CHAPTER 29

POWERS AND AUTHORITY OF THE COMMISSIONER OF INTERNAL

REVENUE

1. The power to interpret the provision of the Tax Code and other tax laws shall be under the
exclusive and original jurisdiction of the Commissioner of Internal Revenue subject to
review by:
a Secretary of Finance c Court of Appeals
b Court of Tax Appeals d Municipal Courts

2. In ascertaining the correctness of any return, or in making a return when none has been
made, or in determining the liability of any person for any internal revenue tax, or in
collecting any such liability, or in evaluating any tax compliance, the Commissioner is
authorized to do the following, except:
a To examine any book, paper, record, or other data which may be relevant or
material to such inquiry
b To summon the person liable for tax or required to file a return, or any officer of
employee of such person, or any person having possession, custody, or care of the
books of accounts and other accounting records containing entries relating to the
business of a person liable for tax, or any authorized representative at a time and
place specified in the summons and to produce such books, papers, records, or
other data, and to give testimony
c To inquire into bank deposits of taxpayers under investigation for violation under
Tax Code
d None of the choices

3. The power to decide dispute assessments, refunds of internal revenue taxes, fees or other
charges or other matters administered by the BIR is vested in the Commissioner of
Internal Revenue, subject to the exclusive appellate jurisdiction of the:
a Secretary of Finance c Court of Appeals
b Court of Tax Appeals d Municipal Court

4. Which of the following is within the power of the Commissioner to obtain information, to
summon, examine and take testimony of persons?
a To obtain a regular basis from any person other than the person whose internal
revenue tax liability is subject to audit or investigation
b To take such testimony of the person concerned, under oath, as may be material to
such inquiry
 c To cause revenue officer to canvass from time to time of any revenue district or
religion and require after and concerning all tax, and all person owning or having
care, management or possession of any object with respect to which tax is
imposed
d All of the choices

5. Which of the following statements is incorrect?

a After a return has been filed as required under provisions of Tax Code, the
Commissioner or his duly authorized representative may authorize the
examination of any taxpayer and the assessment of the correct amount of tax
b Failure to file a return shall prevent the Commissioner from authorizing the
examination of any taxpayer
c The tax or any deficiency tax so assessed shall be paid upon notice and demand
from the Commissioner or from his duly authorized representative
d Any return, statement or declaration filed in any office authorized to receive the
same shall not be withdrawn

6. First statement:Within three (3) years from the date of filing of any return, statement or
declaration, the same may be modified, change, or amended
Second statement: The modification, change, or amendment to any return, statement or
declaration filed is allowed n notice for audit or investigation of such return, statement or
declaration has in the meantime been actually served upon the taxpayer
a Both statements are correct
b Both statements are incorrect
c Only the first statement is correct
d Only the second statement is correct

7. First statement: When report require by law as a basis for the assessment of any internal
revue tax shall not be forthcoming within the time fixed by laws or rules and regulations
or when there is reason to believe that any such report is false, incorrect or erroneous, the
Commissioner shall assess the proper tax on the best evidence obtainable
Second statement: In case a person fails to file a required return or other document at the
time prescribed by law, or willful or otherwise files a false or fraudulent return or other
document, the Commissioner shall make or amend the return from his own knowledge or
otherwise, which shall be prima facie correct and sufficient for all legal purposes.
a Both statements are correct
b Both statements are incorrect
c Only the first statement is correct
d Only the second statement is correct
8. If there is reason to believe that such person is not declaring his correct income, sales or
receipts for internal revenue taxes purposes, the Commissioner may:
I. Order inventory-taking goods of any taxpayer as a basis for determining his
internal revenue tax liabilities
II. May place the business operations of any person, natural or juridical, under
observation or surveillance
a Neither I nor II c I only
b Either I or II d II only

