea% Propert' @ is subject to taxation in the State in which itis located whether the owner is a resident or non-resident, and istaxable only there.

Ru%e o Le! Rei Sitae

c. Tani)%e Persona% propert'@ taxable in the state where ithas actual situs @ where it is physically located. *lthough the ownerresides in another jurisdiction.

Ru%e o Le! Rei Sitae

d. Intani)%e Persona% Propert' @ situs or personal propertyis the domicile of the owner, in accordance with the principle>7OILIA SE2;;NT;R PERSONA7?, said principle, however, isnot controlling when it is inconsistent with express provisions ofstatute or when justice demands that it should be, as where theproperty has in fact a situs elsewhere. (see Eells 7ar3o 8an v.Collector $5 PDI+ "%; Collector v. 7isher +4!!-, 6anuary, !*-!&

e. Inco(e @ properly exacted from persons who are residentsor citi#ens in the taxing jurisdiction and even those who are neitherresidents nor citi#ens provided the income is derived from sources

within the taxing state.

. usiness, Occupation, and Transaction@ power to levyan excise tax depends upon the place where the business is done, ofthe occupation is engaged in of the transaction not place.

. Gratuitous Transer o Propert'@ transmission of propertyfrom donor to donee, or from a decedent to his heirs may be subjectto taxation in the state where the transferor was a citi#en or resident,or where the property is located.

8. 7u%tip%icit' o Situs

There is multiplicity of situs when the same subject oftaxation, like income or intangible, is subject to taxation in severataxing jurisdictions. This happens due to!

a. ariance in the concept of "domicile' for tax purposesCb. =ultiple distinct relationship that may arise with respect to

intangible personalityC andc. The use to which the property may have been devoted, al

of which may receive the protection of the laws of jurisdiction otherthan the domicile of the owner

Re(ed'@ taxation jurisdiction may provide!a. 6xemption or allowance of deductions or tax credit fo

foreign taxes). 6nter into treaties with other states

"ou)%e Ta!ation

T$o


13/55


TAXATION

Reviewer

F. Ta! Credit an amount subtracted from an individual&s orentity&s tax liability to arrive at the total tax liability

* deduction differ from a tax credit in that a deduction

reduces taxable income while credit reduces tax liability

. E!e(ptions. Treatieswith other StatesJ. Princip%e o Reciprocit'

Constitutiona%it'

Jouble Taxation in its stricter sense is undoubtedlyunconstitutional but that in the broaersense is not necessarily so.Genera% Ru%e# 9ur onstitution does not prohibit double taxationChence, it may not be invoked as a defense against the validity of taxlaws.

a. $here a tax is imposed by the


14/55


TAXATION

Reviewer

A. Ta! E!e(ption @ is a grant of immunity, express or implied, toparticular persons or corporations from the obligations to pay taxes.

. Nature o Ta! E!e(ption1. It is merely a personal privilege of the grantee. It is generally revocable by the government unless the

exemption is founded on a contract which is protected fromimpairment, but the contract must contain the other essentialelements of contracts, such as, for example, a valid cause orconsideration.

>. It implies a waiver on the part of the government of its rightto collect what otherwise would be due to it, and in this sense isprejudicial thereto.

8. It is not necessari ly discriminatory so long as theexemption has a reasonable foundation or rational basis.

C. Rationa%e o ta! E!e(ption5ublic interest would be subserved by the exemption

allowed which the law-making body considers sufficient to offset

monetary loss entailed in the grant of the exemption. (CI vs8othelo #hippin3 Corp., +4!-"", 6une *, !*-$; CI vs PA+,+45*-5, Oct. "!, !*-)&

". Grounds or Ta! E!e(ptions1. =ay be based on a contract in which case, the public

represented by the ;overnment is supposed to receive a fulleAuivalent therefore

. =ay be based on some ground of public policy, such as, forexample, to encourage new and necessary industries.

>. =ay be created in a treaty on grounds of reciprocity or tolessen the rigors of international double or multiple taxation whichoccur where there are many taxing jurisdictions, as in the taxation of

income and intangible personal property

E. E/uit', not a round or Ta! E!e(ptionThere is no tax exemption solely on the ground of eAuity,

but eAuity can be used as a basis for statutory exemption. *t timesthe law authori#es condonation of taxes on eAuitable considerations.(Sec 2/, 22, +ocal ;overnment ode3

5. inds o Ta! E!e(ptions1. *s to )asis

a. Constitutiona% E!e(ptions Immunities from taxationwhich originate from the onstitution

). Statutor' E!e(ptions Those which emanate from

+egislation

F. *s to or(a. E!press E!e(ption $henever expressly granted by

organic or statute of law). I(p%ied E!e(ption 6xist whenever particular persons,

properties or excises are deemed exempt as they fall outside thescope of the taxing provision itself

. *s to e!tenta. Tota% E!e(ption onnotes absolute immunity

). Partia% E!e(ption 9ne where collection of a part of thetax is dispensed with

G. Princip%es Go+ernin the Ta! E!e(ption!. 6xemptions from taxation are highly disfavored by law, and

he who claims an exemption must be able to justify by the clearesgrant of organic or statute of law. (Asiatic Petroleum vs +lanes, *PDI+ --; Collector of Internal evenue vs. /anila 6ocey Club, *)PDI+ -$5&

. %e who claims an exemption must justify that the legislativeintended to exempt him by words too plain to be mistaken. (@isayanCebu 2erminal vs CI, +4!*%"5, 7eb. $, !*-%&

>. %e who claims exemptions should convincingly proved thahe is exempt

8. Tax exemptions must be strictly construed (Phil. Acetylenevs CI, +4!*$5$, Au3. !$, !*-$&

%. Tax 6xemptions are not presumed. (+eala =lectric Co. vsCI, +4!-), Apr. "5, !*-"&

/. onstitutional grants of tax exemptions are self-executing

(Opinion >o. !"5, !*)$, #ec. Of 6ustice&2. Tax exemption are personal.. Jeductions for income tax purposes partake of the nature o

tax exemptions, hence, they are strictly construed against the taxpayer

*. * tax amnesty, much like a tax exemption is never favoredor presumed by law (CI vs CA, G.. >o. !5)%$-, 6an. 5, !***&

1B. The rule of strict construction of tax exemption should not beapplied to organi#ations performing strictly religious, charitable, andeducational functions

8II. Other "octrines in Ta!ation

Prospecti+it' o Ta! La$s

Genera% Ru%e# Taxes must only be imposedprospectively

E!ception# The language of the statute clearly emans or expressthat it shall have a retroactive effect.

