TAXATION LAW REVIEW. Sababan. 2008 ed.

Ppg 181-200
CHAPTER XXI: REMEDIES

month following the close of the

fiscal year.

There are two remedies provided in the NIRC:

1. The remedies of the Government, and
2. The remedies of the taxpayer
A.THE REMEDIES OF THE GOVERNMENT
The Code provides the Government with TWO remedies:
(1) Assessment, and
(2) Collection
2 KINDS OF ASSESSMENT AND COLLECTION:
(a) Normal or ordinary assessment and collection
Sec. 203; and
(b) The Abnormal or extraordinary assessment and
collection Sec. 222
NORMAL OR ORDINARY ASSESSMENT AND COLLECTION
(Sec. 203)
filed by

: available to the Government if there was a return

the taxpayer and such return is not FALSE OR
FRAUDULENT

: Govt may only make the assessment under this

section w/in 3 years after the last day prescribed by law for
the
filing of the return NOT FROM THE TIME OF
PAYMENT.

from

: when the return is filed beyond the period of filing

prescribed by law, the 3year period shall be counted
the day of the filing of the return

2 INSTANCES CONTEMPLATED THIS SECTION:

FIRST
SECOND
the return is filed BEFORE/ AT when the return is filed beyond
THE TIME prescribed by law the period prescribed by law.
w/c is ON OR BEFORE APRIL
15 of each year covering the
income for the preceding taxable
year for those using the calendar
year; (Sec 51 c 1)OR
-- the return is filed
BEFORE/ AT THE TIME
prescribed by law w/c is ON
OR BEFORE the 15th day of the
FOURTH MONTH following the
close of the FISCAL YEAR for
those using the fiscal year (Sec
77B)
PRESCRIPTIVE PERIOD
begins to run from the deadline: begins to run from the time the
April 15 or the 15th day of the 4th return is filed.

Q: Suppose the return for the calendar year 2006 is filed by

the taxpayer on April 10, 2007, when will the prescriptive
period begin to run?
A: the prescriptive period will begin to run AFTER APRIL 15,
2007 the DEADLINE for filing the return for 2006
Q: Suppose the return for 2005 was filed on April 12, 2007,
when will the prescriptive period begin to run?
A: the period will commence from ARPIL 12, 2007.
A careful analysis of the case wouls show that the return was
filed beyond the period for filing the return. The return was for
the calendar year 2005 (thus, the return should have been filed
before April 15, 2006) but only filed in 2007. The return was
filed long AFTER the deadline. Thus, the prescription period
should commence from the date the return is filed APRIL 12,
2007.
Note: for collection, the Code does not provide for a
prescriptive period.
Authors note: the prescriptive period for abnormal
is 5 years from assessment, hence it can be concluded that the
prescriptive period for normal is also 5 years. It will create an
absurd situation where there is no prescriptive period under the
normal but there is a prescriptive period for abnormal. It is more
logical to conclude that the legislature intended to provide a
prescriptive period under the normal collection.
ABNORMAL OR EXTRAORDINARY ASSESSMENT AND
COLLECTION
: resorted to by the Govt in the ff cases: (OFF)
(1) The taxpayer OMITS or FAILS to file his return
(2) The taxpayer FILED a return but the return was
FRAUDULENT
(3) The return filed by the taxpayer was FALSE.
: an error in the return filed by the taxpayer does not
imply fraud or that the same is FALSE.
: legal presumption the return filed is TRUE and
CORRECT. the burden of proof lies in the govt to prove that
such return is fraudulent or false.
2 REMEDIES (options) THIS KIND OF ASSESSMENT AND
COLLECTION:
(1) assess and collect, and
NOTES

TAXATION LAW REVIEW. Sababan. 2008 ed. Ppg 181-200

(2) collection w/o assessment
(1) For assessment and collection prescriptive period is
10years from the DISCOVERY of the non-filing of the return or
the
fraudulent or false return. (Sec 222 a)
from

period for collection prescribes AFTER 5 years

date of FINAL ASSESSMENT (Sec 222 c)

(2) Govt opts to collect w/o assessment there would be NO

PRESCRIPTIVE PERIOD for assessment.
period for collection prescribes within 10years
from the DISCOVERY of the non-filing of the return or the
fraudulent
or false return.

w/in 30days fr receipt of

FAN

Q: Can the BIR just collect w/o assessment?

