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TAXPAYER'S REMEDIES

The Assessment CycleTAXPAYER'S REMEDIES 1 . Incur Tax Liability 2 . Filing of Return 3 . Pre-Audit Investigation

1.

Incur Tax Liability

2.

Filing of Return

3.

Pre-Audit Investigation

4.

Audit

5.

Informal Conference (IC)

6.

Preliminary Assessment Notice (PAN)

7.

Reply to PAN

8.

Final Assessment Notice (FAN)

9.

Protest

10.

Supplemental Protest

11.

Decision on Protest

12.

Petition for Review in CTA Division

13.

Appeal to CTA en banc

14.

Appeal to SC

The Assessment Cycle13 . Appeal to CTA en banc 14 . Appeal to SC 1 . Incur Tax

1. Incur Tax Liability National taxes

The Assessment Cycle 1 . Incur Tax Liability National taxes Taxable period: per transaction, monthly, quarterly,

Taxable period: per transaction, monthly, quarterly, annuallyThe Assessment Cycle 1 . Incur Tax Liability National taxes 2 . Filing of Return Doctrine

2. Filing of Return Doctrine of Imprescriptibility. - Taxes are imprescriptible as they are the lifeblood of the government.

imprescriptible as they are the lifeblood of the government. Exception to the Doctrine of Imprescriptibility. -
imprescriptible as they are the lifeblood of the government. Exception to the Doctrine of Imprescriptibility. -
imprescriptible as they are the lifeblood of the government. Exception to the Doctrine of Imprescriptibility. -

Exception to the Doctrine of Imprescriptibility. - However, tax statutes may provide for statute of limitations. Exception to the Exception. - Although the NIRC provides for the limitation in the assessment and collection of taxes imposed, such prescriptive period will only be applicable to those taxes that were returnable. The prescriptive period shall start from the time the taxpayer files the tax return and

start from the time the taxpayer files the tax return and declares his liability. (Collector v.

declares his liability. (Collector v. Bisaya Land Transportaion Co., 1958) "Pay-as-you-file" system

Exception: "installment" paymentTransportaion Co., 1958) "Pay-as-you-file" system Income tax is in excess of P2,000 Taxpayer is not a

Income tax is in excess of P2,000 Taxpayer is not a corporationv. Bisaya Land Transportaion Co., 1958) "Pay-as-you-file" system Exception: "installment" payment

system Exception: "installment" payment Income tax is in excess of P2,000 Taxpayer is not a corporation
Option to pay in 2 installments 1st installment: upon filing 2nd installment: on or before

Option to pay in 2 installments 1st installment: upon filing

Option to pay in 2 installments 1st installment: upon filing 2nd installment: on or before July

2nd installment: on or before July 15 following the close of the calendar yearOption to pay in 2 installments 1st installment: upon filing "Self-assessment" rule When is assessment required

"Self-assessment" ruleor before July 15 following the close of the calendar year When is assessment required to

When is assessment required to establish tax liability?close of the calendar year "Self-assessment" rule GENERAL RULES: 1 . Taxes are self-assessing, i.e.

GENERAL RULES:rule When is assessment required to establish tax liability? 1 . Taxes are self-assessing, i.e. assessment

1. Taxes are self-assessing, i.e. assessment is not required to establish tax liability

2. If discrepancy is on the face of the return (i.e. tax paid < tax due), assessment is also not required

EXCEPTIONS:tax paid < tax due), assessment is also not required 1 . Improperly Accumulated Earnings Tax

1. Improperly Accumulated Earnings Tax

2. When taxable period of taxpayer is terminated Retirement from business Intent to leave the Philippines Intent to hide/conceal/remove property from the Philippines Act tending to obstruct proceedings for the collection of taxes

3. In case of deficiency tax liability arising from a tax audit

4. Tax lien

5. Dissolving corporation

from a tax audit 4 . Tax lien 5 . Dissolving corporation Delinquency vs. Deficiency PNOC
from a tax audit 4 . Tax lien 5 . Dissolving corporation Delinquency vs. Deficiency PNOC
from a tax audit 4 . Tax lien 5 . Dissolving corporation Delinquency vs. Deficiency PNOC
from a tax audit 4 . Tax lien 5 . Dissolving corporation Delinquency vs. Deficiency PNOC
from a tax audit 4 . Tax lien 5 . Dissolving corporation Delinquency vs. Deficiency PNOC

Delinquency vs. Deficiencyfrom a tax audit 4 . Tax lien 5 . Dissolving corporation PNOC Where to file?

PNOClien 5 . Dissolving corporation Delinquency vs. Deficiency Where to file? Large Taxpayer: eFPS Non-Large Taxpayer:

Where to file?5 . Dissolving corporation Delinquency vs. Deficiency PNOC Large Taxpayer: eFPS Non-Large Taxpayer: RDO of principal

Large Taxpayer: eFPScorporation Delinquency vs. Deficiency PNOC Where to file? Non-Large Taxpayer: RDO of principal place of business

Non-Large Taxpayer: RDO of principal place of businessvs. Deficiency PNOC Where to file? Large Taxpayer: eFPS Individual Self-Employed: RDO of principal place of

Individual Self-Employed: RDO of principal place of businesseFPS Non-Large Taxpayer: RDO of principal place of business Individual Employee: RDO of place of residence

Individual Employee: RDO of place of residence or employmentIndividual Self-Employed: RDO of principal place of business Real Property Transaction: RDO of location of real

Real Property Transaction: RDO of location of real propertybusiness Individual Employee: RDO of place of residence or employment When to file? Per transaction CGT

When to file?residence or employment Real Property Transaction: RDO of location of real property Per transaction CGT Monthly

Per transactionof residence or employment Real Property Transaction: RDO of location of real property When to file?

CGTor employment Real Property Transaction: RDO of location of real property When to file? Per transaction

Monthly OPT DST
Monthly
OPT
DST
VAT (declaration)

VAT (declaration)

Creditable Withholding Tax

Creditable Withholding Tax

VAT (declaration) Creditable Withholding Tax Quarterly VAT (return) Annually ITR Amendment of Return Conditions: 1 .
VAT (declaration) Creditable Withholding Tax Quarterly VAT (return) Annually ITR Amendment of Return Conditions: 1 .

Quarterly VAT (return)

Creditable Withholding Tax Quarterly VAT (return) Annually ITR Amendment of Return Conditions: 1 . No

Annually ITR Amendment of Return

Conditions:Quarterly VAT (return) Annually ITR Amendment of Return 1 . No withdrawal of return allowed 2

VAT (return) Annually ITR Amendment of Return Conditions: 1 . No withdrawal of return allowed 2
VAT (return) Annually ITR Amendment of Return Conditions: 1 . No withdrawal of return allowed 2

1. No withdrawal of return allowed

2. Within 3 years from date of filing

3. No notice of audit has been served

CAVEAT: "Substantial Amendment" Resets prescriptive period When substantial?from date of filing 3 . No notice of audit has been served Amount underdeclared: 30%

Amendment" Resets prescriptive period When substantial? Amount underdeclared: 30% Amount overstated: 30% 3 .
Amendment" Resets prescriptive period When substantial? Amount underdeclared: 30% Amount overstated: 30% 3 .