Important Points to Consider

!. In order to declare a tax transgressing the due process clauseof the onstitution it must be so harsh and oppressive in itsretroactive application (7ernane' vs 7ernane', ** PDI+*"&

. Tax laws are neither political nor penal in nature they are

deemed laws of the occupied territory rather than the occupyingenemy. (Dilao vs Collector, !55 PDI+ ))&

>. Tax laws not being penal in character, the rule in theonstitution against the passage of the ex post facto laws cannot beinvoked, e!ceptfor the penalty imposed.

I(prescripti)i%it' o Ta!es

Genera% Ru%e# Taxes are imprescriptible

E!ception# $hen provided otherwise by the tax law itself.


15/55


TAXATION

Reviewer

6xample! o.!5!$!, 7eb. , !***&

"octrine o E/uita)%e Recoup(entIt provides that a claim for refund barred by prescription may

be allowed to offset unsettled tax liabilities should be pertinent only totaxes arising from the same transaction on which an overpayment ismade and underpayment is due.

This doctrine, however, was rejected by the Supremeourt, saying that it was not convinced of the wisdom and proprietarythereof, and that it may work to tempt both the collecting agency andthe taxpayer to delay and neglect their respective pursuits of legal

action within the period set by law. (Collector vs


16/55


TAXATION

Reviewer

Rule of No stoppel !"ainst the #overnment$

It is a settled rule of law that in the performance of its

governmental functions, the state cannot be estopped by the neglect

of its agents and officers. o. !!$*), - 7eb !**$ thatlike other principles oflaw, the non-application of estoppel to the government admits ofex(eptions in the interest of )usti(e and fair play* as wherein)usti(e will result to the taxpayer.

Estoppe% Aainst the Ta!pa'er

$hile the principle of estoppel may not be invoked againstthe government, this is not necessarily true in case of the taxpayer. InCI vs. #uyac, !5 Phil )!* , the taxpayer made several reAuests forthe reinvestigation of its tax liabilities such that the government,acceding to the taxpayers reAuest, postponed the collection of itsliability. The taxpayer cannot later on be permitted to raise thedefense of prescription inasmuch as his previous reAuests forreinvestigation have the effect of placing him in estoppel.

Nature and +inds of !ssessments

!n assessment is the offi(ial a(tion of anadministrative offi(er determinin" the amount of tax due from ataxpayer* or it may be the noti(e to the effe(t that the amounttherein stated is due from the taxpayer that the payment of thetax or defi(ien(y stated therein. (8isaya +an 2ransportation Co.vs CI, !5% Phil !"")&

C%assiications#

a. Se%&assess(ent& Tax is assessed by the taxpayehimself. The amount is reflected in the tax return thatis filed by him and the tax is paid at the time he fileshis return. (#ec. %- AJ K!J, !**$ >IC&

). "eicienc' Assess(ent- This is an assessmenmade by the tax assessor whereby the correct amounof the tax is determined after an examination oinvestigation is conducted. The liability is determinedand isC therefore, assessed for the following reasons!

1. The amount ascertained exceeds that whichis shown as tax by the taxpayer in his return

. . The taxpayer did not file any return at all

(#ec. %- 8J J!J an J !**$ >IC&

(. I %%ea% and 8oid Assess(ents& This is anassessment wherein the tax assessor has no power toact at all (@ictorias /illin3 vs. C2A, +4!", !" /ar!*-)&

d. Erroneous Assess(ent This is an assessmenwherein the assessor has the power to assess buerrs in the exercise of that power (Ibid.3

Princip%es Go+ernin Ta! Assess(ents

1.!ssessments are prima fa(ie presumed (orre(t andmade in "ood faith.

The taxpayer has the duty of proving otherwise

(Interprovincial Autobus vs. CI, *) Phil *5& In the absence of any proof of any irregularities in the

performance of official duties, an assessment will notbe disturbed. (#y Po. @s. C2A, G.. >o )!-, ) Au3!*))

*ll presumptions are in favor of tax assessments

(9ayrit vs. Cru', +4"**!5, - #ept. !*))& 0ailure to present proof of error in the assessment wil

justify judicial affirmation of said assessments. (CIvs C.C. G.. >o. !5!%! an !5%%-", !5 /ar !**%&

* party challenging an appraiser&s finding of value is

reAuired to prove not only that the appraised value iserroneous but also what the proper value is (Caltexvs. C.C. G.. >o. !5$)!, !5 6uly !**)&

. *ssessments should not be based on presumptions nomatter how logical the presumption might be. In order to standthe test of judicial scrutiny it must be based on a(tual fa(ts.

>. *ssessment is discretionary on the part of theommissioner. Mandamus will not lie to (ompel him toassess a tax after investi"ation if he finds no "round toassess. Mandamus to (ompel the Commissioner to assesswill result in the en(roa(hment on exe(utive fun(tions


17/55


TAXATION

Reviewer

,/eralco #ecuirities Corp. vs. #avellano, +4"-!)! an +4"-$)," Oct !**&.