A: Fortune Tobacco case YES. Since the return filed was
FRAUDULENT, the BIR can avail of the remedy of collection
without assessment. The BIR is allowed to exercise that option.
B.PROCEDURE FOR ASSESSMENT (Sec228; RR No. 12-99
Sec 228 provides for 2 STEPS for ASSESSMENT:
(1) pre-assessment notice; and
(2) final assessment notice
RR No. 12-99 provides for 3 STEPS:
(1) notice of informal conference;
(2) preliminary notice of assessment (PAN);
(3) formal letter of demand and notice to pay the tax
(FAN).
PROCEDURE FOR ASSESSMENT:
w/in 15 days from receipt of notice
W/in 30 days from denial/lapse

W/in 15 days from receipt

15 days upon receipt

of PAN

W/in 15 days from receipt

NOTES

TAXATION LAW REVIEW. Sababan. 2008 ed. Ppg 181-200

(5) When an article locally purchased or
imported by an exempt person, such
as, but not limited to, vehicles, capital
equipment, machineries and spare
parts, has been SOLD, TRADED OR
TRANSFERRED TO NON-EXEMPT
PERSONS.

W/in 15 days from receipt

In the foregoing instances, the taxpayer shall

receive a final assessment notice without the benefit
of a pre-assessment notice.
b. FINAL ASSESSMENT NOTICE (FAN)
from the flowchart, FAN is issued when:
(1) The taxpayer having received a PAN,
fails to respond within the period
provided for by the rules and
regulations (Sec 228, last par)
a. PRE-ASSESSMENT NOTICE (PAN)
As a rule: PAN is issued to a taxpayer
- who fails to file a return, or
- files a return but fails pay the tax,
- pays the tax, but the same is
INSUFFICIENT
CES)

(2) the five instances enumerated Sec

228 where pre-assessment is NOT
necessary.
c. PROTEST
after receipt of FAN, taxpayer immediately
appeal to
the CTA.

Sec 228, when is PAN NOT NECESSARY: (MD

(1) When the finding for deficiency tax is
the result of MATHEMATICAL ERROR
in the computation of the tax
appearing on the face of the return;
(2) When a DISCREPANCY has been
determined between the tax withheld
and the amount actually remitted by
the withholding agent;
(3) When a taxpayer who opted to claim a
refund or tax credit of excess
creditable withholding tax for a taxable
period was determined to have
CARRIED OVER and automatically
applies the same amount claimed
against the estimated tax liabilities for
the taxable quarter or quarters of the
succeeding taxable year;
(4) When the EXCISE TAX DUE on
excisable articles has not been paid;

: BEFORE AN APPEAL, a PROTEST must FIRST be

FILED by the taxpayer.
PROTEST an action disputing the final assessment.
: in accordance w/ the rule in Admin Law - the
exhaustion
of administrative remedies.
w/in

: after filing protest, BIR given a period of 180 days

w/c to decide on the matter.

day

IF MR: the 180-day period is to be committed on the

the protest has been filed.

IF MI: the 180-day period shall be reckoned on the

day the documents or receipts were filed with the 60-day
period of time.
period
appeal
lapse of
FINAL,

: Upon denial of the protest/ lapse of the 180-day

w/o the BIR acting on the protest, the tacpayer may
to the CTA w/in 30days from receipt of the dnial or
the period; otherwise the decision shall become
EXECUTORY and DEMANDABLE.

NOTES

TAXATION LAW REVIEW. Sababan. 2008 ed. Ppg 181-200

Q: If the taxpayer, during the pendency of his protest,
received a notice of an action for collection filed by the
BIR, what is his proper remedy?

