TAXATION LAW REVIEW. Sababan. 2008 ed.

Ppg 181-200
A careful analysis of the case wouls show that the return was filed
CHAPTER XXI: REMEDIES beyond the period for filing the return. The return was for the
calendar year 2005 (thus, the return should have been filed before
 There are two remedies provided in the NIRC: April 15, 2006) but only filed in 2007. The return was filed long
1. The remedies of the Government, and AFTER the deadline. Thus, the prescription period should commence
2. The remedies of the taxpayer from the date the return is filed – APRIL 12, 2007.

A.THE REMEDIES OF THE GOVERNMENT Note: for collection, the Code does not provide for a prescriptive
period.
 The Code provides the Government with TWO remedies: Author’s note: the prescriptive period for abnormal is 5
(1) Assessment, and years from assessment, hence it can be concluded that the
(2) Collection prescriptive period for normal is also 5 years. It will create an absurd
situation where there is no prescriptive period under the normal but
2 KINDS OF ASSESSMENT AND COLLECTION: there is a prescriptive period for abnormal. It is more logical to
(a) Normal or ordinary assessment and collection ↓ Sec. conclude that the legislature intended to provide a prescriptive period
203; and under the normal collection.
(b) The Abnormal or extraordinary assessment and
collection ↓ Sec. 222 ABNORMAL OR EXTRAORDINARY ASSESSMENT AND
COLLECTION
NORMAL OR ORDINARY ASSESSMENT AND COLLECTION
(Sec. 203) : resorted to by the Govt in the ff cases: (OFF)

: available to the Government if there was a return filed by (1) The taxpayer OMITS or FAILS to file his return
the taxpayer and such return is not FALSE OR (2) The taxpayer FILED a return but the return was
FRAUDULENT FRAUDULENT
(3) The return filed by the taxpayer was FALSE.
: Govt may only make the assessment under this section
w/in 3 years after the last day prescribed by law for the : an error in the return filed by the taxpayer does not imply
filing of the return – NOT FROM THE TIME OF PAYMENT. fraud or that the same is FALSE.

: when the return is filed beyond the period of filing : legal presumption  the return filed is TRUE and
prescribed by law, the 3year period shall be counted from CORRECT.  the burden of proof lies in the govt to prove that such
the day of the filing of the return return is fraudulent or false.

2 INSTANCES CONTEMPLATED ↓ THIS SECTION: 2 REMEDIES (options) ↓ THIS KIND OF ASSESSMENT AND
COLLECTION:
FIRST SECOND
– the return is filed BEFORE/ AT – when the return is filed beyond (1) assess and collect, and
THE TIME prescribed by law  the period prescribed by law. (2) collection w/o assessment
w/c is ON OR BEFORE APRIL
15 of each year covering the (1) For assessment and collection – prescriptive period is 10years
income for the preceding taxable from the DISCOVERY of the non-filing of the return or the
year for those using the calendar fraudulent or false return. (Sec 222 a)
year; (Sec 51 c 1)OR
-- the return is filed  period for collection prescribes AFTER 5 years from
BEFORE/ AT THE TIME date of FINAL ASSESSMENT (Sec 222 c)
prescribed by law  w/c is ON
OR BEFORE the 15th day of the (2) Govt opts to collect w/o assessment – there would be NO
FOURTH MONTH following the PRESCRIPTIVE PERIOD for assessment.
close of the FISCAL YEAR for
those using the fiscal year (Sec  period for collection prescribes within 10years from the
77B) DISCOVERY of the non-filing of the return or the fraudulent
PRESCRIPTIVE PERIOD or false return.
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: Can the BIR just collect w/o assessment?
month following the close of the
fiscal year. 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

Q: Suppose the return for the calendar year 2006 is filed by the
taxpayer on April 10, 2007, when will the prescriptive period  Sec 228 provides for 2 STEPS for ASSESSMENT:
begin to run?
(1) pre-assessment notice; and
A: the prescriptive period will begin to run AFTER APRIL 15, 2007 – (2) final assessment notice
the DEADLINE for filing the return for 2006
 RR No. 12-99 provides for 3 STEPS:
Q: Suppose the return for 2005 was filed on April 12, 2007, when
will the prescriptive period begin to run? (1) notice of informal conference;
(2) preliminary notice of assessment (PAN);
A: the period will commence from ARPIL 12, 2007.