=xceptL

%he -IR Commissioner may be (ompelled to assessby mandamus if in the exer(ise of his dis(retion there iseviden(e of arbitrariness and "rave abuse of dis(retion asto "o beyond statutory authority,/acea vs. /acarai3, G..>o. ))*, ) 6une !**".

8. The authority vested in the ommissioner to assess taxesmay be delegated.!n assessment si"ned by an employeefor and in behalf of the Commissioner of Internal Revenueis valid. /owever* it is settled that the power to ma&e finalassessments (annot be dele"ated. %he person to whom aduty is dele"ated (annot lawfully dele"ate that duty to

another. ,City +umber vs. 9omin3o, +4!)-!!, "5 6an !*-&.

?. *ssessments must be directed to the right party. /en(e* iffor example* the taxpayer bein" assessed is an estate of ade(edent* the administrator should be the party to whomthe assessment should be sent,epublic vs. ela ama, +4

!!5), * >ov. !*--&* and not the heirs of the de(edent

7eans E(p%o'ed in the Assess(ent o Ta!es

A. E!a(ination o Returns# Confidentiality Rule

The Tax ode reAuires that after the return is filed, theommissioner or his duly authori#ed representative shall examinethe same and assess the correct amount of tax. The tax or thedeficiency of the tax so assessed shall be paid upon notice anddemand from the ommissioner or from his duly authori#edrepresentative. *ny return, statement or declaration filed in any officeauthori#ed to receive the same shall not be withdrawn. %owever,

within three (>3 days from the date of such filing, the same may bemodified, changed or amended, provided that no notice for audit orinvestigation of such return, statement or declaration has in themeantime been actually served upon the taxpayer. (#ec -AJ, !**$>IC&

*lthough Sec. 21 of the 12 . $hen the production of the tax return is materiaevidence in a criminal case wherein the ;overnmenis interested in the result. (Cu


18/55


TAXATION

Reviewer

C. Inventory1%a&in"* Surveillan(e and Presumptive #ross Salesand Re(eipts

The ommissioner is authori#ed at any time during the taxableyear to order the inventory-taking of goods of any taxpayer as a

basis for assessment.

If there is reason to believe that a person is not declaringhis correct income, sales or receipts for internal revenue taxpurposes, his business operation may be placed under observationor surveillance. The finding made in the surveillance may be used asa basis for assessing the taxes for the other months or Auarters ofthe same or different taxable years. (#ec. - CJ, !**$ >IC&

2. %ermination of %axable Period

The ommissioner shall declare the tax period of a taxpayerterminated at any time when it shall come to his knowledge!

a. That the taxpayer is retiring from business subject totaxC

b. That he intends to leave the 5hilippines or remove hisproperty therefromC

c. That the taxpayer hides or conceals his propertyC ord. That he performs any act tending to obstruct the

proceedings for the collection of the tax for the past orcurrent Auarter or year or to render the same totally orpartly ineffective unless such proceedings are begunimmediately.

The written decision to terminate the tax period shall beaccompanied with a reAuest for the immediate payment of the tax forthe period so declared terminated and the tax for the preceding yearor Auarter, or such portion thereof as may be unpaid. Said taxes shallbe due and payable immediately and shall be subject to all thepenalties prescribed unless paid within the time fixed in the demandmade by the ommissioner (#ec. - J, !**$ >IC3

E. 5i!in o Rea% Propert' 8a%ues

0or purposes of computing any internal revenue tax, thevalue of the property shall be whichever is the higher of ! (13 the fairmarket value as determined by the ommissionerC or (3 the fairmarket value as shown in the schedule of values of the 5rovincialand ity *ssessors for real tax purposes (#ec - =J, !**$ >IC&.

5. In/uir' into an0 "eposits

6xamination of bank deposits enables the ommissioner to

assess the correct tax liabilities of taxpayers. %owever, bank deposits

are confidential under ).*. 18B?. IC&.

Net -orth 7ethod in In+estiation

The basis of using the


19/55


TAXATION

Reviewer

=oreover, Sec. /4H7, 12 . losses from sales or exchanges of property

between members of the familyC

8. income taxes paidC

?. estate, inheritance and gift taxesC

/. other non-deductible taxesC

2. election expenses and other expenses

against public policyC


20/55


TAXATION

Reviewer

. non-deductible contributionsC

. gifts to othersC

1B. net capital loss, and the like

9n the other hand, non-taxable items should bededucted therefrom. These items are necessary

adjustments to avoid the inclusion of what otherwise

are non-taxable receipts. They are!

1. inheritance, gifts and beAuests receivedC

. non-taxable capital gainsC

>. compensation for injuries or sicknessC

8. proceeds of life insurance policiesC

?. sweepstakes winningsC

/. interest on government securities and the

like

Increase in net worth are not taxable if they

are shown not to be the result of unreported income

but to be the result of the correction of errors in the

taxpayer&s entries in the books relating to

indebtedness to certain creditors, erroneously listed

although already paid. (7ernane' Dermanos Inc. vs.

CI, +4!%%!, "5 #ept. !*-*&

Enorce(ent o 5oreitures and Pena%ties

Statutor' Oenses and Pena%ties

1. Additions to the Ta!

*dditions to the tax are increments to the basic

tax incident due to the taxpayer&s non-compliance with

certain legal reAuirements, like the taxpayer&s refusal or

failure to pay taxes andKor other violations of taxing

provisions.

*dditions to the tax consist of the!