Amount underdeclared: 30%Amendment" Resets prescriptive period When substantial? Amount overstated: 30% 3 . Pre-Audit Investigation Fishing

Amount overstated: 30%period When substantial? Amount underdeclared: 30% 3 . Pre-Audit Investigation Fishing Expedition? Search

3. Pre-Audit Investigation

Fishing Expedition? Search Warrants Subpoena Duces Tecum Search Warrants Subpoena Duces Tecum

Power to ascertain the correctness of the returnFishing Expedition? Search Warrants Subpoena Duces Tecum Power to make / amend the return 1 .

Power to make / amend the returnDuces Tecum Power to ascertain the correctness of the return 1 . Failure to file return

correctness of the return Power to make / amend the return 1 . Failure to file
correctness of the return Power to make / amend the return 1 . Failure to file

1. Failure to file return

2. Willful non-filing of return

3. Filing of fraudulent return

Power to prescribe the amount of tax base e.g. gross sales and receipts e.g. real property valuesnon-filing of return 3 . Filing of fraudulent return Use of "Best Evidence Obtainable" Data, record,

Use of "Best Evidence Obtainable" Data, record, papers, documents, or any evidence Sources: government, corporations, employees, clients,base e.g. gross sales and receipts e.g. real property values patients, tenants, lessees, vendees, and from

Sources: government, corporations, employees, clients, patients, tenants, lessees, vendees, and from all other
Sources: government, corporations, employees, clients, patients, tenants, lessees, vendees, and from all other
Sources: government, corporations, employees, clients, patients, tenants, lessees, vendees, and from all other
Sources: government, corporations, employees, clients, patients, tenants, lessees, vendees, and from all other
Sources: government, corporations, employees, clients, patients, tenants, lessees, vendees, and from all other

patients, tenants, lessees, vendees, and from all other sources When available:

1. Return is false / erroneous

2. Return is incomplete

3. No return is filed

credits claimed 5. Failure to submit documentary support

Inventory-takingcredits claimed 5 . Failure to submit documentary support Surveillance Limited power to inquire into bank

Surveillance5 . Failure to submit documentary support Inventory-taking Limited power to inquire into bank accounts/deposits

Limited power to inquire into bank accounts/depositsto submit documentary support Inventory-taking Surveillance "Bank Secrecy Law" GENERAL RULE: BIR cannot inquire

"Bank Secrecy Law"Limited power to inquire into bank accounts/deposits GENERAL RULE: BIR cannot inquire into bank deposits of

GENERAL RULE: BIR cannot inquire into bank deposits of taxpayersinto bank accounts/deposits "Bank Secrecy Law" EXCEPTIONS: 1 . To determine gross estate of decedent 2

EXCEPTIONS:RULE: BIR cannot inquire into bank deposits of taxpayers 1 . To determine gross estate of

1. To determine gross estate of decedent

2. Compromise based on financial incapacity of taxpayer

Waiver of bank secrecy privilege is required2 . Compromise based on financial incapacity of taxpayer 3 . RA 10021 (Exchange of Information

3. RA 10021 (Exchange of Information Act)

Applicable in tax treatiesis required 3 . RA 10021 (Exchange of Information Act) Request of a treaty country to

Request of a treaty country to obtain information held by banks and financial institutions(Exchange of Information Act) Applicable in tax treaties Request for Financial Information Authorizing BIR to use

Request for Financial Informationobtain information held by banks and financial institutions Authorizing BIR to use information for: Tax assessment

Authorizing BIR to use information for:and financial institutions Request for Financial Information Tax assessment Verification Audit Enforcement ITR of

Tax assessmentInformation Authorizing BIR to use information for: Verification Audit Enforcement ITR of specific taxpayers

VerificationAuthorizing BIR to use information for: Tax assessment Audit Enforcement ITR of specific taxpayers Order of

AuditBIR to use information for: Tax assessment Verification Enforcement ITR of specific taxpayers Order of the

Enforcementto use information for: Tax assessment Verification Audit ITR of specific taxpayers Order of the President

ITR of specific taxpayersfor: Tax assessment Verification Audit Enforcement Order of the President of the Republic Treated as

Order of the President of the Republic Republic

Treated as confidential informationspecific taxpayers Order of the President of the Republic Notice to Taxpayer A taxpayer may be

Notice to Taxpayerof the Republic Treated as confidential information A taxpayer may be left in the dark as

A taxpayer may be left in the dark

A

taxpayer may be left in the dark

as to the existence of a request

for financial information made by

a

foreign tax authority

Default period prior to notification: 60 days

Default period prior to notification: 60 days

Discretionary period (if

Discretionary period (if

notification undermines chances of success of investigation): maximum of 6 months Penalty for refusal: fine

notification undermines chances of success of investigation):

notification undermines chances of success of investigation): maximum of 6 months Penalty for refusal: fine or

maximum of 6 months Penalty for refusal: fine or 2-5 years imprisonment

Examine documents relevant and material to inquiry relevant and material to inquiry

Summon personsExamine documents relevant and material to inquiry Production of documents Pacquiao case: BIR subpoenaed him

Production of documents Pacquiao case: BIR subpoenaed him to produce tax returns filed with the US Internal Revenue Pacquiao case: BIR subpoenaed him to produce tax returns filed with the US Internal Revenue Service

Power to take testimony under oathtax returns filed with the US Internal Revenue Service Canvass revenue district CONSTRUCTIVE METHODS OF INCOME

Internal Revenue Service Power to take testimony under oath Canvass revenue district CONSTRUCTIVE METHODS OF INCOME

Canvass revenue district CONSTRUCTIVE METHODS OF INCOME DETERMINATION (if taxpayer's records/methods are not reflective of true income) if taxpayer's records/methods are not reflective of true income)

Net Worth Methodrecords/methods are not reflective of true income) Cash Expenditure Method e.g. Napoles tax evasion case: BIR

Cash Expenditure Methodare not reflective of true income) Net Worth Method e.g. Napoles tax evasion case: BIR used

e.g. Napoles tax evasion case: BIR used the expenditure method against the accused, by arguing that Napoles tax evasion case: BIR used the expenditure method against the accused, by arguing that Napoles purchased real property, motor vehicles and other investments that exceeded their declared incomes (ITRs) during the mentioned periods. e.g. James Tiu tax investigation:

the mentioned periods. e.g. James Tiu tax investigation: COMELEC campaign contribution Candidates' statements
COMELEC campaign contribution

COMELEC campaign contribution

Candidates' statements of contributions and

Candidates' statements of contributions and

Candidates' statements of contributions and
Candidates' statements of contributions and
Candidates' statements of contributions and

expenses Downpayment for BMW

Sale of unlisted shares of stock

Payment of CGT

Percentage MethodBMW Sale of unlisted shares of stock Payment of CGT Bank Deposit Method Unit and Value

Bank Deposit Methodshares of stock Payment of CGT Percentage Method Unit and Value Method "Third Party Information" or

Unit and Value MethodPayment of CGT Percentage Method Bank Deposit Method "Third Party Information" or "Access to

"Third Party Information" or "Access to Records" Method Access Letter Royale Business Club tax evasion case: variance in ITR (P196 million) and income Access Letter Royale Business Club tax evasion case: variance in ITR (P196 million) and income payments from BPI, Metrobank and BDO (P780 million)

Surveillance and Assessment Methodand income payments from BPI, Metrobank and BDO (P780 million) Such methods as in the opinion