(1) SUPPORTING DOCUMENTS NOT filed w/in the

60-day period
(2) Protest NOT filed ON TIME;

A: Yabes v. Flojo + Union Shipping Lines v. Commissioner

SC held that the subsequent filing of a collection suit by the
BIR
may be considered as a denial of the request for
protest, hence, the proper remedy of the taxpayer is to appeal
the
denial to the CTA.

(3) NO APPEAL was filed with the CTA w/in 30days

after the lapse of the 180-day period; and
(4) There was an APPEAL FILED but it was
BEYOND the period to appeal.

d. APPEAL TO THE CTA

if protest is DENIED, in whole or in part;
or the 180-day period has already lapsed w/o the
BIR acting upon the protest
taxpayer may appeal the denial to the CTA w/in
30days from the receipt of the denial or the lapse of the period

C.FORMS OF PROTEST
: Protest is a remedy afforded to the taxpayer in
cases where the BIR issues a final assessment to the
taxpayer .
3 FORMS OF PROTEST AFFORDED TO THE TAXPAYER:

(1) Local Tax

(2) Real Property Tax
(3) Tariff and Customs Code

Q:PENDING APPEAL, can the BIR still amend the final

assessment?
A: 2 VIEWS:
1. Batangas v. Collector SC held that the BIR
may still amend the assessment during the
pendency of the appeal to avoid multiplicity of
suits.
2.

Guerrerro v. Commissioner SC held that BIR

amend the assessment SINCE IT IS NO
LONGER A DISPUTED ASSESSMENT.
Authors Note: favors the first ruling.

e. APPEAL TO THE SC
after appealing to CTA, and after rendering an
unafvorable decision, taxpayer may file a motion for
reconsideration of said decision within 15 dyas from receipt of
the decision of the CTA sitting IN DIVISION.

Banc.

if decision is still UNFAVORABLE, to the CTA En

if CTA EB still renders an unfavourable decision,

taxpayer has remedy to file PETITION FOR CERTIORARI
RULE 65, only on the ground of GRAVE ABUSE OF
DISCRETION amounting to lack/excess of jurisdiction.
SEVERAL INSTANCES WHERE THE FINAL ASSESSMENT
BECOMES FINAL AND EXECUTORY: (SONA)

NB: A 4th may be added ADMIN PROTEST NIRC.

1. PROTEST LOCAL TAX (Sec 195, LGC)
LGC provides: when the local treasurer or his duly
authorized representative finds that correct taxes,
fees, or charges have not been paid, he shall issue a notice
of
assessment stating the nature of the tax, fee, or
charge the
amount of deficiency, the surcharges,
interest and
penalties.
: it is from this assessment that the taxpayer may file
a
protest w/in 60days from receipt of notice of
assessment. If
taxpayer does not file the protest w/in said
period, the
assessment shall become final and
executor.
from

:local treasures shall decide the protest within 60days

its filing. He may either grant/deny the protest.

partly,

that
partly
to the taxpayer

: GRANT if he finds that it is, wholly or

meritorious.
- he shall issue a notice
CANCELING wholly or partly the
assessment.
: DENY wholly/party, if he finds
the assessment is wholly or
CORRECT, w/ NOTICE

NOTES

TAXATION LAW REVIEW. Sababan. 2008 ed. Ppg 181-200

of
appeal
appeal to
SC.

