MARCOS II v.
Court of Appeals and void for disregarding the established procedure for the
June 5, 1997 | Torres, Jr. J. | Rule 75 | Settlement of Estate of Deceased
Persons
SUMMARY: The BIR issued several tax deficiency assessments against the
estate of Marcos and then levied on several properties to satisfy said tax
deficiencies. Marcos seeks to nullify the assessments and levy saying that
the same was done without the cognition of the probate court. He further
alleges that any claim against the estate should be brought to the probate
court who should order the payment of the taxes to the administrator.
DOCTRINE: The approval of the court, sitting in probate or as a settlement
tribunal over the deceased is not a mandatory requirement in the
collection of estate taxes.
FACTS:
Marcos died on September 1989. In June 1990, a special tax audit team
was created for the purpose of conducting investigations and examinations
of tax liabilities of former president Marcos. Upon the conclusion of their
investigation, they issued a memorandum in 1991 stating that the
Marcoses failed to file several tax returns from 1982-86 and a written
notice of death in violation of the National Internal Revenue Code.
Criminal charges were filed against Imelda Marcos and the Commission on
Internal Revenue (CIR) caused the preparation of the Income Tax Return of
the Marcoses. The BIR then issued several deficiency tax assessments. The
CIR claimed that these were personally and constructively received
delivered to the Marcoses but these that the deficiency tax assessments
were not protested administratively within the 30 days following receipt of
assessments.
From February to May 19993, the BIR issued numerous notices of levy on
real properties of the Marcoses.
Ferdinand Marcos II, eldest son of former President Marcos filed a petition
for certiorari and prohibition with an application for writ of preliminary
injunction, questioning the actuations of the Commission on Internal
Revenue in assessing and collecting through the summary remedy of Levy
on Real Properties, estate and income tax delinquencies upon the estate
and properties of former President Marcos despite the pendency of the
probate proceedings on the will of the formers father. He prayed for the (1)
annulment and setting aside of notices on levy of real property (2)
enjoining the Head Revenue Executive Assistant from proceeding with the
auction of the real properties covered by the said notices.
CA: Denied the petition as the deficiency assessments on the sale have
become final and unappealable, therefore enforceable by the summary
remedy of levy.
Arguments of the Petitioner (Marcos II):
(1) The notices of levy, notices of sale, and subsequent sale of
properties of the late President Marcos effected by the BIR are null
enforcement of taxes due upon the estate of the deceased which
was for the claimant to present the claim before the probate court
so that the court may order the administrator to pay.
(2) "the numerous pending court cases questioning the late
president's ownership or interests in several properties (both real
and personal) make the total value of his estate, and the
consequent estate tax due, incapable of exact pecuniary
determination at this time. Thus, respondents' assessment of the
estate tax and their issuance of the Notices of Levy and sale are
premature and oppressive."
Argument of BIR:
(1) The states authority to collect internal revenue taxes is
paramount. Thus, the pendency of probate proceedings over the
estate of the deceased does not preclude the assessment and
collection, through summary remedies, of estate taxes over the
same.
Issues:
1. Whether or not the BIR has authority to collect by the summary
remedy of levying upon, and sale of real properties of the
decedent, estate tax deficiencies, without the cognition and
authority of the court sitting in probate over the supposed will of
the deceased. YES.
RATIO:
The approval of the court, sitting in probate, or as a settlement tribunal
over the deceased is not a mandatory requirement in the collection
of estate taxes. There is nothing in the tax code, and in the pertinent
remedial laws that implies the necessity of the probate or estate
settlement courts approval of the states claim for the estate taxes, before
the same can be enforced and collected. If there is any issue as to the
validity of the BIRs decision to assess the estate taxes, this should have
been pursued through the proper administrative and judicial avenues
provided for by law.
Even an assessment based on the estimate is prima facie valid and lawful
where it does not appear to have been arrived at arbitrarily or capriciously.
The burden of proof is upon the complaining party to show clearly that the
assessment is erroneous.
Moreover, the payment and assessment of inheritance tax does not
directly involve the administration of the decedents estate although it may
be viewed as an incident to the complete settlement of an estate, and
under some statutes, it is made the duty of the probate court to make the
amount of the inheritance tax a part of the final decree of distribution of
the estate. It is not against the property of decedent, nor it is a claim
against the estate as much, but it is against the interest or property right
which the heir has in the property formerly held by decedent.
Petition denied and CA decision is affirmed.