(13 civil penalty, otherwise known as surchar3e

which may either be ?N or ?B N of the tax depending

upon the nature of the violationC

(3 interest either for a deficiency tax o

delinAuency as to paymentC

(>3 other civil penalties or administrative fines

such as for failure to file certain information returns and

violations committed by withholding agents. (#ecs. $ to

%, !**$ >IC&

Genera% Considerations on the Addition to ta!

a. *dditions to the tax or deficiency tax apply to

all taxes, fees, and charges imposed in the Tax ode.

b. The amount so added to the tax shall be

collected at the same time, in the same manner, and as

part of the tax.

c. If the withholding agent is the government or

any of its agencies, polit ical subdivisions o

instrumentalities, or a government owned or controlledcorporation, the employee thereof responsible for the

withholding and remittance of the tax shall be personally

liable for the additions to the tax prescribed (#ec. $bJ

!**$ >IC& such as the ?N surcharge and the BN

interest per annum on the delinAuency (#ecs. ) an

* CJ, !**$ >IC&

Surchare

The payment of the surcharge is manatory and

the ommissioner of Internal )evenue is not vested with

any authority to waive or dispense with the collection

thereof. In one case, the Supreme ourt held that the fac

that on account of riots directed against the hinese on

certain dates, they were prevented from paying thei

internal revenue taxes on time, does not authori#e the

ommissioner to extend the time prescribed for the


21/55


TAXATION

Reviewer

payment of taxes or to accept them without the additional

penalty (+im Co Chui vs. Posaas, $ Phil -5&

The ommissioner is not vested with any

authority to waive or dispense with the collection therof.

(CI vs. CA, supra&. The penalty and interest are not penal

but compensatory for the concomitant use of the funds by

the taxpayer beyond the date when he is supposed to have

paid them to the ;overnment.(Philippine efinin3

Company vs. C.A., G.. >o. !!))$*, ) /ay !**-&.

*n extension of time to pay taxes granted by the

ommissioner does not excuse payment of the surcharge

(CI vs. Cu 3 * deficiency tax, or any surcharge or interes

thereon on the due date appearing in the

notice and demand of the ommissioner.

. Interest on E!tended Pa'(ent

Imposed when a person reAuired to pay the tax is Aualified

and elects to pay the tax on installment under the provisions of the

ode, but fails to pay the tax or any installment thereof, or any part o

such amount or installment on or before the date prescribed for its

payment, or where the ommissioner has authori#ed an extension o

time within which to pay a tax or a deficiency tax or any part thereof.

(#ec. *J, !**$ >IC&


22/55


TAXATION

Reviewer

Ad(inistrati+e Oenses

1. 0ailure to 0ile ertain Information )eturns

. 0ailure of a $ithholding *gent to ollect and )emit

Taxes

>. 0ailure of a $ithholding *gent to )efund 6xcess

$ithholding Tax

Sources o re+enues#1. Income tax. 6state Tax and dono&r tax>. *T8. 9ther percentage taxes?. 6xcise tax/. Jocumentary stamp taxes2. 9ther as imposed and provided by HI)

)6=6JI6S 90 T%6 ;96). Sale at public auction to highest bidder8. Jisposition of proceeds of the sale.

$ho may effect distraint *mount Involved

1. commissioner or his dueauthori#ed representative

. )J9

In excess of51,BBB,BBB.BB51,BBB,BBB.BB or

less

%ow *ctual Jistraint 6ffected

1. In case of Tangible 5roperty!

a. opy of an account of the property distrainedsigned by the officer, left either with the owner orperson from whom property was taken, at thedwelling or place of business and with someoneof suitable age and discretion


23/55


TAXATION

Reviewer

b. Statement of the sum demanded.c. Time and place of sale.

. In case of intangible property!

a. Stocks and other securitiesServing a copy of the warrant upon

taxpayer and upon president, manager, treasureror other responsible officer of the issuingcorporation, company or association.

b. Jebts and credits1. +eaving a copy of the warrant with the

person owing the debts or having in hispossession such credits or his agent.

. $arrant shall be sufficient authority for suchperson to pay I) his credits or debts.

c. Hank *ccounts @ garnishment1. Serve warrant upon taxpayer and president,

manager, treasurer or responsible officer ofthe bank.

. Hank shall turn over to I) so much of thebank accounts as may be sufficient.

%ow constructive Jistraint 6ffected

1. )eAuire taxpayer or person in possession toa. Sign a receipt covering property distrainedb. 9bligate him to preserve the same properties.c. 5rohibit him from disposing the property from

disposing the property in any manner, with outthe authority of the I).

. $here Taxpayer or person in possession refuses to sign!a. 9fficer shall prepare list of the property

distrained.b. In the presence of two witnesses of sufficient age

and discretion, leave a copy in the premiseswhere property is located.

;rounds of onstructive Jistraint

1. Taxpayer is retiring from any business subject to tax.. Taxpayer is intending to leave the 5hilippinesC or>. To remove his property there from.

8. Taxpayer hides or conceals his property.?. Taxpayer acts tending to obstruct collection proceedings.

. $hen the amount of the bid for the property under distrainis not eAual to the amount of the tax or is very much lessthan the actual market value of articles, the I) or hisdeputy may purchase the distrained property on behalf othe national government.

+evy of )eal 5roperty

+evy @ *ct of sei#ure of real property in order to enforce thepayment of taxes. The property may be sold at public saleif after sei#ureC the taxes are not voluntarily paid.

The reAuisites are the same as that of distraint.

5rocedure!

1. International )evenue off icer shall prepare a dulyauthenticated certificate showing

a. . Service of written notice to!

a. The taxpayer, andb. )J where property is located.

8. *dvertisement of the time and place of sale.?. Sale at public auction to highest bidder./. Jisposition of proceeds of sale.

The excess shall be turned over to owner.

)edemption of property sold or forfeited

a. 5erson entitled! Taxpayer or anyone for himb. Time to redeem! one year from date of sale or forfeiture

- Hegins from registration of the deed of sale odeclaration of forfeiture.