Such methods as in the opinion of the Commissioner clearlyin ITR (P196 million) and income payments from BPI, Metrobank and BDO (P780 million) Surveillance and

and BDO (P780 million) Surveillance and Assessment Method Such methods as in the opinion of the
and BDO (P780 million) Surveillance and Assessment Method Such methods as in the opinion of the

reflects the income

4. Audit

Selection criteria Targets of Auditreflects the income 4 . Audit 1 . Mandatory Cases Income tax: tax refund, tax credit,

the income 4 . Audit Selection criteria Targets of Audit 1 . Mandatory Cases Income tax:

1. Mandatory Cases Income tax: tax refund, tax credit, carry-over of payments

Income tax: tax refund, tax credit, carry-over of payments VAT: refund, credit, excess input tax Request

VAT: refund, credit, excess input tax Request for Tax Clearance: retirement and cessation of business Request for Tax Clearance: corporate reorganizations (e.g. merger, consolidation, split-up, spin-off)Income tax: tax refund, tax credit, carry-over of payments 2 . Top Priority Taxpayers Industry-based 3

(e.g. merger, consolidation, split-up, spin-off) 2 . Top Priority Taxpayers Industry-based 3 . Other
(e.g. merger, consolidation, split-up, spin-off) 2 . Top Priority Taxpayers Industry-based 3 . Other

2. Top Priority Taxpayers Industry-based

3. Other Priority Taxpayers "red flags"-based

4. RDO Discretion

Taxpayers "red flags"-based 4 . RDO Discretion Limit: total number of selected audit candidates may not
Taxpayers "red flags"-based 4 . RDO Discretion Limit: total number of selected audit candidates may not

Limit: total number of selected audit candidates may not exceed 25% of total number of taxpayers to be audited by the district office (other than mandatory cases)

e.g. Audit of VAT taxpayers whose VAT compliance is below the established industry benchmarks;

taxpayers whose VAT returns for the succeeding quarters show substantial decrease in tax payment; taxpayers whose VAT returns reflect substantial input taxes from importations and local purchases, such as when the total purchases claimed exceed 75 percent of the total sales. Pacquiao case: The BIR started to investigate and audit Pacquiao in late 2010 after an “abrupt” drop in his ranking among the country’s top taxpayers Random sampling "Only 2,000 tax investigators" e.g. professionals

the country’s top taxpayers Random sampling "Only 2,000 tax investigators" e.g. professionals AUDIT NOTICES
the country’s top taxpayers Random sampling "Only 2,000 tax investigators" e.g. professionals AUDIT NOTICES
the country’s top taxpayers Random sampling "Only 2,000 tax investigators" e.g. professionals AUDIT NOTICES
the country’s top taxpayers Random sampling "Only 2,000 tax investigators" e.g. professionals AUDIT NOTICES
the country’s top taxpayers Random sampling "Only 2,000 tax investigators" e.g. professionals AUDIT NOTICES
the country’s top taxpayers Random sampling "Only 2,000 tax investigators" e.g. professionals AUDIT NOTICES

AUDIT NOTICEShis ranking among the country’s top taxpayers Random sampling "Only 2,000 tax investigators" e.g. professionals

1. Letter of Authority (LA)

"White Paper" informal invitation letter informal invitation letter

When LA not needed:(LA) "White Paper" informal invitation letter 1 . Civil or criminal tax fraud Tax fraud division

Paper" informal invitation letter When LA not needed: 1 . Civil or criminal tax fraud Tax

1. Civil or criminal tax fraud Tax fraud division of Enforcement Services

2. Policy cases under audit (RMO 36-99)

Services 2 . Policy cases under audit (RMO 36-99) Special Teams in the National Office Content:

Special Teams in the National OfficeServices 2 . Policy cases under audit (RMO 36-99) Content: 1 . Revenue officers authorized to

Content:under audit (RMO 36-99) Special Teams in the National Office 1 . Revenue officers authorized to

1. Revenue officers authorized to conduct UST case: a Letter of Authority was issued to regional revenue officers. Subsequently, UST was transferred to the Large Taxpayers Service. Regional officers lost authority under the LA. A new LA should have been granted. Hence, LA is void. Consequently, assessment is void.

2. Kinds of taxes Each kind of tax has a separate filing due date, and separate filing due dates mean there are separate prescriptive periods

3. Period when tax was incurred Business One vs. CIR: audit only covered year 1998, but taxpayer was assessed a deficiency for tax incurred in 1997. Why is this valid?

4. Approving official

incurred in 1997. Why is this valid? 4 . Approving official Period of service: 30 days
incurred in 1997. Why is this valid? 4 . Approving official Period of service: 30 days
incurred in 1997. Why is this valid? 4 . Approving official Period of service: 30 days

Period of service: 30 days from date of issuanceincurred in 1997. Why is this valid? 4 . Approving official "Once per Year" Rule GENERAL

"Once per Year" Ruleofficial Period of service: 30 days from date of issuance GENERAL RULE: audit should be done

GENERAL RULE: audit should be done only once

GENERAL RULE: audit should be done only once

GENERAL RULE: audit should be done only once

per taxable year. EXCEPTIONS:

1. Fraud, irregularities, mistakes were committed

2. Request for reinvestigation or re-examination

3. Need to verify taxpayer's compliance with withholding and other internal revenue taxes

4. Verification of CGT

5. Third party verification

Period of audit: double 120-day Rule Original period (120 days)

Period of audit: double 120-day Rule Original period (120 days)

Period of audit: double 120-day Rule Original period (120 days)
Revalidation (another 120 days)

Revalidation (another 120 days)

 

Only once if issued by RD 

Twice if issued by CIRperiod (120 days) Revalidation (another 120 days)   Only once if issued by RD "Place of

"Place of business" rule

"Place of business" rule

2. Tax Verification Notice (TVN)

3. Letter Notice (LN)

2 . Tax Verification Notice (TVN) 3 . Letter Notice (LN) Inventory Methods for Income Determination

Inventory Methods for Income Determination Last In First Out (LIFO)

Methods for Income Determination Last In First Out (LIFO) First In First Out (FIFO) Weighted Average

First In First Out (FIFO) Weighted Average Specific Identification 5. Informal Conference

Average Specific Identification 5 . Informal Conference Notice of Informal Conference (NIC) Reply to NIC: 15
Average Specific Identification 5 . Informal Conference Notice of Informal Conference (NIC) Reply to NIC: 15
Average Specific Identification 5 . Informal Conference Notice of Informal Conference (NIC) Reply to NIC: 15
Notice of Informal Conference (NIC) Reply to NIC: 15 days from date of receipt of

Notice of Informal Conference (NIC) Reply to NIC: 15 days from date of receipt of NIC

Notice of Informal Conference (NIC) Reply to NIC: 15 days from date of receipt of NIC
Effect of failure to reply: is assessment executory? Not yet. Examiner recommend only for PAN.