: the taxpayer is given a period of 30days from receipt

denial or the lapse of the 60-day period, w/in w/c to
to the court of competent jurisdiction RTC.
: RTC renders unfavourable decision, TP may
CTA EN BANC is still unfavourable

SECOND SITUATION TCC:

: importer prevails over the government.
: in this case, there will be an AUTOMATIC REVIEW
w/n 5days.
: AUTOMATIC REVIEW shall be filed before
1. SEC of FINANCE if value of commodity = P5M
or
2. Office of Commr if value of commodity is <
P5M

2. PROTEST REAL PROPERTY TAX (Secs 226, 230, 252

LGC)
: made by a TP who is not satisfied with the action of the
provincial, city or municipal assessor in the assessment of his
property.
written

Sec

: TP may, w/in 60days from date of receipt of the

notice of assessment, appeal to the Local Board of
Assessment Appeals (LBAA) of the province or city.
: BEFORE THIS PROTEST MAY BE ENTERTAINED,
252 LGC requires TP FIRST PAYS THE TAX.
(PAYMENT UNDER PROTEST)

: Protest may only be filed w/in 30 days from the

payment of the tax. (the words paid under protest shall be
annotated on the tax receipt)
: LBAA shall decide w/in 120 days from receipt of the
appeal. The Board after hearing, shall render a
decision based on substantial evidence.
: LBAA- renders unfavourable decision, TP may
appeal to
the Central Board of Assessment
Appeals (CBAA) if
still unfavourable CTA then to
SC.
3. PROTEST THE TARIFF AND CUSTOMS CODE (Sec
2313, as amdd by RA No. 7651)
: appeals TCC include those requests for protests as well as
for FORFEITURES.
FIRST SITUATION TCC:
: if importer loses his case, remedy = APPEAL w/in
15
days OFFICE OF THE COMMISSIONER
to
of the

: Commr rules for the Govt importer may file appeal

the CTA sitting IN DIVISION w/in 30 days from recipt
decision.

before

: CTA for Govt importer to file MR before the same

division w/in 15days still unfavourable appeal
the CTA En Banc.

days

: CTA EB still unfavourable, importer appeal w/in 15

from receipt of decision SC

: in 2 above, the Commr is given a period of 30dyas w/in w/c to

decide.
: if Commr REVERSES the ruling, he rules for the
Govt,
this decision shall become FINAL AND
EXECUTORY.
: if Commr AFFIRMS the Collector/ does not render
a
decision w/in 30-day period, then AUTOMATIC
REVIEW before the Sec of Finance.
if
CTA.
of

: from this Atutomatic Review the decision of the Sec

unfavourable to importer-TP, shall be appealable to
( what is appealable is the Secs decision from AR
Commrs decision RA 9282.)
D. COMPROMISE

Commr may compromise payment of any internal revenue tax

2 INSTANCES:
(1) When a reasonable doubt exists as to the
validity of the claim the TP
(2) When the financial position of the TP
demonstrates a clear inability to pay the
assessed tax.
Q: May the govt compromise both criminal and civil
cases? Suppose the civil case is already final and
executory, can it still be subject to compromise?
A: in civil cases, the govt may compromise the liability of the TP
at ANY STAGE of the proceeding except when the case is
already final and executory. In this case, if the govt would allow
a compromise even if the case is already final and executory,
the doctrine of separation of powers will be violated.
In criminal cases, compromise is allowed except if the criminal
case is already filed before the RTC or if the case involves
fraud.
NOTES

TAXATION LAW REVIEW. Sababan. 2008 ed. Ppg 181-200

Q: Suppose the corporation is already dissolved, can the
stockholder still be compelled to pay the tax liability?
A: GR: NO.
2 EXECEPTIONS: (1) there is evidence to prove that
the assets of the corporation were taken by the SH; or (2) if the
SH has unpaid subscription.
: the amount to be compromised limited by the Code. For
cases of financial incapacity, the minimum rate shall be
equivalent to 10% of the basic assessed tax. For other cases,
the minimum rate shall be equivalent to 40% of the basic
assessed tax. In other words, the minimum amount to be
assessed shall be:
(1) In cases of financial inacapacity not < 10% of
the original assessment; and
(2) For other cases, not < 40% of the original
assessment.
Q: Is there any instance where the amount assessed is
lower than the limitations provided?
A: GR: the compromised amount should not be lower than the
limitations provided by the Code.
EXC: where the basic tax involved exceeds P1M or where the
settlement offered is less than the prescribed rates, the
compromise shall be subject to the approval of the Evaluation
Board w/c shall be composed of the Commr and 4 Deputy
Commrs.
E. REMEDIES FOR COLLECTION OF DELINQUENT TAXES
(Sec 205))
2 GROUPS OF REMEDIES PROVIDED BY THE CODE:
1. JUDICIAL ACTION:
a. Civil action
b. Criminal action
2. ADMINISTRATIVE ACTION
a. Distraint
b. Levy
c. Tax lien
NB: a determination of whether the final assessment is under
normal/abnormal assessment/collection is material in order to
determine the remedies available to the govt.
or
action,