- annot be extended by the courts.c. 5ossession pending redemption @ owner not deprived o

possessiond. 5rice! *mount of taxes, penalties and interest thereon from

date of delinAuency to the date of sale together with

interest on said purchase price at 1?N per annum fromdate of purchase to date of redemption.

Jistraint and +evy compared

1. Hoth are summary remedies for collection of taxes.. Hoth cannot be availed of where amount involved is no

more than 51BB.>. Jistraint @ personal property

+evy @ real property


24/55


TAXATION

Reviewer

8. Jistraint @ forfeiture by government, not provided+evy @ forfeiture by government authori#ed where there isno bidder or the highest bid is not sufficient to pay thetaxes, penalties and costs.

?. Jistraint @ Taxpayer no given the right of redemption+evy @ Taxpayer can redeem properties levied upon andsoldKforfeited to the government.

. 0ailure to file notice of such lien in the office of register of

Jeeds, purchases or judgment creditor.8. Jestruction of the property subject to the lien.

In case and 8, the taxpayer is stillliable.

6nforcement of Tax +ien vs. Jistraint* tax lien is distinguished from disttraint in that, in distraint

the property sei#ed must be that of the taxpayer, although it need notbe the property in respect to the tax is assessed. Tax lien is directedto the property subject to the tax, regardless of its owner.

. There must be acceptance of the offer in settlement of the

original claim.

$hen taxes may be compromised!

1. * reasonable doubt as to the validity if the claim against thetaxpayer existsC

. The financial position of the taxpayer demonstrates a cleainability to pay the assessed tax.

>. riminal violations, except!a. Those already filed in courtb. Those involving fraud.

+imitations!

1. =inimum compromise rate!

a. 1BN of the basic tax assessed @ in case ofinancial incapacity.

b. 8BN of basic tax assessed @ other cases.. Subject to approval of 6valuation Hoard

a. $hen basic tax involved exceeds 51,BBB,BBB.BBor

b. $here sett lement offered is less than theprescribed minimum rates.

Jelegation of 5ower to ompromise

;)! The power to compromise or abate shall not be delegated bythe commissioner.

6! The )egional 6valuation Hoard may compromise the assessmenissued by the regional offices involving basic taxes of 5 ?BB D orless.

)emedy in case of failure to comply!The I) may either!

1. enforce the compromise, or. )egard it as rescinded and insists upon the origina

demand.

ompromise 5enalty


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TAXATION

Reviewer

1. It is a certain amount of money which the taxpayer pays tocompromise a tax violation.

. It is pain in lieu of a criminal prosecution.>. Since it is voluntary in character, the same may be

collected only if the taxpayer is willing to pay them.

6nforcement of forfeiture

0orfeiture! Implies a divestiture of property with out compensation, inconseAuence of a default or offense.

Includes the idea of not only losing but also having theproperty transferred to another with out the consent of the owner and

wrongdoer.

1. 6ffect! Transfer the title to the specific thing from theowner to the government.

. $hen available!a. . %ow enforced!

a. In case of personal property @ by sei#ure andsale or destruction of the specific forfeitedproperty.

b. In case of real property @ by a judgment ofcondemnation and sale in a legal action orproceeding, civil or criminal, as the case mayreAuire.

8. $hen forfeited property to be destroyed or sold!a. To be destroyed @ by order of the I) when the

sale for consumption or use of the followingwould be injurious to the public health orprejudicial to the enforcement of the law! (atleast B days after sei#ure3

1. distilled spirits. liAuors>. cigars8. cigarettes, and other manufactured

products of tobacco?. playing cards/. *ll apparatus used in or about the illicit

production of such articles.b. To be sold or destroyed @ depends upon the

discretion of I)1. *ll other articles subject to exercisetax, (wine, automobile, mineralproducts, manufactured oils,miscellaneous products, non-essentialitems a petroleum products3manufactured or removed in violationof the Tax ode.

. Jies for printing or making I) stamps,labels and tags, in imitation of orpurport to be lawful stamps, labels ortags.

?. $here to be sole!a. 5ublic sale! provided, there is notice of not less

than B days.b. 5rivate sale! provided, it is with the approval o

the Secretary of 0inance./. )ight of )edemption!

a. 5ersonal entitled @ taxpayer or anyone for himb. Time to redeem @ with in one (13 year from

forfeiturec. *mount to be paid @ full amount of the taxes and

penalties, plus interest and cost of the saled. To whom paid @ ommissioner or the )evenue

ollection 9fficere. 6ffect of failure to redeem @ forfeiture shal

become absolute.2. . ;iving reward to informers @ Sum eAuivalent to1BN of revenues, surcharges or fees recoveredandKor fine or penalty imposed and collected o51, BBB,BBB.BB per case, whichever is lower.

8. Imposition of surcharge and interest.?. =aking arrest, search and sei#ure

+imited to violations of any penal law oregulation administered by the HI), committed

with in the view of the Internal )evenue 9fficer o66.

/. Jeportation in case of aliens @ on the followinggrounds

a. Dnowingly and fraudulently evades

payment of I) taxes.b. $illfully refuses to pay such tax and itsaccessory penalties, after decision onhis tax liability shall have become finaand executory.

2. Inspection of booksHooks of accounts and other accounting

records of taxpayer must be preserved, generallywithin three years after date the tax return wasdue or was filed whichever is later.

. Mse of


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TAXATION

Reviewer

. 9btaining information on tax liability of anyperson

1B. Inventory @ Taking of stock-in-trade and makingsurveillance.

11. 5rescribing presumptive gross sales or receipt!a. 5erson failed to issue receipts and

invoicesb. )eason to believe that records do not

correctly reflect declaration in return.1. 5rescribing real property values1>. InAuiring into bank deposit accounts of

a. * deceased person to determine grossestate

b. *ny taxpayer who filed application forcompromise by reasons of financialincapacity his tax l iability.