Effect of failure to reply: is assessment executory? Not yet. Examiner recommend only for PAN. When NIC dispensable:

Effect of failure to reply: is assessment executory? Not yet. Examiner recommend only for PAN. When

1. Deficiency tax results from mathematical error.

2. Discrepancy: withheld vs. remitted

3. Double refund or double tax credit

Claim in one quarter, carry over in another quarter

Claim in one quarter, carry over in another quarter

4. Excise tax due has not been paid

5. Violation of condition of tax-free importation

Findings of revenue officer Sources of information

Findings of revenue officer Sources of information

Findings of revenue officer Sources of information

1. Returns filed e.g. VAT return, Income Tax Return

2. Reports submitted by taxpayer e.g. Summary List of Purchases, Summary List of Sales

3. Books kept by taxpayer e.g. journals, ledgers, financial statements

4. Third party sources e.g. Pacquiao case: BIR estimated his tax obligations for 2009 at P1.433 billion based on his income in the United States from “public information”

his tax obligations for 2009 at P1.433 billion based on his income in the United States
his tax obligations for 2009 at P1.433 billion based on his income in the United States
his tax obligations for 2009 at P1.433 billion based on his income in the United States
his tax obligations for 2009 at P1.433 billion based on his income in the United States

on his bouts and shares from pay-per-view and online ticket purchases, as well as endorsements.

e.g. Corona impeachment : alpha list of compensation income, SALN, GCIS filed in SEC, entries in Corona impeachment: alpha list of compensation income, SALN, GCIS filed in SEC, entries in the Registry of Deeds

e.g. Bayshore Chemical Importer: proprietor underdeclared sales based on the Summary List of Purchases submitted by Bayshore Chemical Importer: proprietor underdeclared sales based on the Summary List of Purchases submitted by his customers on local purchases.

e.g. Siennalyn Gold Mining Corp.: the case against the mining firm stemmed from a denunciation letter Siennalyn Gold Mining Corp.: the case against the mining firm stemmed from a denunciation letter informing the BIR of its alleged perpetration of tax evasion schemes such as its failure to register two addresses with the BIR and its use of a fake Taxpayer Identification Number (TIN) and financial statements.

Identification Number (TIN) and financial statements. Variances Return vs. Return Return vs. Books Return vs.

Variances Return vs. Return

(TIN) and financial statements. Variances Return vs. Return Return vs. Books Return vs. Reports submitted to
Return vs. Books

Return vs. Books

Return vs. Books
Return vs. Books
Return vs. Books
Return vs. Books
Return vs. Books

Return vs. Reports submitted to BIR

Return vs. Third party sources

Books vs. Reports submitted to BIR

Books vs. Third party sources

etc.

What happens in Informal Conferences:submitted to BIR Books vs. Third party sources etc. BIR presents findings BIR presents sources of

BIR presents findings BIR presents sources of information BIR may or may not sign findings
BIR presents findings
BIR presents sources of information
BIR may or may not sign findings
1st opportunity to explain (verbal)
Submit documentary evidence (optional)
Submit position paper (optional)
Request for 2nd Informal Conference
Request for re-examination/reinvestigation
Effect: suspends running of prescription
See if waiver of statute of limitations necessary
Alternative: jeopardy assessment

Informal Conference deleted (RR No. 18-2013): deleted the due process requirement of providing an informal conference. deleted the due process requirement of providing an informal conference.

Rationale : quicker cash turnover & reduce the discretion on the part of examiners 6

Rationale: quicker cash turnover & reduce the discretion on the part of examiners

6. Preliminary Assessment Notice (PAN)

Letter from Regional District Officer (RDO)part of examiners 6 . Preliminary Assessment Notice (PAN) 2nd opportunity to explain (5 days) Letter

2nd opportunity to explain (5 days)Notice (PAN) Letter from Regional District Officer (RDO) Letter from Assessment Division Chief or Regional Director

Letter from Assessment Division Chief or Regional Director 3rd opportunity to explain (15 days)District Officer (RDO) 2nd opportunity to explain (5 days) Due process requirement General rule: PAN is

Due process requirement General rule: PAN is indispensable. Exceptions: PAN is dispensable.or Regional Director 3rd opportunity to explain (15 days) 1 . Deficiency tax results from mathematical

rule: PAN is indispensable. Exceptions: PAN is dispensable. 1 . Deficiency tax results from mathematical error.
rule: PAN is indispensable. Exceptions: PAN is dispensable. 1 . Deficiency tax results from mathematical error.
rule: PAN is indispensable. Exceptions: PAN is dispensable. 1 . Deficiency tax results from mathematical error.

1. Deficiency tax results from mathematical error.

2. Discrepancy: withheld vs. remitted 2002 Bar Question: amounts actually remitted by a security agency were lower than taxes withheld from employees. Is PAN needed? (No)

3. Double refund or double tax credit

Is PAN needed? (No) 3 . Double refund or double tax credit Claim in one quarter,

Claim in one quarter, carry over in another quarterIs PAN needed? (No) 3 . Double refund or double tax credit 7 . Reply to

7. Reply to PAN

4. Excise tax due has not been paid

5. Violation of condition of tax-free importation e.g. Exempt person imports vehicle, sells to non- exempt person

Exempt person imports vehicle, sells to non- exempt person 15 days from receipt of PAN Extension
15 days from receipt of PAN

15

days from receipt of PAN

Extension allowed ( not a right )

Extension allowed (not a right)

Effect of non-filing of reply: assessment is executory? Not yet. Only enables RO to issue

Effect of non-filing of reply: assessment is executory? Not yet. Only enables RO to issue FAN.

8. Final Assessment Notice (FAN)

15 days from Reply to PAN (RR 18-2013)

15

days from Reply to PAN (RR 18-2013)

Public criticism: The shortened period does not give the taxpayers enough time to prepare his

Public criticism: The shortened period does not give the taxpayers enough time to prepare his documents and arguments. More importantly, it does not allow the BIR officers enough time to consider and study the documents and arguments presented to them. The short time renders the opportunity to respond and protest the PAN meaningless.

The "assessment" proper

The "assessment" proper

The "assessment" proper
The "assessment" proper

Written notice of tax liability

Demand Letter

Effects:

Effects:

Legal obligation is createdDeficiency interest starts to run Business of taxpayer does not become illegal Contrast with: local

Deficiency interest starts to runLegal obligation is created Business of taxpayer does not become illegal Contrast with: local business tax

Business of taxpayer does not become illegalLegal obligation is created Deficiency interest starts to run Contrast with: local business tax delinquency Essential

starts to run Business of taxpayer does not become illegal Contrast with: local business tax delinquency

Contrast with: local business tax delinquency Essential Requirements:

with: local business tax delinquency Essential Requirements: 1 . Antecedent steps are valid LA IC PAN

1. Antecedent steps are valid

LA IC PAN
LA
IC
PAN

2. Form of the FAN Signed by Commissioner or authorized representatives In writing Sevilla vs. CIR: numerical figures are also considered "in writing". Writing consists of: letters, words, numbers, etc., in any form of data compilation (including digital/electronic) Statement of law

CIR vs. Enron: FAN failed to contain any legal basis (NIRC, rules and regulations, jurisprudence). Hence, void. Statement of facts Relate with following concepts:

void. Statement of facts Relate with following concepts: Self-assessment Burden of proof Prima facie correctness of
void. Statement of facts Relate with following concepts: Self-assessment Burden of proof Prima facie correctness of
void. Statement of facts Relate with following concepts: Self-assessment Burden of proof Prima facie correctness of
void. Statement of facts Relate with following concepts: Self-assessment Burden of proof Prima facie correctness of
void. Statement of facts Relate with following concepts: Self-assessment Burden of proof Prima facie correctness of
void. Statement of facts Relate with following concepts: Self-assessment Burden of proof Prima facie correctness of
void. Statement of facts Relate with following concepts: Self-assessment Burden of proof Prima facie correctness of
void. Statement of facts Relate with following concepts: Self-assessment Burden of proof Prima facie correctness of

Self-assessment

of facts Relate with following concepts: Self-assessment Burden of proof Prima facie correctness of assessment

Burden of proof Prima facie correctness of assessment "Naked Assessment" "Naked Assessment" (invalid) Assessment without factual basis CIR vs. Benipayo: presumption of correctness of assessment cannot be made to rest on another presumption. Falcon Marketing vs. CIR: taxpayer's accounting books and records were lost or destroyed. The BIR made an assessment, based on ESTIMATES, considering absence of accounting records. Why didn't "presumption of correctness of assessment" apply?

considering absence of accounting records. Why didn't "presumption of correctness of assessment" apply?
considering absence of accounting records. Why didn't "presumption of correctness of assessment" apply?
considering absence of accounting records. Why didn't "presumption of correctness of assessment" apply?
considering absence of accounting records. Why didn't "presumption of correctness of assessment" apply?
considering absence of accounting records. Why didn't "presumption of correctness of assessment" apply?
considering absence of accounting records. Why didn't "presumption of correctness of assessment" apply?

