How assessment must be done:

a. If no tax return was filed

(Section 6(A), 222(a) of the NIRC, as amended);

SEC. 6. Power of the Commissioner to Make Assessments and

Prescribe Additional Requirements for Tax Administration and
Enforcement. -

(A) Examination of Return and Determination of Tax Due. After a return

has been filed as required under the provisions of this Code, the Commissioner
or his duly authorized representative may authorize the examination of any
taxpayer and the assessment of the correct amount of tax: Provided, however,
That failure to file a return shall not prevent the Commissioner from
authorizing the examination of any taxpayer.

The tax or any deficiency tax so assessed shall be paid upon notice and
demand from the Commissioner or from his duly authorized representative.

Any return, statement of declaration filed in any office authorized to receive

the same shall not be withdrawn: Provided, That within three (3) years from
the date of such filing, the same may be modified, changed, or amended:
Provided, further, That no notice for audit or investigation of such return,
statement or declaration has in the meantime been actually served upon the
taxpayer.

If a tax return was filed but self-assessed taxes were not paid?
If a tax return was filed and self-assessed taxes were paid (Section 228 of
the NIRC, as amended; RR No. 18-2013 and RR No. 7-2018):

SEC. 228. Protesting of Assessment. - When the Commissioner or his duly

authorized representative finds that proper taxes should be assessed, he shall
first notify the taxpayer of his findings: Provided, however, That a pre-
assessment notice shall not be required in the following cases:

(a) When the finding for any deficiency tax is the result of mathematical error
in the computation of the tax as appearing on the face of the return; or

(b) When a discrepancy has been determined between the tax withheld and
the amount actually remitted by the withholding agent; or

(c) 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 applied the same amount claimed against the
estimated tax liabilities for the taxable quarter or quarters of the succeeding
taxable year; or

(d) When the excise tax due on excisable articles has not been paid; or

(e) When the 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.

The taxpayers shall be informed in writing of the law and the facts on which
the assessment is made; otherwise, the assessment shall be void.

Within a period to be prescribed by implementing rules and regulations, the

taxpayer shall be required to respond to said notice. If the taxpayer fails to
respond, the Commissioner or his duly authorized representative shall issue
an assessment based on his findings.

Such assessment may be protested administratively by filing a request for

reconsideration or reinvestigation within thirty (30) days from receipt of the
assessment in such form and manner as may be prescribed by implementing
rules and regulations. Within sixty (60) days from filing of the protest, all
relevant supporting documents shall have been submitted; otherwise, the
assessment shall become final.

If the protest is denied in whole or in part, or is not acted upon within one
hundred eighty (180) days from submission of documents, the taxpayer
adversely affected by the decision or inaction may appeal to the Court of Tax
Appeals within thirty (30) days from receipt of the said decision, or from the
lapse of one hundred eighty (180)-day period; otherwise, the decision shall
become final, executory and demandable.

REVENUE REGULATIONS NO. 18-2013 issued on November 28, 2013

amends certain sections of Revenue Regulations (RR) No. 12-99 relative to
the due process requirement in the issuance of a deficiency tax assessment.

Section 3 of RR No. 12-99 was amended by deleting Section 3.1.1 thereof,

which provides for the preparation of a Notice of Informal Conference, thereby
renumbering other provisions thereof, and prescribing other provisions for the
assessment of tax liabilities.

If after review and evaluation by the Commissioner or his duly authorized

representative, as the case may be, it is determined that there exists sufficient
basis to assess the taxpayer for any deficiency tax or taxes, the said office
shall issue to the taxpayer a Preliminary Assessment Notice (PAN) for the
proposed assessment. It shall show in detail the facts and the law, rules and
regulations, or jurisprudence on which the proposed assessment is based.

If the taxpayer fails to respond within 15 days from date of receipt of the PAN,
he shall be considered in default, in which case, a Formal Letter of Demand
and Final Assessment Notice (FLD/FAN) shall be issued calling for payment of
the taxpayer's deficiency tax liability, inclusive of the applicable penalties.

If the taxpayer, within 15 days from date of receipt of the PAN, responds that
he/it disagrees with the findings of deficiency tax or taxes, an FLD/FAN shall
be issued within 15 days from filing/submission of the taxpayer’s response,
calling for payment of the taxpayer's deficiency tax liability, inclusive of the
applicable penalties.