in case of abnormal, where the return filed is false

fraudulent, the govt may not only avail of judicial
also of levy or distraint.
F. DISTRAINT

1.
2.
3.

Constructive
Distraint of intangible properties
Actual Distraint

(1) CONSTRUCTIVE DISTRAINT (Sec 206)

the Commr may place CD the property of a delinquent TP
or any TP who in his opinion is:
(1) Retiring from any business subject to tax;
(2) Intending to leave the Phils;
(3) Intending to remove his properties in the Phils;
(4) Intending to hide/conceal his property;
(5) Intending to perform any act tending to obstruct
proceedings for collecting tax due/ w/c may be
due to him.
: subject of distraint = PERSONAL PROPERTY OF TP
this is effected by:
(1) Requiring the TP or any person having
possession or control of such property to sign a
receipt covering the property distrained; and
(2) Obligate himself to preserve the same intact and
unaltered and not to dispose of the same in any
manne whatever, w/o the authority of the
Commr.
if TP or person authorized REFUSES/ FAILS to
sign receipt, the revenue officer effecting the CD shall proceed
to prepare a list of such property and in the presence of 2
witnesses, leave a copy thereof in the premises where the
property distrained is located, after w/c the said property shall
be deemed to have been placed CD.
(2) DISTRAINT OF INTANGIBLE PROPERTIES (Sec 208)
Intangible props w/c can be distraint:
- stocks and other securities
- debts and other credits
- bank accounts
How distraint is made:
Stocks and other securities:
: shall be distrained by serving a copy of the warrant
of
distraint upont the tp and upon the president,
manager,
treasurer, or other responsible officer of the
corporation,
company or association, w/c issued the
said stocks or
securities.

3 KINDS OF DISTRAINT:
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TAXATION LAW REVIEW. Sababan. 2008 ed. Ppg 181-200

Debs and other credits:

: shall be distrained by leaving with the person owing
the
debts or having in his possession or under his control
such
credits, or his agent, a copy of the warrant of distraint.

Bank accounts:
: shall be garnished by serving a warrant of
garnishment
upon the tp and upon the president,
manager, treasurer, or
other responsible officer of the
bank.
(3) ACTUAL DISTRAINT (Secs 207 a and 209)
: means that the personal property of the tp is
PHYSICALLY taken by the distraining officer.

the

: w/in 10days from receipt of warrant, a report on the

distraint shall be submitted by the distraining officer to
Revenue District Officer and to the Revenue Regional
Director.
: prop distrained SOLD in PUBLIC AUCTION.

than
distraint
articles
days
and

:209 provides that a notice shall be posted in not less

2 public places in the municipality or city where the
is made, specifying the time and place of sale and
distrained. The time of sale shall not be less than 20
after notice to the owner or possessor of the property
the publication or posting of such notice.

: w/in 2 days after the sale, the officer making the

same
shall make a report of his proceedings in writing to
the
Commr and shall himself preserve a copy of such
report as an official record (Sec 211)
prop

: NO RIGHT OF REDEMPTION in sale of personal

distrained ABSOLUTE RULE

: OWNER has RIGHT OF PRE-EMPTION:

:Sec 210 provides, if at any time prior to the
consummation of the sale all charges are paid to the
officer conducting the sale, the good or effects distrained
shall be restored to the owner.
DURING AUCTION SALE, 2 instances w/c may
happen:
(1) There is a BIDDER but the bid is enough
(2) NO BIDDER/ there is a BIDDER but bid is NOT
enough.
: in (1), when the amount is insufficient to cover the
amount of the liability, Sec217 allows the govt to conduct
further distraint as necessary until the full maount due,
including all expenses, is collected. If theres an excess, such
shall be returned to TP.