18. )egistration of Taxpayers.

Eudicial )emedies

ivil and riminal *ctions!1. Hrought in the name of the ;overnment of the

5hilippines.. onducted by +egal 9fficer of HI)>. =ust be with the approval of the I), in case of

action, for recovery of taxes, or enforcement of afine, penalty or forfeiture.

*. ivi l *ction*ctions instituted by the government to collect

internal revenue taxes in regular courts ()T or =Ts,depending on the amount involved3

$hen assessment made has become final and

executory for failure or taxpayer to!a. Jispute same by filing protest with I)b. *ppeal adverse decision of I) to T*

H. riminal *ction* direct mode of collection of taxes, the judgment

of which shall not only impose the penalty but also orderpayment of taxes.

*n assessment of a tax deficiency is notnecessary to a criminal prosecution for tax evasion,provided there is a prima facie showing of willful attempt toevade.

6ffect of *cAuittal on Tax +iability!

Joes not exonerate taxpayer his civil liability to pay the taxdue. Thus, the government may still collect the tax in the sameaction.)eason! Tax is an obligation, does not arise from a criminal act.

6ffect of Satisfaction of Tax +iability on riminal +iability

$ill not operate to extinguish taxpayer&s criminal liabilitysince the duty to pay the tax is imposed by statute, independent ofany attempt on past of taxpayers to evade payment.

This is true in case the criminal action is based on the acto taxpayer of filing a false and fraudulent tax return and failure topay the tax.

3 years after the last day prescribed by law forthe filing of the return or from the day the return wasfiled, in case it is filed beyond the period prescribedthereof. (Section B> of the Tax ode3

B123

*n affidavit executed by a revenue office indicating the tax

liabilities of a taxpayer and attached to a criminal complainfor tax evasion, cannot be deemed an assessment. ( I)vs. 5ascoi )ealty orp. Eune , 13

* transcript sheets are not returns, because they do not

contain information necessary and reAuired to permit thecomputation and assessment of taxes (Sinforo *lca vsommissioner, Jec. , 1/83

H.3 6xceptions! (Sec. ic3

1. $here no return was filed - within ten (1B3 years after thedate of discovery of the omission.

. $here a return was filed but the same was false ofraudulent @ within ten (1B3 years from the discovery ofalsity or fraud.


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TAXATION

Reviewer

, 1283

c. * fraud assessment which has become final andexecutory, the fact of fraud shall be judiciallytaken cogni#ance of in the civil or criminal actionfor the collection thereof. (Sec. paragraph(a33

0raud may be established by the following ! (Hadges of

0raud3a. Intentional and substantial understatement of tax

liability of the taxpayer.b. Intentional and substantial overstatement of

deductions of exemptionc. )ecurrence of the foregoing circumstances.

InstancesKircumstances negating fraud!

a. $hen the ommissioner fails impute fraud in theassessment noticeKdemand for payment.

b. $hen the ommissioner failed to allege in hisanswer to the taxpayer&s petition for review whenthe case is appealed to the T*.

c. $hen the ommissioner raised the Auestion offraud only for the first time in his memorandum

which was filed the T* after he had rested hiscase.

d. $here the HI) itself appeared, "not sure' as tothe real amount of the taxpayer&s net income.

e. * mere understatement of income does not provefraud, unless there is a sufficient evidenceshaving fraudulent intent.

>. $here the commissioner and the taxpayer, before theexpiration of the three (>3 year period of limitation haveagree in writing to the extension of said period.

-year limitation signed by the taxpayer.

. *ssessment of unpaid taxes, where the bases of which isnot reAuired by law to be reported in a return such as excisetaxes. (armen vs. *yala Securities orp., years afterthe return was due or was filed, whichever islater.

H. 6xceptions!1. $here a fraudulentKfalse return with intent to

evade taxes was filed a proceeding in court fothe collection of the tax may be filed withouassessment, at anytime within ten years after thediscovery of the falsity or fraud.

years3

would apply ()ep. vs. )et., =arch >1, 1/3


28/55


TAXATION

Reviewer

. $hen the taxpayer omits to file a return @ a courtproceeding for the collection of such tax may befiled without assessment, at anytime within 1Byears after the discovery of the omission.

>. $aiver of statute of limitations @ any internalrevenue tax, which has been assessed within theperiod agreed upon, may be collected be distinctor levy of by a proceeding in court within theperiod agreed upon in writing before theexpiration of ?-year period.

B,1/>3

?. $here the assessment is revised because of anamended return @ the period for collection iscounted from the last revised assessment.

/. $here a tax obligation is secured by a suretybond @ the government may proceed thru a courtaction to forfeit a bond and enforce suchcontractual obligation within a period of tenyears.

2. $here the action is brought to enforce acompromise entered into between thecommission and the taxpayer @ the prescriptiveperiod is ten years.

. $hen tax is deemed collected for purposes of theprescriptive period.

1. ollection by summary remedies @ It is effected bysummary methods when the government avail ofdistraint and levy procedure.

. ollection by judicial action @ The collection begins byfiling the complaint with the proper court. ()T3

>. $here assessment of the commissioner is protectedQ appealed to the T* @ the collection begin when thegovernment file its answer to taxpayer&s petition foreview.

III. )ules of 5rescription In riminal ases

*. )ule! *ll violations of any provision of the tax code shaprescribe after five (?3 years.


29/55


TAXATION

Reviewer

The commissioner is prevented fromfiling an ordinary action to collect thetax.

$hen T* suspends the collection of

tax liability of the taxpayer pursuant toSection 11 of )* 11? upon proof thatits collection may jeopardi#es thegovernment and Kor the taxpayer.

b. $hen the taxpayer reAuests forreinvestigation which is granted bycommissioner.