Pursuant to Section 228 of the Tax Code, as amended, a PAN shall not be
required in any of the following cases:

a. When the finding for any deficiency tax is the result of mathematical error
in the computation of the tax appearing on the face of the tax return filed by
the taxpayer; or

b. When a discrepancy has been determined between the tax withheld and
the amount actually remitted by the withholding agent; or

c. 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 applied the same amount claimed against the
estimated tax liabilities for the taxable quarter or quarters of the succeeding
taxable year; or

d. When the Excise Tax due on excisable articles has not been paid; or

e. 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.

In the above-cited cases, a FLD/FAN shall be issued outright by the

Commissioner or his duly authorized representative. The FLD/FAN calling for
payment of the taxpayer's deficiency tax or taxes shall state the facts, the
law, rules and regulations, or jurisprudence on which the assessment is based;
otherwise, the assessment shall be void.

The taxpayer or its authorized representative or tax agent may protest

administratively against the aforesaid FLD/FAN within 30 days from date of
receipt thereof.

The taxpayer protesting an assessment may file a written request for

reconsideration or reinvestigation, which was defined in the Regulations.

The taxpayer shall state in his protest

(i) the nature of protest, whether reconsideration or reinvestigation,

specifying newly discovered or additional evidence he intends to present if it
is a request for reinvestigation;

(ii) date of the assessment notice; and

(iii) the applicable law, rules and regulations, or jurisprudence on which his
protest is based; otherwise, his protest shall be considered void and without
force and effect.

If there are several issues involved in the FLD/FAN but the taxpayer only
disputes or protests against the validity of some of the issues raised, the
assessment attributable to the undisputed issue or issues shall become final,
executory and demandable.

The taxpayer shall then be required to pay the deficiency tax or taxes
attributable thereto, in which case, a collection letter shall be issued to the
taxpayer calling for payment of the said deficiency tax or taxes, inclusive of
the applicable surcharge and/or interest.

If there are several issues involved in the disputed assessment and the
taxpayer fails to state the facts, the applicable law, rules and regulations, or
jurisprudence in support of his protest against some of the several issues on
which the assessment is based, the same shall be considered undisputed issue
or issues, in which case, the assessment attributable thereto shall become
final, executory and demandable.

The taxpayer shall then be required to pay the deficiency tax or taxes
attributable thereto and a collection letter shall be issued to the taxpayer
calling for payment of the said deficiency tax, inclusive of the applicable
surcharge and/or interest.

For requests for reinvestigation, the taxpayer shall submit all relevant
supporting documents in support of his protest within 60 days from date of
filing of his letter of protest, otherwise, the assessment shall become final.
The 60-day period for the submission of all relevant supporting documents
shall not apply to requests for reconsideration.

The term “the assessment shall become final” shall mean the taxpayer is
barred from disputing the correctness of the issued assessment by
introduction of newly discovered or additional evidence, and the FDDA shall
consequently be denied.

If the taxpayer fails to file a valid protest against the FLD/FAN within 30 days
from date of receipt thereof, the assessment shall become final, executory
and demandable. No request for reconsideration or reinvestigation shall be
granted on tax assessments that have already become final, executory and
demandable.

If the protest is denied, in whole or in part, by the Commissioner’s duly

authorized representative, the taxpayer may either:

(i) appeal to the Court of Tax Appeals (CTA) within 30 days from date of
receipt of the said decision; or

(ii) elevate his protest through request for reconsideration to the

Commissioner within 30 days from date of receipt of the said decision. No
request for reinvestigation shall be allowed in administrative appeal and only
issues raised in the decision of the Commissioner’s duly authorized
representative shall be entertained by the Commissioner.

If the protest is not acted upon by the Commissioner’s duly authorized

representative within 180 days counted from the date of filing of the protest
in case of a request reconsideration; or from date of submission by the
taxpayer of the required documents within 60 days from the date of filing of
the protest in case of a request for reinvestigation, the taxpayer may either:

(i) appeal to the CTA within 30 days after the expiration of the 180-day period;
or

(ii) await the final decision of the Commissioner’s duly authorized

representative on the disputed assessment.

If the protest or administrative appeal, as the case may be, is denied, in whole
or in part, by the Commissioner, the taxpayer may appeal to the CTA within
30 days from date of receipt of the said decision. Otherwise, the assessment
shall become final, executory and demandable.