CIR vs. Hantex: an assessment based on mere photocopies of documents is invalid. Why didn't "presumption of correctness an assessment based on mere photocopies of documents is invalid. Why didn't "presumption of correctness of assessment" apply?

CIR vs. Agrinurture: assessment of under- declaration based on failure to declare purchases. Purchases did not appear in assessment of under- declaration based on failure to declare purchases. Purchases did not appear in inventory or capital expenditures. BIR conclusion: such undeclared purchase was sold, resulting in un-reported income. SC:

assessment is invalid. There is income tax when there is income, not when there is purchase. Secondly, undeclared purchase is not prohibited by law. What is prohibited is overstatement of deductions.

"Jeopardy Assessment" (valid)by law. What is prohibited is overstatement of deductions. Assessment without benefit of complete investigation/audit

Assessment without benefit of complete investigation/auditof deductions. "Jeopardy Assessment" (valid) Collection will be "jeopardized" because of

Collection will be "jeopardized" because of "delay" in assessmentAssessment without benefit of complete investigation/audit Causes of "delay": LACK OF COOPERATION. Taxpayer

Causes of "delay":because of "delay" in assessment LACK OF COOPERATION. Taxpayer does not want to present books

LACK OF COOPERATION. Taxpayer does not want to present books of accounts and records.

LACK OF COOPERATION. Taxpayer does not want to present books of accounts and records.

FAILURE TO SUBSTANTIATE. Taxpayer fails to substantiate all or any of the deductions, exemptions, or

FAILURE TO SUBSTANTIATE. Taxpayer fails to substantiate all or any of the deductions, exemptions, or credits claimed in his return

What is the "jeopardy" involved? Impending expiration of prescriptive period for assessmentthe deductions, exemptions, or credits claimed in his return Remedy: waiver of prescriptive period What does

Remedy: waiver of prescriptive period What does taxpayer prefer: to receive a jeopardy assessment, or to waiver of prescriptive period What does taxpayer prefer: to receive a jeopardy assessment, or to extend prescriptive period for assessment?

assessment, or to extend prescriptive period for assessment? 3 . Service Personal delivery Substituted service (RR
assessment, or to extend prescriptive period for assessment? 3 . Service Personal delivery Substituted service (RR

3. Service Personal delivery

to extend prescriptive period for assessment? 3 . Service Personal delivery Substituted service (RR No. 18-2013):

Substituted service (RR No. 18-2013): PAN, PAN,

FLD/FAN, FDDA Pacquiao case : FDDA was served in Pacquiao's office in House of Representatives.

FLD/FAN, FDDA Pacquiao case: FDDA was served in Pacquiao's office in House of Representatives. He was not around. It was served to one of the staff. CTA treated it as ineffective. Hence, 30-day period to appeal in CTA did not lapse. Consequently, CTA still has jurisdiction. Registered mail Basilan vs. CIR: the FAN was mailed within the prescriptive period, but was received beyond the period. Why is the assessment considered still within the prescriptive period? (Presumption: regular course of mail)

prescriptive period? (Presumption: regular course of mail) South Entertainment Gallery vs. CIR: the BIR must prove
prescriptive period? (Presumption: regular course of mail) South Entertainment Gallery vs. CIR: the BIR must prove

South Entertainment Gallery vs. CIR: the BIR must prove that the taxpayer has indeed received the FLD/FAN in cases wherein the BIR must prove that the taxpayer has indeed received the FLD/FAN in cases wherein such document was sent through registered mail and the taxpayer directly denies receiving such mail.

4. Prescription

Such presumption can be disputed, and that a direct denial by the taxpayer that he received the documents shifts the burden of proof of receipt back to the BIR. Barcelon vs. CIR: a direct denial of the receipt of the mail shifts the burden Barcelon vs. CIR: a direct denial of the receipt of the mail shifts the burden of proof on the other party favored by the presumption to prove that the mailed letter was indeed received by the addressee SVI Information vs. CIR: doctrines on Service of FAN also apply to antecedent notices (e.g. PAN)

Rationale for statute of limitations NIRC periods If tax return is filed Not false or fraudulent

NIRC periods If tax return is filed Not false or fraudulent 3 years from deadline for
NIRC periods If tax return is filed Not false or fraudulent 3 years from deadline for
NIRC periods If tax return is filed Not false or fraudulent 3 years from deadline for

3 years from deadline for filing return, or

years from actual date of filing if beyond the deadline for filing 2000 Bar Question: due date for

3

filing return, or years from actual date of filing if beyond the deadline for filing 2000
filing is April 15, 2005. Date of actual filing is March 2005. FAN was received

filing is April 15, 2005. Date of actual filing is March 2005. FAN was received in April 15, 2008. Is this beyond the prescriptive period? (No)

2002 Bar Question: due date for filing is April 15, 1998. FAN was received in April 20, 2001. due date for filing is April 15, 1998. FAN was received in April 20, 2001. Is this beyond the prescriptive period? (Yes) Timing of filing:

e.g. creditable withholding tax:this beyond the prescriptive period? (Yes) Timing of filing: monthly remittance return vs. annual information return

(Yes) Timing of filing: e.g. creditable withholding tax: monthly remittance return vs. annual information return
(Yes) Timing of filing: e.g. creditable withholding tax: monthly remittance return vs. annual information return

monthly remittance return vs. annual information return False or fraudulent (10 years from discovery)

Aznar vs. CIR: distinguishes false return vs. fraudulent return. If tax return is not filed : distinguishes false return vs. fraudulent return. If tax return is not filed

10 years after date of discovery of omission to

10 years after date of discovery of omission to

10 years after date of discovery of omission to
10 years after date of discovery of omission to

file the return Date of discovery must be within the 3-year

general prescriptive period Butuan Sawmill vs. CTA: if a defective return

period Butuan Sawmill vs. CTA: if a defective return was filed, it is as if no

was filed, it is as if no return was filed. Hence, the prescriptive period is 10 years, not 3 years, because there is already omission to file the return. Agreed periods

Extension of period for assessment Subsequent extensions allowed, but must be within the period of the prior extensions Required in "Request for Reconsideration" from the FAN Waiver of prescription

Reconsideration" from the FAN Waiver of prescription 1 . Use of BIR Form 2 . Signed
Reconsideration" from the FAN Waiver of prescription 1 . Use of BIR Form 2 . Signed