♥ NOTES
 TAXATION LAW REVIEW. Sababan. 2008 ed. Ppg 181-200
(3) formal letter of demand and notice to pay the tax
(FAN).

PROCEDURE FOR ASSESSMENT: W/in 15 days from receipt

Notice of Informal Conference
APPEAL to the Court of Tax
Appeals EN BANC
w/in 15 days from receipt of notice

FILE A REPLY
W/in 15 days from receipt
APPEAL to the
SUPREME COURT

FAILED TO FILE A REPLY FILED A REPLY

SEND NOTCIE AGAIN PRELIMINARY NOTICE OF

ASSESSMENT (PAN)

15 days upon receipt of PAN

FILE A REPLY

a. PRE-ASSESSMENT NOTICE (PAN)

FAILED TO FILE A REPLY
As a rule: PAN is issued to a taxpayer
- who fails to file a return, or
- files a return but fails pay the tax,
REPEAT PAN DECLARE IN DEFAULT,
- pays the tax, but the same is INSUFFICIENT
SEND FORMAL LETTER OF
DEMAND AND NOTICE TO
PAY TAX (FAN)
 Sec 228, when is PAN NOT NECESSARY: (MD CES)

w/in 30days fr receipt of FAN (1) When the finding for deficiency tax is the
result of MATHEMATICAL ERROR in the
computation of the tax appearing on the
FILE A PROTEST: face of the return;

2 KINDS OF PROTESTS: (2) When a DISCREPANCY has been

 FAN IS ISSUED IN THESE INSTANCES 

(1) Motion for reconsideration determined between the tax withheld and
-60 day period NOT applicable
the amount actually remitted by the
(2) Motion for reinvestigation – withholding agent;
60 days from filing of protest
(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
SUBMIT COMPLETE SET OF automatically applies the same amount
DOCUMENTS claimed against the estimated tax liabilities
for the taxable quarter or quarters of the
succeeding taxable year;

BIR IS GIVEN 180 DAYS TO

(4) When the EXCISE TAX DUE on excisable
DECIDE articles has not been paid;

(5) When an article locally purchased or

imported by an exempt person, such as, but
not limited to, vehicles, capital equipment,
PROTEST IS DENIED; or machineries and spare parts, has been
180 HAS LAPSED SOLD, TRADED OR TRANSFERRED TO
NON-EXEMPT PERSONS.
W/in 30 days from denial/lapse
In the foregoing instances, the taxpayer shall receive a
final assessment notice without the benefit of a pre-
APPEAL to the Court of Tax
assessment notice.
Appeals IN DIVISION

b. FINAL ASSESSMENT NOTICE (FAN)

W/in 15 days from receipt
 from the flowchart, FAN is issued when:
Motion for Reconsideration with
the DIVISION
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 TAXATION LAW REVIEW. Sababan. 2008 ed. Ppg 181-200
(1) The taxpayer having received a PAN, fails e. APPEAL TO THE SC
to respond within the period provided for by
the rules and regulations (Sec 228, last par)  after appealing to CTA, and after rendering an
unafvorable decision, taxpayer may file a motion for reconsideration
(2) ↓ the five instances enumerated ↓ Sec 228 of said decision within 15 dyas from receipt of the decision of the
where pre-assessment is NOT necessary. CTA sitting IN DIVISION.

c. PROTEST
 after receipt of FAN, taxpayer ≠ immediately appeal to  if decision is still UNFAVORABLE, to the CTA En Banc.
the CTA.
 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
: BEFORE AN APPEAL, a PROTEST must FIRST be amounting to lack/excess of jurisdiction.
FILED by the taxpayer.
SEVERAL INSTANCES WHERE THE FINAL ASSESSMENT
PROTEST  an action disputing the final assessment. BECOMES FINAL AND EXECUTORY: (SONA)

: in accordance w/ the rule in Admin Law - the exhaustion (1) SUPPORTING DOCUMENTS NOT filed w/in the 60-
of administrative remedies. day period