A motion for reconsideration of the Commissioner’s denial of the protest or

administrative appeal, as the case may be, shall not toll the 30-day period to
appeal to the CTA.

If the protest or administrative appeal is not acted upon by the Commissioner

within 180 days counted from the date of filing of the protest, the taxpayer
may either:

(i) appeal to the CTA within 30 days from after the expiration of the 180-day
period; or

(ii) await the final decision of the Commissioner on the disputed assessment
and appeal such final decision to the CTA 30 days after the receipt of a copy
of such decision. It must be emphasized, however, that in case of inaction on
protested assessment within the 180-day period, the option of the taxpayer
to either: (1) file a petition for review with the CTA within 30 days after the
expiration of the 180-day period; or (2) await the final decision of the
Commissioner or his duly authorized representative on the disputed
assessment and appeal such final decision to the CTA within 30 days after the
receipt of a copy of such decision, are mutually exclusive and the resort to
one bars the application of the other.

The decision of the Commissioner or his duly authorized representative shall

state the

(i) facts, the applicable law, rules and regulations, or jurisprudence on which
such decision is based; otherwise, the decision shall be void, and

(ii) that the same is his final decision.

The notice (PAN/FLD/FAN/FDDA) to the taxpayer herein required may be

served by the Commissioner or his duly authorized representative through
several modes specified in the Regulations.

Section 5 of RR No. 12-99 was amended by modifying Section 5.5 thereof

which provides for modes of procedures in computing for the tax and/or
applicable surcharge.

In cases of late payment of a deficiency tax assessed, the taxpayer shall be

liable for the delinquency interest provided under Section 249 (C)(3) of the
1997 National Internal Revenue Code, as amended.

Section 5.5 of RR No. 12-99 shall now read as follows: “5.5 Late payment of
a deficiency tax assessed. – In general, the deficiency tax assessed shall be
paid by the taxpayer within the time prescribed in the notice and demand,
otherwise, such taxpayer shall be liable for the delinquency interest incident
to late payment.”

REVENUE REGULATIONS NO. 7-2018 issued on January 31, 2018 amends

certain sections of Revenue Regulations (RR) No. 12-99, as amended by RR
No. 18-13, relative to the due process requirement in the issuance of a
deficiency tax assessment.

The Revenue Officer (RO) who audited the taxpayer’s records shall, among
others, state in his report whether or not the taxpayer agrees with his findings
that the taxpayer is liable for deficiency tax or taxes.

If the taxpayer is not amenable, based on the said Officer’s submitted report
of investigation, the taxpayer shall be informed, in writing, by the Revenue
District Office (RDO) or by the Special Investigation Division (SID), as the
case may be (in the case of Revenue Regional Offices) or by the Chief of
Division concerned (in case of the BIR National Office) of the discrepancy or
discrepancies in the taxpayer’s payment of his internal revenue taxes, for the
purpose of “Informal Conference,” in order to afford the taxpayer with an
opportunity to present his side of the case.

The Informal Conference shall, in no case, extend beyond thirty (30) days
from receipt of the notice for informal conference.

If it is found that the taxpayer is still liable for deficiency tax or taxes after
presenting his side, and the taxpayer is not amenable, the RDO or the Chief,
SID of the Revenue Regional Office, or the Chief of Division in the National
Office, as the case may be, shall endorse the case within seven (7) days from
the conclusion of the Informal Conference to the Assessment Division of the
Revenue Regional Office or to the Commissioner or his duly authorized
representative for issuance of a deficiency tax assessment.

Failure on the part of ROs to comply with the prescribed periods shall be meted
with penalty as provided by existing laws, rules and regulations.

Examination of a taxpayer (Section 6(A), 10, and 13 of the NIRC, as

amended); Letter of Authority

SEC. 6. Power of the Commissioner to Make Assessments and Prescribe

Additional Requirements for Tax Administration and Enforcement. -

(A) Examination of Return and Determination of Tax Due. After a return has been filed
as required under the provisions of this Code, the Commissioner or his duly authorized
representative may authorize the examination of any taxpayer and the assessment of the
correct amount of tax: Provided, however, That failure to file a return shall not prevent the
Commissioner from authorizing the examination of any taxpayer.

The tax or any deficiency tax so assessed shall be paid upon notice and demand from
the Commissioner or from his duly authorized representative.