. In criminal cases for violation of tax code @ theperiod shall not run when the offender is absentfrom the 5hilippines.


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TAXATION

Reviewer

Issuance of Assessment

5rocedure

Issuance of written a 5reliminary *ssessment o. !4** ate #ept. -, !***&.

"isputed Assess(ent

Taxpayer or his duly authori#ed representative may

administratively protest against a 0ormal +etter of Jemand and

*ssessment notice within thirty (>B3 days from date of receipt thereof

If the protest is denied in whole or part, or is not acted upon

within one hundred eighty (1B3 days from submission of documents

the taxpayer adversely affected by the decision or inaction may

appeal to the T* within >B days from receipt of the said decision, or

from lapse of the one hundred (1B3-day period! otherwise, the

decision shall become final and executory

#everal issues in the assessment notice but taxpayer only

isputesMprotests valiity of some of the issues

Taxpayer reAuired to pay the deficiency tax or taxes

attributable to the undisputed issues.

ollection letter to be issued calling for the payment o

deficiency tax, including applicable surcharge andKointerest.


31/55


TAXATION

Reviewer

0ailure of taxpayer to state the facts, the applicable law, rules and

regulations, or jurisprudence on which his protest is based shall

render his protest void and without force and effect.

ContentsL

a. B-day period, the assessment can

no longer be disputed either administratively or judicially

through an appeal in the T*.

*ssessed already tax collectible.

+e3al 8asis

+egal 5rinciple of Auasi-contracts or solutio inebiti (see

*rt. 18 Q 1?8 of the ivil ode3. The ;overnment is within the

scope of the principle of solutio inebiti(I) vs. 0ireman&s 0und

Insurance o3

#cope of Claims

Mnder Sec. B8 and B of the 12 ecessity of Proof for efun Claims

)efund claim partakes of the nature of an exemption which

cannot be allowed unless granted in the most explicit and

categorical language. (CI vs. 6ohnson an #ons

0ailure to discharge burden of giving proof is fatal to claim


32/55


TAXATION

Reviewer

It must be shown that payment was an independent single

act of voluntary payment of a tax believed to be due,

collectible and accepted by the government, and which

therefore, become part of the state moneys subject to

expenditure and perhaps already spent or appropriated

(CI vs. +i ao, +4!!)$%, 9ec. ), !*-"&.

#tatutory euirements for efun

Claims

a. -ritten c%ai( or reund or ta!

credit i%ed )' the ta!pa'er $ith the

Co((issioner

This reAuirement is

(andator'. )easons# (a3 to afford the commissioner an opportunity to

correct the action of subordinate officer and (b3 to notify the

government that the taxes sought to be refunded are under

Auestion and that, therefore, such notice should then be

borne in mind in estimating the revenue available for

expenditure (8ermeBo vs. CI )$ Phil *-&.

6xcept! Tax credit or tax refund where on the face of the

return upon which payment is made, such payment

appears clearly to have been erroneous. (#ec. *, !**$

>IC&.

). Cateorica% de(and or rei()urse(ent

c. C%ai( or reund or ta! credit (ust )e i%ed or the suit

proceedin thereo (ust )e co((enced in court $ithin t$o IC&

)eAuirement a condition precedent and non-compliance

therewith bars recovery (Phil. Acetylene Co. Inc, vs.

Commissioner, C2A Case >o. !"!, >ov. $, !*-&.

)efers not only to the "administrative' claim that the

taxpayer should file within years from date of payments

with the HI), but also the judicial claim or the action for

refund the taxpayer should commence with the T* (see

Gibbs vs.. Collector of Internal evenue, !5$ Phil "&.

Taxpayer may file an action for refund in the T* even

before the ommissioner decides his pending claim in the

HI) (Commissioner of Internal evenue vs. Palanca 6r., +4

!---, Oct. *, !*--&.

Suspension of the -yaer prescriptive period may be had

when!

(13 there is a pending litigation between the two

parties (government and taxpayer3 as to the proper

tax to be paid and of the

proper interpretation of

the taxpayer&s charter in

relation to the disputed

taxC and

(3 the commissioner in

that litigated case agreed

to abide by the decision

of the Supreme ourt as

to the collection of taxesrelative thereto (Panay =lectric Co., Inc. vs. Collector

of Internal evenue !5" Phil. )!*&

6ven if the -year period has lapsed the same is no

jurisdictional and may be suspended for reasons of eAuity

and other special circumstances. (CI vs. Phil. American

+ife Ins. Co., G.. >o. !5%5), /ay *, !**%&.

-year prescriptive period for filing of tax refund or credit

claim computed from date of payment of tax of penalty

except in the following!

orporations

-year prescriptive period for overpaid Auarterly

income tax is counted not from the date the corporation

files its Auarterly income tax return, but from the date the

final adjusted return is filed after the taxable year

(Commissioner of Internal evenue vs. 2/? #ales, Inc.,

G.. >o. )"$"-, 6an. !%, !**&.

Taxes payable in installment

-year period is counted form the payment of the last

installment (CI vs Palanca, 6r., supra&

$ithholding Taxes

5rescriptive period counted not from the date the tax

is withheld and remitted to the HI), but from the end of the

taxable year (Gibbs vs. Commissioner of Internal evenue

supra&

TAX RE5;N" TAX CRE"IT

There is actually a

reimbursement of the tax

The government issues a taxcredit memo covering theamount determined to bereimbursable which can beapplied after properverification, against any sumthat may be due andcollectible form the taxpayer


33/55


TAXATION

Reviewer

*T )egistered 5erson whose sales are #ero-rated or effectively

#ero-rated

-year period computed from the end of the taxable

Auarter when the sales transactions were made (#ec. !!

(A& !**$ >IC&.