1. Use of BIR Form

2. Signed by taxpayer

not signed by the BIR commissioner or her representative during the time that the said waivers were executed on various dates in 1989 through 1993. Hence, the prescriptive period was not validly extended. (P146 million tax deficiency case)

4. Notarized

5. 3 copies

6. Indicate: expiration date

7. Execution: date of acceptance by BIR = before expiration of prescriptive period

8. Renewal: Date of renewal of waiver = before

expiration of prior extension

of renewal of waiver = before expiration of prior extension Defective waiver JGC Corporation Manila case:

Defective waiver JGC Corporation Manila case: the first waiver executed by the corporation was valid, but the second waiver, which ostensibly was executed to further extend the prescription period beyond the period covered by the first waiver, was not valid to effect the extension of the prescriptive period. Rules of counting:

the extension of the prescriptive period. Rules of counting: Date of issue of FAN ( irrelevant
the extension of the prescriptive period. Rules of counting: Date of issue of FAN ( irrelevant

Date of issue of FAN (irrelevant ) irrelevant)

Date of serviceRules of counting: Date of issue of FAN ( irrelevant ) Date of receipt Date of

Date of receipt Date of mailingDate of issue of FAN ( irrelevant ) Date of service "Last day" rule: Saturday, Sunday,

irrelevant ) Date of service Date of receipt Date of mailing "Last day" rule: Saturday, Sunday,

"Last day" rule: Saturday, Sunday, legal holiday, business dayirrelevant ) Date of service Date of receipt Date of mailing Taxable year Normal year (365

Taxable year Normal year (365 days) Leap year (366 days) Art. 13, Civil Code: 1 year = 365 days Namarco vs. Tecson: if there is a leap year within the prescriptive period, the 1,095th Namarco vs. Tecson: if there is a leap year within the prescriptive period, the 1,095th day (365 days x 3 years) is the last day of assessment CIR vs. Primetown Property Group:

period, the 1,095th day ( 365 days x 3 years) is the last day of assessment
period, the 1,095th day ( 365 days x 3 years) is the last day of assessment
period, the 1,095th day ( 365 days x 3 years) is the last day of assessment
period, the 1,095th day ( 365 days x 3 years) is the last day of assessment
period, the 1,095th day ( 365 days x 3 years) is the last day of assessment
Sec. 31, Administrative Code of 1987 year = 12 calendar months month = 30 days

Sec. 31, Administrative Code of 1987year = 12 calendar months month = 30 days unless law refers to 1 1

year = 12 calendar monthsSec. 31, Administrative Code of 1987 month = 30 days unless law refers to 1 1

month = 30 days unless law refers to31, Administrative Code of 1987 year = 12 calendar months 1 1 a specific calendar month

1

1

a specific calendar month

Presumption: 360 days in one year Reconcile: Namarco case vs. Primetown case 360 days in one year Reconcile: Namarco case vs. Primetown case

Suspension of running of prescriptive periodin one year Reconcile: Namarco case vs. Primetown case 1 . Period when CIR is prohibited

1. Period when CIR is prohibited from making assessment and beginning distraint or levy or proceeding in court and 60 days thereafter

e.g. Republic vs. Ker: pending petition for review in CTA from the decision on the protested Republic vs. Ker: pending petition for review in CTA from the decision on the protested assessment

2. Taxpayer requests for reinvestigation Waiver of suspension of period is required Collector vs. Suyoc: The request alone will not suspend the period. It should be GRANTED by BIR.

3. Taxpayer cannot be located in address given by him in the return filed Except: taxpayer informs BIR of change of address CIR vs. BASF Coating: taxpayer changed address without formally informing BIR. BIR sent a FAN via registered mail, but it was returned to sender (i.e. not received). BIR also had communications with the taxpayer sent to the new address.

4. Warrant of Distraint and Levy is duly served, and no property could be located Applies only for suspension of period to collect

5. Taxpayer is out of the Philippines

of period to collect 5 . Taxpayer is out of the Philippines Substantial Amendment of Return
of period to collect 5 . Taxpayer is out of the Philippines Substantial Amendment of Return
of period to collect 5 . Taxpayer is out of the Philippines Substantial Amendment of Return
of period to collect 5 . Taxpayer is out of the Philippines Substantial Amendment of Return
of period to collect 5 . Taxpayer is out of the Philippines Substantial Amendment of Return

Substantial Amendment of Returnof period to collect 5 . Taxpayer is out of the Philippines resets the prescriptive period

resets the prescriptive period5 . Taxpayer is out of the Philippines Substantial Amendment of Return 30% rule Kinds of

the Philippines Substantial Amendment of Return resets the prescriptive period 30% rule Kinds of Assessments: Original

30% rule Kinds of Assessments:5 . Taxpayer is out of the Philippines Substantial Amendment of Return resets the prescriptive period

the Philippines Substantial Amendment of Return resets the prescriptive period 30% rule Kinds of Assessments: Original

Original FAN

Follow-up or Collection Letter (after taxpayer denied receipt of original FAN)

Follow-up or Collection Letter (after taxpayer denied receipt of original FAN)

Demand Letter (erroneous refund)

Demand Letter (erroneous refund)

Demand Letter (erroneous refund)

Demand Letter (bouncing check)

Letter (erroneous refund) Demand Letter (bouncing check) Not considered assessment e.g. Show-cause letter e.g.

Not considered assessment e.g. Show-cause letter e.g. Antecedent notices (e.g. PAN) e.g. Incomplete FAN e.g. Affidavit in support of criminal complaint

FAN e.g. Affidavit in support of criminal complaint 9 . Protest "Makes or breaks a tax
FAN e.g. Affidavit in support of criminal complaint 9 . Protest "Makes or breaks a tax
FAN e.g. Affidavit in support of criminal complaint 9 . Protest "Makes or breaks a tax
FAN e.g. Affidavit in support of criminal complaint 9 . Protest "Makes or breaks a tax

9. Protest

"Makes or breaks a tax case"e.g. Affidavit in support of criminal complaint 9 . Protest "The most crucial remedy" 30 days

"The most crucial remedy"complaint 9 . Protest "Makes or breaks a tax case" 30 days from receipt of FAN

30 days from receipt of FAN Effect of failure to protest: FAN becomes executory Meaning of "executory":or breaks a tax case" "The most crucial remedy" Appeal to CTA not available BIR can

FAN becomes executory Meaning of "executory": Appeal to CTA not available BIR can start to collect
FAN becomes executory Meaning of "executory": Appeal to CTA not available BIR can start to collect
Appeal to CTA not available

Appeal to CTA not available

BIR can start to collect (administratively or judicially)

BIR can start to collect (administratively or judicially)

BIR can start to collect (administratively or judicially)

Compromise of assessment is still possible

"Request for reconsideration" Required: waiver of prescription BPI vs. CIR : without the waiver, the prescriptive period will not be tolled. BPI vs. CIR: without the waiver, the prescriptive period will not be tolled.