: Sec 212 provides for the rule when the amount bid
for the property distraint is equal to the amount of the tax or
is very much less than the acgtual market value of the articles
offered for sale. the Commr/his deputy may purchase the
same in behalf of the Natl Govt for the amount of the taxes,
penalties and costs thereon.
:the govt shall purchaser the property and
thereafter SELL the same in AUCTION. if proceeds are
insufficient, NO FURTHER distraint may be conducted by the
govt.
Nota Bene: Sec 217 is applicable ONLY to the situation where
there is a BIDDER or there is a bidder and the BID is NOT
ENOUGH. In case of any excess, the same shall be returned to
the TP, but shall be remitted to the National Treasury.
G. LEVY
this remedy is applicable to real property
: Sec 207 B : real property may be levied upon, before,
simultaneously or after the distraint of personal property
belonging to the delinquent TP.

How effected:
: by writing upon the certificate, a description of the
property upon w/c levy is made
: at the same time, WRITTEN NOTICE of the levy
shall be MAILED to/ SERVED UPON:
(1) The Register of Deeds of the province or city
where the prop is located; and
(2) Upon the delinquent TP, or if he is ABSENT from
the Phils, to his agent or the manager of the
business in respect to w/c the liability arose, of if
there be none, to the occupant of the property in
question.
: Sec 213 provides: that any time before the day fixed for the
sale, the TP may discontinue all proceedings by paying the
taxes, penalties and interest. RIGHT OF PRE-EMPTION
afforded to TP.
Q: by way of comparison, in the case of levy, is there also
NO RIGHT OF REDEMPTION as in the case of distraint?
A: unlike in cases of distraint, in cases of levy of real prop, the
TP is afforded, NOT ONLY w/ the RIGHT OF PRE-EMPTION
but also the RIGHT OF REDEMPTION as provided in sec 214,
w/c provides:
: that w/in 1 year from the date of sale, the
DQ
TP, or any one for him, shall have the RIGHT OF
NOTES

TAXATION LAW REVIEW. Sababan. 2008 ed. Ppg 181-200

PAYING to the RDO the amount of public taxes, penalties, and
interest thereon from the date of delinquency to the
date of sale xxx, and such payment shall entitle the person
paying to the delivery of the certificate issued to the
purchaser and
a certificate from the said RDO that he has
REDEEMED
the property.
: Sec 216: in case the real prop is levied by the govt,
it shall be SOLD IN PUBLIC AUCTION.
it is required however, that the Commr
shall
give not less than 20days notice before the
sale
and dispotsition of the real prop in public
auction.
The real prop levied may also be sold in a
PRIVATE SALE but this sale is subject to
the
PRIOR APPROVAL of the Sec of Finance.
RESULTS if PROP SOLD in PUBLIC AUCTION:
(1) There is a bidder and the bid is enough; or
(2) NO BIDDER/ there is a bidder but bid is NOT
enough.
:Sec 215: governs the situation where there is NO
bidder.