Any return, statement of declaration filed in any office authorized to receive the same
shall not be withdrawn: Provided, That within three (3) years from the date of such filing,
the same may be modified, changed, or amended: Provided, further, That no notice for
audit or investigation of such return, statement or declaration has in the meantime been
actually served upon the taxpayer.

SEC. 10. Revenue Regional Director. - Under rules and regulations, policies and
standards formulated by the Commissioner, with the approval of the Secretary of Finance,
the Revenue Regional director shall, within the region and district offices under his
jurisdiction, among others:

(a) Implement laws, policies, plans, programs, rules and regulations of the department
or agencies in the regional area;
(b) Administer and enforce internal revenue laws, and rules and regulations, including
the assessment and collection of all internal revenue taxes, charges and fees;
(c) Issue Letters of authority for the examination of taxpayers within the region;
(d) Provide economical, efficient and effective service to the people in the area;
(e) Coordinate with regional offices or other departments, bureaus and agencies in the
area;
(f) Coordinate with local government units in the area;
(g) Exercise control and supervision over the officers and employees within the region;
and
(h) Perform such other functions as may be provided by law and as may be delegated
by the Commissioner.

SEC. 13. Authority of a Revenue Officer. - Subject to the rules and

regulations to be prescribed by the Secretary of Finance, upon
recommendation of the Commissioner, a Revenue Officer assigned to perform
assessment functions in any district may, pursuant to a Letter of Authority
issued by the Revenue Regional Director, examine taxpayers within the
jurisdiction of the district in order to collect the correct amount of tax, or to
recommend the assessment of any deficiency tax due in the same manner
that the said acts could have been performed by the Revenue Regional
Director himself.
Notice of Informal Conference (Section 3, RR No. 18-2013) – Corresponding
recourse of Taxpayer;

REVENUE REGULATIONS NO. 18-2013 issued on November 28, 2013

amends certain sections of Revenue Regulations (RR) No. 12-99 relative to
the due process requirement in the issuance of a deficiency tax assessment.

Section 3 of RR No. 12-99 was amended by deleting Section 3.1.1 thereof,

which provides for the preparation of a Notice of Informal Conference, thereby
renumbering other provisions thereof, and prescribing other provisions for the
assessment of tax liabilities.

If after review and evaluation by the Commissioner or his duly authorized

representative, as the case may be, it is determined that there exists sufficient
basis to assess the taxpayer for any deficiency tax or taxes, the said office
shall issue to the taxpayer a Preliminary Assessment Notice (PAN) for the
proposed assessment. It shall show in detail the facts and the law, rules and
regulations, or jurisprudence on which the proposed assessment is based.

If the taxpayer fails to respond within 15 days from date of receipt of the PAN,
he shall be considered in default, in which case, a Formal Letter of Demand
and Final Assessment Notice (FLD/FAN) shall be issued calling for payment of
the taxpayer's deficiency tax liability, inclusive of the applicable penalties.

If the taxpayer, within 15 days from date of receipt of the PAN, responds that
he/it disagrees with the findings of deficiency tax or taxes, an FLD/FAN shall
be issued within 15 days from filing/submission of the taxpayer’s response,
calling for payment of the taxpayer's deficiency tax liability, inclusive of the
applicable penalties.

Pursuant to Section 228 of the Tax Code, as amended, a PAN shall not be
required in any of the following cases:

a. When the finding for any deficiency tax is the result of mathematical error
in the computation of the tax appearing on the face of the tax return filed by
the taxpayer; or

b. When a discrepancy has been determined between the tax withheld and
the amount actually remitted by the withholding agent; or

c. 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 applied the same amount claimed against the
estimated tax liabilities for the taxable quarter or quarters of the succeeding
taxable year; or

d. When the Excise Tax due on excisable articles has not been paid; or

e. 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.

In the above-cited cases, a FLD/FAN shall be issued outright by the

Commissioner or his duly authorized representative. The FLD/FAN calling for
payment of the taxpayer's deficiency tax or taxes shall state the facts, the
law, rules and regulations, or jurisprudence on which the assessment is based;
otherwise, the assessment shall be void.
The taxpayer or its authorized representative or tax agent may protest
administratively against the aforesaid FLD/FAN within 30 days from date of
receipt thereof.

The taxpayer protesting an assessment may file a written request for

reconsideration or reinvestigation, which was defined in the Regulations.