"Request for reinvestigation" automatically tolls the statute of limitationsthe waiver, the prescriptive period will not be tolled. Content: Statement of facts and law Undisputed

Content:automatically tolls the statute of limitations Statement of facts and law Undisputed findings Disputed

automatically tolls the statute of limitations Content: Statement of facts and law Undisputed findings Disputed
automatically tolls the statute of limitations Content: Statement of facts and law Undisputed findings Disputed
automatically tolls the statute of limitations Content: Statement of facts and law Undisputed findings Disputed

Statement of facts and law Undisputed findings Disputed findings CIR vs. Isabela: a "disputed assessment" arises from the filing and receipt of a protest, i.e. without a protest, there is no disputed assessment, and without disputed assessment, the CTA has no jurisdiction (note: the subject matter jurisdiction of CTA includes "disputed assessments", which is an exclusive appellate jurisdiction) Jurisdictional requirement for judicial appeal

jurisdiction) Jurisdictional requirement for judicial appeal "Exhaustion of administrative remedies" Premature
jurisdiction) Jurisdictional requirement for judicial appeal "Exhaustion of administrative remedies" Premature

"Exhaustion of administrative remedies" Premature invocation of court's intervention: The CTA threw out a petition filed by Castalloy Technology Premature invocation of court's intervention: The CTA threw out a petition filed by Castalloy Technology Corp., Allied Industrial

of court's intervention: The CTA threw out a petition filed by Castalloy Technology Corp., Allied Industrial

Corp. and Alinsu Steel Foundry Corp., for lack of jurisdiction because the said corporations did not file an administrative protest against the FAN issued by the BIR Regional Office in Cebu.

10. Supplemental Protest 60 days from date of filing of protest

Supplemental Protest 60 days from date of filing of protest Effect of non-filing: FAN becomes executory!
Effect of non-filing: FAN becomes executory!

Effect of non-filing: FAN becomes executory!

Effect of non-filing: FAN becomes executory!

Content:

New or additional evidence Standard Chartered Bank vs. CIR: taxpayer to submit evidence which he

New or additional evidence Standard Chartered Bank vs. CIR: taxpayer to submit evidence which he feels is necessary to support his protest, not what BIR feels should be submitted.

taxpayer to submit evidence which he feels is necessary to support his protest, not what BIR
New or additional defenses

New or additional defenses

11. Decision on Protest Administrative Appeal 30 days from date of receipt of decision on Protest From Regional Director to BIR Commissioner "Exhaustion of administrative remedies" Oceanic vs. CIR: since the authority to make tax assessments may be delegated to subordinate officers, assessment has same force and effect if not revised or reviewed by CIR. Final Decision on Disputed Assessment (FDDA) Cancel assessment Revise assessment Direct Denial Indirect Denial (any attempt to collect) Formal and final letter of demand Final Notice Before Seizure Hilado vs. CIR: outright issuance of Warrant of Distraint and Levy BIR vs. Union Shipping: Filing of civil action by BIR

Levy BIR vs. Union Shipping: Filing of civil action by BIR Period of appeal to start
Levy BIR vs. Union Shipping: Filing of civil action by BIR Period of appeal to start
Levy BIR vs. Union Shipping: Filing of civil action by BIR Period of appeal to start
Levy BIR vs. Union Shipping: Filing of civil action by BIR Period of appeal to start
Levy BIR vs. Union Shipping: Filing of civil action by BIR Period of appeal to start
Levy BIR vs. Union Shipping: Filing of civil action by BIR Period of appeal to start
Levy BIR vs. Union Shipping: Filing of civil action by BIR Period of appeal to start
Levy BIR vs. Union Shipping: Filing of civil action by BIR Period of appeal to start
Levy BIR vs. Union Shipping: Filing of civil action by BIR Period of appeal to start
Levy BIR vs. Union Shipping: Filing of civil action by BIR Period of appeal to start
Levy BIR vs. Union Shipping: Filing of civil action by BIR Period of appeal to start
Levy BIR vs. Union Shipping: Filing of civil action by BIR Period of appeal to start
Levy BIR vs. Union Shipping: Filing of civil action by BIR Period of appeal to start
Levy BIR vs. Union Shipping: Filing of civil action by BIR Period of appeal to start
Period of appeal to start from receipt of summons United International Pictures vs. CIR: preliminary
Period of appeal to start from receipt of summons
United International Pictures vs. CIR: preliminary collection
letter may serve as FAN
Referral to SOLGEN of case
Inaction by BIR Commissioner
180 days from filing of protest, or of supplemental protest (if
any)

12. Petition for Review in CTA Division

RCBC vs. CIR: 2 alternative options-- file Petition for Review (PR) after lapse of 180 days from filing of protest if file Petition for Review (PR) after lapse of 180 days from filing of protest if there is inaction, OR wait for the FDDA and then file the PR within 30 days from receipt Lascona case: the taxpayer cannot be prejudiced if the 180-day period lapses, because he chose to wait for the final decision of the BIR on the protest.

to wait for the final decision of the BIR on the protest. Relate with RMC 54-2014

Relate with RMC 54-2014 (VAT refund) / ROHM Apollo vs. CIR : RMC 54-2014 (VAT refund) / ROHM Apollo vs. CIR:

the lapse of the 120-day period within which the BIR should decide, without a decision on such claim, shall be deemed a denial of the claim. This means that the 30-day period to file with CTA shall automatically run from the end of the 120-day period.

NO MORE OPTION TO WAIT FOR FINAL DECISION OF BIR. TMAP lobby for legislative amendment: In the past, taxpayers claiming a refund normally wait for an actual denial by the BIR before they actually file a case in court. Now, it would then be necessary for the taxpayer claiming the VAT refund to file a case before the Court of Tax Appeals (CTA) within 30 days from the deemed denial of the administrative claim to further pursue his claim for refund. Pending case by business associations: RMC 54-2014 provides for its retroactive application, which means that all pending administrative claims for refund that have been pending by more than the 120 plus 30 day-period would then be deemed as “final and unappealable.” Fishwealth Canning vs. CIR: a motion for reconsideration of the denial of the Protest, filed in the BIR, does not toll the 30-day period to appeal to the CTA. Exclusivity rule (RR 18-2013): the remedy of filing a petition for review with the Court of Tax Appeals bars the remedy of waiting for the final decision of the Commissioner or his duly authorized representative, which decision is subject to appeal to the CTA.

which decision is subject to appeal to the CTA. Basis of subject matter jurisdiction: exclusive appellate
which decision is subject to appeal to the CTA. Basis of subject matter jurisdiction: exclusive appellate
which decision is subject to appeal to the CTA. Basis of subject matter jurisdiction: exclusive appellate
which decision is subject to appeal to the CTA. Basis of subject matter jurisdiction: exclusive appellate

Basis of subject matter jurisdiction: exclusive appellate jurisdiction over "disputed assessments"duly authorized representative, which decision is subject to appeal to the CTA. Presumption of correctness of

Presumption of correctness of assessmentto the CTA. Basis of subject matter jurisdiction: exclusive appellate jurisdiction over "disputed assessments"

Motion for Reconsideration 15 days from date of receipt of CTA decision 13 . Appeal

Motion for Reconsideration

Motion for Reconsideration 15 days from date of receipt of CTA decision 13 . Appeal to

15 days from date of receipt of CTA decision

13. Appeal to CTA en banc

date of receipt of CTA decision 13 . Appeal to CTA en banc 15 days from

15 days from CTA final order

14. Appeal to SC

CTA en banc 15 days from CTA final order 14 . Appeal to SC 15 days

15 days from CTA en banc final order

Collection of Deficiency Taxes14 . Appeal to SC 15 days from CTA en banc final order 1 . Administrative