in case where there is no bidder for real prop

levied and
sold at public auction or if the highest bid is
for an amount
insufficient to pay the tax due,
the Internal Revenue Officer conducting the sale
shall
declare the prop forfeited to the Govt in satisfaction of
the
claim in question and w/in 2 days thereafter, shall
make a return of his proceedings
RD is also mandated by the Code to transfer the title
of prop forfeited to the govt w/o the necessity of an order from a
competent court. the tp is given 1 year from the date of
forfeiture to REDEEM the property. If there is NO
REDEMPTION MADE, forfeiture BECOMES ABSOLUTE!
No further levy is allowed by the code in this case.
In case of (1) above: the rules on distraint of real prop shall be
applicable. If theres still deficiency after the proceeds are
applied to
the tax liability, there SHALL BE FURTHER LEVY on the real
props of the tp.
In case of (2) above, the property is FORFEITED by the govt.
(in contrast, in cases of distraint, the prop shall be
PURCHASED by the govt)
Q:What is the implication of this difference?
A: in case the prop is forfeited, the TITLE TO THE PROP IS
AUTOMATICALLY TRANSFERRED TO THE GOVT AFTER
REGISTRATION OF SUCH FORFEITURE WITH THE RD;

While in cases of distraint, where the prop is PURCHASED by

the govt, the TITLE TO THE PROP IS NOT AUTOMATICALLY
REGISTERED IN THE NAME OF THE GOVT.
H. INJUNCTION (Sec 218)
: refers to a PROHIBITORY INJUNCTION the purpose is to
restrain the collection of any National Internal Revenue tax,
fee, or charge.
:218 prohibits any court to have any authority to grant
an injunction for the purpose abovementioned.
: the prohibition shall be applied to taxes other than
those mentioned in the NIRC.
CTA given authority to issue writs of injunction.
RAs 1125 and 9282, the CTA is allowed to isse
writs of injunctions provided the contested tax is the NIRC.
I. TAX LIEN (Sec 219)
in cases where the TP neglects / refuses to pay
an internal revenue tax, the amount due shall constitute as a
lien in favor of the govt from the time the assessment was
made until payment thereof is made.
proviso : the lien constituted shall NOT BE VALID
any mortgagee, purchaser or judgment creditor until the
notice of such lien is filed by the Commr to the Office of the RD
of the province / city where the prop of the tp is situated or
located. before such lien can affect the rights of the
mortgagee or purchases of such property, the lien shall FIRST
be registered with the Office of the Reigster of Deeds.
Q: Suppose the govt levied a parcel of land w/c is being
foreclosed by the mortgagee. Which of the two shall be
preferred?
A: IT DEPENDS. Before the right of a mortgagee is affected,
the lien created must FIRST be registered with the Office of the
Register of
Deeds in this case, the govt shall be preferred; otherwise, it is
the mortgagee who will prevail over the government.
J. APPROVAL OF THE COMMISSIONER (Sec 220)
BEFORE an action, civil or criminal, may be filed
in court, the Commissioner must FIRST APPROVE such filing
of the action.
: the action or proceeding must be instituted the
name of the Govt of the Philippines.

NOTES

TAXATION LAW REVIEW. Sababan. 2008 ed. Ppg 181-200

Sec 220 + Sec 7 sec7 provides that the Commr
may delegate the powers vested in him under the Code to any
or such subordinate official with the rank equivalent to a
division chief or higher.
POWERS of the COMMR w/c be DELEGATED (RICA):
(1) The power to RECOMMEND the promulgation of
rules and regulation by the Sec of Finance
(2) The power to ISSUE rulings of first impression
or to reverse, revoke or modify any existing
ruling of the Bureau;
(3) The power to COMPROMISE or ABTE sec
204 A and B of the Code, any tax liability; and
(4) The power to ASSIGN or REASSIGN internal
revenue officers to establishments where articles
subject to excise tax are produced or kept.
Sec 4 adds: the Commr has the exclusive and
original jurisdiction to interpret the provisions of the NIRC,
subject to review by the Sec of Finance.
: said sec, the Commr has the power to DECIDE
disputed assessment, refunds of internal revenue taxes, fees or
charges, penalties imposed in relation thereto, or other matters
arising the NIRC or other laws or portions thereof
administered by the BIR. this decision is subject to the
exclusive appellate jurisdiction of the CTA.
K. SUSPENSION OF THE RUNNING OF STATUTE OF
LIMITATIONS (Sec 223)
: the periods 203 and 222 shall be SUSPENDED
for the following reasons:
(1) When
the TP REQUESTS
for a
REINVESTIGATION w/c is GRANTED by the
Commr.
(2) When the TP be LOCATED in the address
given by him in the return filed upon w/c a tax is
being assessed or collected, PROVIDED that
if the TP informs the Commr of any change in
address, the running of the statute of limitations
will NOT BE SUSPENDED.
(3) When the warrant or distraint or levy is DULY
SERVED upon the TP, his authorized rep or a
mem of his household with sufficient discretion,
and no prop could be located; and
(4) When the tp is OUT of the country.