The taxpayer shall state in his protest

(i) the nature of protest, whether reconsideration or reinvestigation,

specifying newly discovered or additional evidence he intends to present if it
is a request for reinvestigation;

(ii) date of the assessment notice; and

(iii) the applicable law, rules and regulations, or jurisprudence on which his
protest is based; otherwise, his protest shall be considered void and without
force and effect.

If there are several issues involved in the FLD/FAN but the taxpayer only
disputes or protests against the validity of some of the issues raised, the
assessment attributable to the undisputed issue or issues shall become final,
executory and demandable.

The taxpayer shall then be required to pay the deficiency tax or taxes
attributable thereto, in which case, a collection letter shall be issued to the
taxpayer calling for payment of the said deficiency tax or taxes, inclusive of
the applicable surcharge and/or interest.

If there are several issues involved in the disputed assessment and the
taxpayer fails to state the facts, the applicable law, rules and regulations, or
jurisprudence in support of his protest against some of the several issues on
which the assessment is based, the same shall be considered undisputed issue
or issues, in which case, the assessment attributable thereto shall become
final, executory and demandable.

The taxpayer shall then be required to pay the deficiency tax or taxes
attributable thereto and a collection letter shall be issued to the taxpayer
calling for payment of the said deficiency tax, inclusive of the applicable
surcharge and/or interest.

For requests for reinvestigation, the taxpayer shall submit all relevant
supporting documents in support of his protest within 60 days from date of
filing of his letter of protest, otherwise, the assessment shall become final.
The 60-day period for the submission of all relevant supporting documents
shall not apply to requests for reconsideration.

The term “the assessment shall become final” shall mean the taxpayer is
barred from disputing the correctness of the issued assessment by
introduction of newly discovered or additional evidence, and the FDDA shall
consequently be denied.

If the taxpayer fails to file a valid protest against the FLD/FAN within 30 days
from date of receipt thereof, the assessment shall become final, executory
and demandable. No request for reconsideration or reinvestigation shall be
granted on tax assessments that have already become final, executory and
demandable.
If the protest is denied, in whole or in part, by the Commissioner’s duly
authorized representative, the taxpayer may either:

(i) appeal to the Court of Tax Appeals (CTA) within 30 days from date of
receipt of the said decision; or

(ii) elevate his protest through request for reconsideration to the

Commissioner within 30 days from date of receipt of the said decision. No
request for reinvestigation shall be allowed in administrative appeal and only
issues raised in the decision of the Commissioner’s duly authorized
representative shall be entertained by the Commissioner.

If the protest is not acted upon by the Commissioner’s duly authorized

representative within 180 days counted from the date of filing of the protest
in case of a request reconsideration; or from date of submission by the
taxpayer of the required documents within 60 days from the date of filing of
the protest in case of a request for reinvestigation, the taxpayer may either:

(i) appeal to the CTA within 30 days after the expiration of the 180-day period;
or

(ii) await the final decision of the Commissioner’s duly authorized

representative on the disputed assessment.

If the protest or administrative appeal, as the case may be, is denied, in whole
or in part, by the Commissioner, the taxpayer may appeal to the CTA within
30 days from date of receipt of the said decision. Otherwise, the assessment
shall become final, executory and demandable.

A motion for reconsideration of the Commissioner’s denial of the protest or

administrative appeal, as the case may be, shall not toll the 30-day period to
appeal to the CTA.

If the protest or administrative appeal is not acted upon by the Commissioner

within 180 days counted from the date of filing of the protest, the taxpayer
may either:

(i) appeal to the CTA within 30 days from after the expiration of the 180-day
period; or

(ii) await the final decision of the Commissioner on the disputed assessment
and appeal such final decision to the CTA 30 days after the receipt of a copy
of such decision. It must be emphasized, however, that in case of inaction on
protested assessment within the 180-day period, the option of the taxpayer
to either: (1) file a petition for review with the CTA within 30 days after the
expiration of the 180-day period; or (2) await the final decision of the
Commissioner or his duly authorized representative on the disputed
assessment and appeal such final decision to the CTA within 30 days after the
receipt of a copy of such decision, are mutually exclusive and the resort to
one bars the application of the other.

The decision of the Commissioner or his duly authorized representative shall

state the

(i) facts, the applicable law, rules and regulations, or jurisprudence on which
such decision is based; otherwise, the decision shall be void, and

(ii) that the same is his final decision.