Interest on 2ax efun

The ;overnment cannot be reAuired to pay interest on

taxes refunded to the taxpayer unless!

1. The Co((issioner acted $ith patent ar)itrariness

*rbitrariness presupposes inexcusable or obstinatedisregard of legal provisions (CI vs. @ictorias /illin3 Corp., Inc. +4

!*-5$, >ov. *, !*--&.

F. In case o Inco(e Ta! $ithhe%d on the $aes o

e(p%o'ees.

*ny excess of the taxes withheld over the tax due from the

taxpayer shall be returned or credited within > months from the

fifteenth (1?th3 day of *pril. )efund or credit after such time earn

interest at the rate of /Nper annum, starting after the lapse of the >-

month period to the date the reund or credit is made ( #ec $* (c& (&

!**$ >IC&

APPEAL to the CTA

*dverse decision or ruling rendered by the ommissioner

of Internal )evenue in disputed assessment or claim for tax

refund or credit, taxpayer may appeal the same within thirty

(>B3 days after receipt. (Sec. 11, ).*. B days from notice. %ence, it

could not become final and executory. ()epublic vs. Je la

)ama, 1 S)* /13

=otion for reconsideration suspends the running of the >B

@day period of perfecting an appeal. =ust advance new

grounds not previously alleged to toll the reglementary

periodC otherwise, it would be merely pro forma. ()oman

atholic *rchbishop vs. oll., +-1//>, Ean. >1, 1/3.

)eAuirements for *ppeal in Jisputed *ssessment

a. Tax assessed has not been paidC

b. Taxpayer has filed with the ommissioner of Interna

)evenue a petition for the reconsideration o

cancellation of the assessmentC

c. 0inal decision or ruling has been rendered on such

petitionC

d. Suit or proceeding in the T* is made within >B days

from receipt of the decision

6ffect of 0ailure to *ppeal *ssessment

a. Taxpayer barred, in an action for collection of the tax

by the government, from using defense of excessive

or illegal assessment.

b. *ssessment is considered correct.

)eAuirements for *ppeal in )efund and Tax redit

a. Tax has been paidCb. Taxpayer has filed with the I) a written claim fo

refund or tax credit within years from payment of the

tax or penaltyC and

c. Suit or proceeding is instituted in the T* also within

the same prescriptive period of two years from the

date of payment regardless of any supervening cause

(see Secs. B8, 12


34/55


TAXATION

Reviewer

b. *fter the sale and within / months to recover the net

proceeds reali#ed at the sale (see. Sec. >1, 12


35/55


TAXATION

Reviewer

. Sa%e o Propert'

5roperty in the customs custody shall be subject tosale under the following conditionsC

a. abandoned articlesC

b. articles entered under warehousing entrynot withdrawn nor the duties and taxespaid thereon within the period providedunder Section 1B, TC

c. sei#ed property, other than contraband, afterliability to sale shall have been establishedby proper administrative or judicialproceedings in conformity with the provisionof this code! and

d. *ny articles subject to a valid lien forcustoms duties, taxes or other chargescollectible by the Hureau of ustoms, afterthe expiration of the period allowed for thesatisfaction of the same.


36/55


TAXATION

Reviewer

8. ompromise

?. 0orfeiture

/. 9ther *dministrative )emedies

6uicial

2. ivil *ction

. riminal *ction

"istraint o Persona% Propert'

"istraint- Sei#ure by the government of personal property,tangible or intangible, to enforce the payment of faces, to be followedby its public sale, if the taxes are not voluntarily paid.

c. *ctual @ There is taking of possession of personal propertyout of the taxpayer into that of the government. In case ofintangible property. Taxpayer is also diverted of the powerof control over the propertyC

d. onstructive @ The owner is merely prohibited fromdisposing of his personal property.

*ctual Jistraint. onstructive Jistraint

=ade on the property only of adelinAuent taxpayer.

=ay be made on the propertyof any taxpayer whether

delinAuent or not

There is actual taking or

possession of the property.

Taxpayer is merely prohibited

from disposing of his property.6ffected by having a list of thedistraint property or by service

or warrant of distraint orgarnishment.

6ffected by reAuiring thetaxpayer to sign a receipt ofthe property or by leaving a

list of same

*n immediate step for collectionof taxes where amount due is

definite.

Such immediate step is notnecessaryC tax due may not

be definite or it is beingAuestioned.

Re/uisites#

?. Taxpayer is delinAuent in the payment of tax.

/. SubseAuent demand for its payment.

2. Taxpayer must fail to pay delinAuent tax at time reAuired.

. 5eriod with in to assess or collect has not yet prescribed. Incase of constructive distraint, reAuisite no. 1 is notessential (see Sec. B/ T3

-hen re(ed' not a+ai%a)%e#

$here amount involved does not exceed 51BB (Sec. B?T3. In keeping with the provision on the abatement of the collectionof tax as the cost of same might even be more than 51BB.

Procedure#

?. Service of warrant of distraint upon taxpayer or uponperson in possession of taxpayer&s personal property.

/. 5osting of notice is not less than two places in themunicipality or city and notice to the taxpayer specifyingtime and place of sale and the articles distrained.

2. Sale at public auction to highest bidder

. Jisposition of proceeds of the sale.

$ho may effect distraint *mount Involved

>. commissioner or his dueauthori#ed representative

8. )J9

In excess of51,BBB,BBB.BB51,BBB,BBB.BB orless

Ho$ Actua% "istraint Eected

>. In case of Tangible 5roperty!

a. opy of an account of the property distrainedsigned by the officer, left either with the owner orperson from whom property was taken, at thedwelling or place of business and with someoneof suitable age and discretion

b. Statement of the sum demanded.

c. Time

Tax referrence

Documents

Transcript of Tax referrence