Q: after 15 years, A, a Filipino tp, went back to the Phils.

The BIR assessed him the normal assessment. Has the
action prescribed?
A: NO. the running of the prescriptive period shall be
suspended when he is out of the country. the tp, for 15 years
was out of the country, suspension is AUTOMATIC in this case.
The action has not yet prescribed.
L. CLAIM FOR REFUND (Sec 229)
claim or refund shall first be filed before the
Commr BEFORE a suit or proceeding shall be maintained in
any court for the recovery of any national internal revenue tax
alleged to have been erroneously or illegally assessed or
collected, or of any penalty claimed to have been collected w/o
authority, or of any sum alleged to have been excessively, or in
any manner wrongfully, collected.
: the suit/proceeding shall be filed after the expiration
of 2 years from the payment of the tax. However, the Code
further provides that the Commr may, although there is no
written claim for refund or credit filed by the tp, refund or credit
any tax, if upon the face of the return upon w/c payment was
made, such payment appears clearly to have been erroneously
made.
HOW TO DETERMINE PERIOD IN COMPUTING TAX
REFUND:
TP classified into INDIVIDUAL and CORPORATIONS.
INDIVIDUAL: reckoning period should be on the day
the tax has been paid.
if paying the withholding tax system: the period
shall start at the end of the taxable year.
if paying by way of installment: the period shall be
reckoned on the date of the last instalment.
for tps subjected to distraint/levy: if prop was sold
in public auction, the date the proceeds were applied for the
satisfaction of the tax liability shall be considered.
CORPORATE TPS 2 groups are also considered:
the EXISTING and NON-EXISTING CORPOS.
EXISTING
NON-EXISTING
2-yr period starts to run from the 2-yr period commences from the
day the annual adjusted return is day the annual return is filed. For
filed since it is only from this these types of corpos, upon
time that the tax liability can be receipt of the notice from SEC of
correctly determined.
the dissolution of the corpo, a
return should be filed after 30
days. The dissolved corpo is not
required to wait for the end of the
taxable year to file the return.

NOTES

TAXATION LAW REVIEW. Sababan. 2008 ed. Ppg 181-200

2-YEAR PERIOD IS ABSOLUTE.

if there are only 21 days remaining in the 2-year

period and the BIR denied the claim, tp has only 21 days
w/in w/c to file his appeal.

: even if theres a supervening event w/c could

prevent the
tp from filing a written claim for
refund/credit, the claim
should still be filed w/in the 2-year
period.

EXCEPTION Sec 204 C: a return filed showing an

OVERPAYMENT shall be considered as a written claim for
refund. in that case, no written claim for refund or credit is
required to be filed.

BUT if the Commr has not yet acted on the claim and
the
2yr period is abpout to expire, tps remedy = file
appeal with CTA sitting in DIVISION. The inaction of the
Commr can be considered a DENIAL.

:In cases of written claim for refund or credit in

determining
the gross value of the estate, the Commr
may open the
bank account of the tp. written consent is
NOT
REQUIRED. But in cases of compromise 204 A,
written consent is required for the Commr to inquire into the
bank
account of the tp.

: if BIR
remedy =
denial. NOTE
THE 2-YEAR

denies the claim w/in the 2yr period, tps

file appeal with CTA w/in 30days from the
that such 30-day period MUST BE WITHIN
PERIOD.

NOTES