The notice (PAN/FLD/FAN/FDDA) to the taxpayer herein required may be
served by the Commissioner or his duly authorized representative through
several modes specified in the Regulations.

Section 5 of RR No. 12-99 was amended by modifying Section 5.5 thereof

which provides for modes of procedures in computing for the tax and/or
applicable surcharge.

In cases of late payment of a deficiency tax assessed, the taxpayer shall be

liable for the delinquency interest provided under Section 249 (C)(3) of the
1997 National Internal Revenue Code, as amended.

Section 5.5 of RR No. 12-99 shall now read as follows: “5.5 Late payment of
a deficiency tax assessed. – In general, the deficiency tax assessed shall be
paid by the taxpayer within the time prescribed in the notice and demand,
otherwise, such taxpayer shall be liable for the delinquency interest incident
to late payment.”

Preliminary Assessment Notice (Section 228 of the NIRC, as amended; Section

3.1.2. RR 18-2013); - Corresponding recourse of taxpayer; Exceptions to
requirement;

REVENUE REGULATIONS NO. 18-2013 issued on November 28, 2013

amends certain sections of Revenue Regulations (RR) No. 12-99 relative to
the due process requirement in the issuance of a deficiency tax assessment.

Section 3 of RR No. 12-99 was amended by deleting Section 3.1.1 thereof,

which provides for the preparation of a Notice of Informal Conference, thereby
renumbering other provisions thereof, and prescribing other provisions for the
assessment of tax liabilities.

If after review and evaluation by the Commissioner or his duly authorized

representative, as the case may be, it is determined that there exists sufficient
basis to assess the taxpayer for any deficiency tax or taxes, the said office
shall issue to the taxpayer a Preliminary Assessment Notice (PAN) for the
proposed assessment. It shall show in detail the facts and the law, rules and
regulations, or jurisprudence on which the proposed assessment is based.

If the taxpayer fails to respond within 15 days from date of receipt of the PAN,
he shall be considered in default, in which case, a Formal Letter of Demand
and Final Assessment Notice (FLD/FAN) shall be issued calling for payment of
the taxpayer's deficiency tax liability, inclusive of the applicable penalties.

If the taxpayer, within 15 days from date of receipt of the PAN, responds that
he/it disagrees with the findings of deficiency tax or taxes, an FLD/FAN shall
be issued within 15 days from filing/submission of the taxpayer’s response,
calling for payment of the taxpayer's deficiency tax liability, inclusive of the
applicable penalties.

Pursuant to Section 228 of the Tax Code, as amended, a PAN shall not be
required in any of the following cases:

a. When the finding for any deficiency tax is the result of mathematical error
in the computation of the tax appearing on the face of the tax return filed by
the taxpayer; or
b. When a discrepancy has been determined between the tax withheld and
the amount actually remitted by the withholding agent; or

c. 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 applied the same amount claimed against the
estimated tax liabilities for the taxable quarter or quarters of the succeeding
taxable year; or

d. When the Excise Tax due on excisable articles has not been paid; or

e. 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.

In the above-cited cases, a FLD/FAN shall be issued outright by the

Commissioner or his duly authorized representative. The FLD/FAN calling for
payment of the taxpayer's deficiency tax or taxes shall state the facts, the
law, rules and regulations, or jurisprudence on which the assessment is based;
otherwise, the assessment shall be void.

Final Assessment Notice and Formal Letter of Demand with Details of

Discrepancy (Section 228 of the NIRC, as amended; Section 2, Article III,
Constitution; Section 3, RR 18-2013, as amended);

Section 2. The right of the people to be secure in their persons,

houses, papers, and effects against unreasonable searches and
seizures of whatever nature and for any purpose shall be inviolable,
and no search warrant or warrant of arrest shall issue except upon
probable cause to be determined personally by the judge after
examination under oath or affirmation of the complainant and the
witnesses he may produce, and particularly describing the place to
be searched and the persons or things to be seized. cralaw

Receipt by the taxpayer of the FAN/FLD with Details of Discrepancy and

Protesting of Assessment (Request for Reconsideration or Reinvestigation);
submission of supporting documents (reinvestigation only); Effects of failure
to file a protest;

Rendition of a Final Decision on Disputed Assessment (FDDA) by the CIR or

his authorized representative or Inaction by the CIR or his authorized
representative of 180 days from filing of administrative protest or from
submission of supporting documents; Appeal with the CTA in Division.