9. The Commissioner, after taking into account the sales, receipts, income or other taxable
base of other persons engaged in similar business under similar situations or
circumstances or after considering other relevant information may prescribed a minimum
amount of such gross receipts, sales and taxable base, and such amount so prescribed
shall be prima facie correct for purposes of determining the internal revenue tax liabilities
of such person when:
I. It is found that the person has failed to issue receipts and invoices in violation in
the requirements of Section 113 and 237 of this Code
II. There is a reason to believe that the books of accounts or other records do not
correctly reflect the declarations made or to be made in a return required to be
filed under the provisions of the Tax Code
a Either I or II c I only
b Neither I nor II d II only

10. Which of the following is not within the Commissioner’s authority to terminate taxable
period?
a When the taxpayer is retiring from business subject to tax
b When the taxpayer is intending to leave the Philippines or remove his property
therefrom
c When the taxpayer is performing any act tending to obstruct the proceeding for
collection of the tax for the past or current year or quarter
d When the taxpayer’s business is suffering losses

11. First statement: The Commissioner is hereby authorized to divide the Philippines into
different zones or areas and shall, upon consultation with competent appraisers both from
the private and public sectors, determine the fair market value of real properties located
in each zone area.
Second statement: For purposes of computing any internal revenue tax, the value of the
property shall be, whichever is the higher of (1) the fair market value of the property
as determined by the Commissioner, or (2) the fair market value as shown in the schedule
of values of the Provincial and City Assessors
 a Both statements are correct
b Both statements are incorrect
c Only the first statement is correct
d Only the second statement is correct

12. Notwithstanding any contrary provision of R.A. No 1405 and other general or special
laws, the Commissioner of Internal Revenue is authorized to inquire into bank deposit:
Case 1 – of a decedent to determine his gross estate
Case 2 – of any taxpayer who has filed an application for compromise of his tax liability
by reason of financial incapacity provided there is waiver of his privilege under
R.A. No. 1405 or under other general or special laws.
a True in both cases
b False in both cases
c True only in the first case
d True only in the second case

13. Which of the following statements is incorrect?

a The commissioner shall accredit and register, based on their professional
competence, integrity and moral fitness, individuals and general professional
partnership and their representatives who prepare and file tax returns, statements,
eports, protests, and other papers with or who appear before, the Bureau for
taxpayers.
b Individuals and general professional partnerships and their representatives who
are denied accreditation by the Commissioner and/or the national regional
accreditation boards may appeal such denial to the Secretary of Finance, who
shall rule on the appeal within sixty (60) days from receipt of such appeal.
c Failure of the Secretary of Finance to rule on the appeal within the prescribed
period shall be deemed as approval of the application for the accreditation of the
appellant
d Only Certified Public Accountants who practice accountancy singly or in
partnership with other CPAs shall be accredited and registered to file income tax
returns, statements, reports, protest, and other papers with or who appear before,
the Bureau of taxpayers.

14. First statement:The Commissioner may prescribe the manner of compliance with any
documentary or procedural requirement in connection with the submission or preparation
of financial statements accompanying the tax returns
Second statement:The Commissioner may delegate the power to recommend the
promulgation of rules and regulations by the Secretary of Finance
a Both statements are correct
b Both statements are incorrect
c Only the first statement is correct
d Only the second statement is correct
15. Which of the following powers of the Commissioner of internal Revenue may not be
delegated?
a The power to issue rulings of first impression or to reverse, revoke or modify any
existing ruling of the BIR
b The power to compromise or abate any tax liability
c The power to assign or reassign internal revenue officers to established where
articles subject to excise tax are produced or kept
d All of the choices

16. The power to compromise or abate any tax liability not be delegated except:
I. Assessments issued by the regional officers involving basic deficiency taxes of
Five hundred thousand pesos (P500,000) or less.
II. Minor criminal violations.
a Both exceptions are correct
b Both exceptions are incorrect
c Only the first exception is correct
d Only the second exception is correct

17. (Phil. CPA) Which of the following is not under the special power of the Commissioner
to make assessments and prescribe additional requirements for tax administration and
enforcement?
a To make assessment
b To require prior accreditation and registration of persons who may represent
taxpayer with the BIR
c To obtain information, examine, summon and take testimony
d To prescribe fair market value of real property

18. How many are the Deputy Commissioners of the Commissioner of Internal Revenue?
a Three c Five
b Four d. Six