1. Administrative Remedies

1. Tax lien

2. Compromise and abatement

3. Distraint, levy or garnishment

4. Forfeiture

5. Sale

6. Penalties and fines

Surcharge

Surcharge

Surcharge
Surcharge

Interest

Compromise penalty

7. Tax clearance

Interest Compromise penalty 7 . Tax clearance e.g. Distribution of estate assets 8 . Closure of

e.g. Distribution of estate assets

8. Closure of business establishment e.g. "Operation Kandado"

of business establishment e.g. "Operation Kandado " 2 . Judicial Remedies 1 . Civil action 1

2. Judicial Remedies

1. Civil action

1. RTC or MTC

2. CTA

2. Criminal action

1. RTC

2. CTA

Summary of Taxpayer's Remedies Before paymentRTC or MTC 2 . CTA 2 . Criminal action 1 . RTC 2 . CTA

2 . CTA Summary of Taxpayer's Remedies Before payment Tax amnesty DOLE Philippines case: P146 million
Tax amnesty DOLE Philippines case: P146 million tax deficiency (sales and

Tax amnesty DOLE Philippines case: P146 million tax deficiency (sales and

Tax amnesty DOLE Philippines case: P146 million tax deficiency (sales and

income tax) in 1986 covered by an application for tax amnesty in

2008.

Proposed Pacquiao tax amnesty: valid to class or individuals? VAP or EVAP

Proposed Pacquiao tax amnesty: valid to class or individuals? VAP or EVAP

Proposed Pacquiao tax amnesty: valid to class or individuals? VAP or EVAP
Compromise Available when:

Compromise Available when:

Compromise Available when:

1.

A reasonable doubt to the validity of the claim exists "Doubtful assessment"

1 . A reasonable doubt to the validity of the claim exists "Doubtful assessment"
"Jeopardy assessment"

"Jeopardy assessment"

"Jeopardy assessment"
"Jeopardy assessment"
"Jeopardy assessment"

"Naked assessment"

"Best evidence obtainable"

Prima facie correctness of an assessment

2. The financial position of the taxpayer demonstrates a clear inability to pay the assessed tax.

Abatementdemonstrates a clear inability to pay the assessed tax. Tax exemption claim Tax exemption certificate/ruling :

Tax exemption claim Tax exemption certificate/ruling : all entities claiming tax- exempt status under the Constitution and other Tax exemption certificate/ruling: all entities claiming tax- exempt status under the Constitution and other laws should renew their tax-exempt status with the BIR every three years. (RMO No. 20-2013) Background: religious, charitable, educational institutions

Background: religious, charitable, educational institutions St. Paul College of Makati and CEAP case: BIR may
Background: religious, charitable, educational institutions St. Paul College of Makati and CEAP case: BIR may
St. Paul College of Makati and CEAP case: BIR may

St. Paul College of Makati and CEAP case: BIR may

St. Paul College of Makati and CEAP case: BIR may

provide certain documentary requirements to prove taxpayers' qualifications for tax exemption Banks & withholding agents: Requiring banks and withholding agents to demand a "valid, current and subsisting" tax-exemption ruling from their payees. (RMC No. 8-2014)

tax-exemption ruling from their payees. (RMC No. 8-2014) After payment Tax credit Refund Carry over of

After payment

Tax creditruling from their payees. (RMC No. 8-2014) After payment Refund Carry over of excess payment Tax

Refundfrom their payees. (RMC No. 8-2014) After payment Tax credit Carry over of excess payment Tax

Carry over of excess paymentpayees. (RMC No. 8-2014) After payment Tax credit Refund Tax Treaty Relief Penn Philippines case: BIR

Tax Treaty ReliefAfter payment Tax credit Refund Carry over of excess payment Penn Philippines case: BIR cannot impose

Penn Philippines case: BIR cannot impose additional requirements for the availment of privileges arising from a tax treaty. BIR cannot impose additional requirements for the availment of privileges arising from a tax treaty. The 15-day period within which the taxpayer must apply for tax treaty relief is "not enforceable." Sal Oppenheim Jr. & Cie Kommanditgesselshaft Auf Aktien case: the taxpayer is a company which is a resident of Germany. Hence, the dividend payment of PLDT to the taxpayer is subject to the 15% preferential tax rate based on the gross amount of the dividend, pursuant to the Philippines-Germany Tax Treaty. The taxpayer overpaid its tax, then it filed a refund, but it was denied. The BIR required prior approval of an application to avail of tax

its tax, then it filed a refund, but it was denied. The BIR required prior approval

privileges under a tax treaty. SC: the prior approval requirement is not mandatory, invoking the doctrine of automatic enforceability of tax treaties.

the doctrine of automatic enforceability of tax treaties . Adversarial: To question legality of tax law

Adversarial:

To question legality of tax lawof automatic enforceability of tax treaties . Adversarial: 1 . Original action: Rule 63 (Concurrent original

1. Original action:

Rule 63 (Concurrent original jurisdiction: RTC, CA, SC)

Rule 63 (Concurrent original jurisdiction: RTC, CA, SC)

Rule 65 (Concurrent original jurisdiction: RTC, CA, SC)

Rule 65 (Concurrent original jurisdiction: RTC, CA, SC)

2. Appeal:

(Concurrent original jurisdiction: RTC, CA, SC) 2 . Appeal: Rule 45 (Exclusive appellate jurisdiction: SC) To

Rule 45 (Exclusive appellate jurisdiction: SC)

To question legality of BIR rules or regulations2 . Appeal: Rule 45 (Exclusive appellate jurisdiction: SC) 1 . Original action: Rule 63 (Concurrent

1. Original action:

Rule 63 (Concurrent original jurisdiction: RTC, CA, SC) Rule 65 (Concurrent original jurisdiction: RTC, CA, SC)

2. Appeal:

(Concurrent original jurisdiction: RTC, CA, SC) 2 . Appeal: Rule 45 (Exclusive appellate jurisdiction: SC) To

Rule 45 (Exclusive appellate jurisdiction: SC)

To dispute assessment (substantive & procedural)2 . Appeal: Rule 45 (Exclusive appellate jurisdiction: SC) 1 . Administrative procedure LA issuance Audit

1. Administrative procedure LA issuance Audit IC PAN FAN Protest Denial of Protest Administrative appeal to CIR

2. Judicial appeal CIR to CTA division CTA division to CTA en banc CTA en banc to SC

Administrative appeal to CIR 2 . Judicial appeal CIR to CTA division CTA division to CTA
Administrative appeal to CIR 2 . Judicial appeal CIR to CTA division CTA division to CTA
Administrative appeal to CIR 2 . Judicial appeal CIR to CTA division CTA division to CTA
Administrative appeal to CIR 2 . Judicial appeal CIR to CTA division CTA division to CTA
Administrative appeal to CIR 2 . Judicial appeal CIR to CTA division CTA division to CTA
Administrative appeal to CIR 2 . Judicial appeal CIR to CTA division CTA division to CTA
Administrative appeal to CIR 2 . Judicial appeal CIR to CTA division CTA division to CTA
Administrative appeal to CIR 2 . Judicial appeal CIR to CTA division CTA division to CTA
Administrative appeal to CIR 2 . Judicial appeal CIR to CTA division CTA division to CTA
Administrative appeal to CIR 2 . Judicial appeal CIR to CTA division CTA division to CTA
Administrative appeal to CIR 2 . Judicial appeal CIR to CTA division CTA division to CTA