: after filing protest, BIR – given a period of 180 days w/in (2) Protest NOT filed ON TIME;
w/c to decide on the matter.
(3) NO APPEAL was filed with the CTA w/in 30days after
IF MR: the 180-day period is to be committed on the day the lapse of the 180-day period; and
the protest has been filed.
(4) There was an APPEAL FILED but it was BEYOND the
IF MI: the 180-day period shall be reckoned on the day the period to appeal.
documents or receipts were filed with the 60-day period of
time. C.FORMS OF PROTEST
: Upon denial of the protest/ lapse of the 180-day period : Protest is a remedy afforded to the taxpayer in cases
w/o the BIR acting on the protest, the tacpayer may appeal where the BIR issues a final assessment to the taxpayer .
to the CTA w/in 30days from receipt of the dnial or lapse of
the period; otherwise the decision shall become FINAL, 3 FORMS OF PROTEST AFFORDED TO THE TAXPAYER:
EXECUTORY and DEMANDABLE.
(1) ↓ Local Tax
Q: If the taxpayer, during the pendency of his protest, received a (2) ↓ Real Property Tax
notice of an action for collection filed by the BIR, what is his (3) ↓ Tariff and Customs Code
proper remedy?
NB: A 4th may be added – ADMIN PROTEST ↓ NIRC.
A: Yabes v. Flojo + Union Shipping Lines v. Commissioner – SC held
that the subsequent filing of a collection suit by the BIR 1. PROTEST ↓ LOCAL TAX (Sec 195, LGC)
may be considered as a denial of the request for protest,
hence, the proper remedy of the taxpayer is to appeal the LGC provides: when the local treasurer or his duly
denial to the CTA. authorized representative finds that correct taxes, fees, or
charges have not been paid, he shall issue a notice of
d. APPEAL TO THE CTA assessment stating the nature of the tax, fee, or charge the
amount of deficiency, the surcharges, interest and
 if protest is DENIED, in whole or in part; penalties.
 or the 180-day period has already lapsed w/o the BIR
acting upon the protest : it is from this assessment that the taxpayer may file a
protest w/in 60days from receipt of notice of assessment. If
 taxpayer may appeal the denial to the CTA w/in 30days taxpayer does not file the protest w/in said period, the
from the receipt of the denial or the lapse of the period assessment shall become final and executor.

Q:PENDING APPEAL, can the BIR still amend the final :local treasures shall decide the protest within 60days from
assessment? its filing. He may either grant/deny the protest.

A: 2 VIEWS: : GRANT – if he finds that it is, wholly or partly,

1. Batangas v. Collector – SC held that the BIR may still meritorious.
amend the assessment during the pendency of the -  he shall issue a notice
appeal to avoid multiplicity of suits. CANCELING wholly or partly the
assessment.
2. Guerrerro v. Commissioner – SC held that BIR ≠
amend the assessment SINCE IT IS NO LONGER A : DENY – wholly/party, if he finds that
DISPUTED ASSESSMENT. the assessment is wholly or partly
CORRECT, w/ NOTICE to the taxpayer
Author’s Note: favors the first ruling.
: the taxpayer is given a period of 30days from receipt of
denial or the lapse of the 60-day period, w/in w/c to appeal
to the court of competent jurisdiction – RTC.

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 TAXATION LAW REVIEW. Sababan. 2008 ed. Ppg 181-200
( what is appealable is the Sec’s decision from AR of
: RTC – renders unfavourable decision, TP may appeal to Commr’s decision ↓ RA 9282.)
CTA EN BANC – is still unfavourable  SC.
D. COMPROMISE
2. PROTEST ↓ REAL PROPERTY TAX (Secs 226, 230, 252 LGC)
Commr may compromise payment of any internal revenue tax ↓ 2
: made by a TP who is not satisfied with the action of the provincial, INSTANCES:
city or municipal assessor in the assessment of his property.
(1) When a reasonable doubt exists as to the validity of
: TP may, w/in 60days from date of receipt of the written the claim ≠ the TP
notice of assessment, appeal to the Local Board of (2) When the financial position of the TP demonstrates a
Assessment Appeals (LBAA) of the province or city. clear inability to pay the assessed tax.

: BEFORE THIS PROTEST MAY BE ENTERTAINED, Sec Q: May the govt compromise both criminal and civil cases?
252 LGC requires  TP FIRST PAYS THE TAX. Suppose the civil case is already final and executory, can it still
(PAYMENT UNDER PROTEST) be subject to compromise?

: Protest may only be filed w/in 30 days from the payment A: in civil cases, the govt may compromise the liability of the TP at
of the tax. (the words “paid under protest” shall be ANY STAGE of the proceeding except when the case is already final
annotated on the tax receipt) and executory. In this case, if the govt would allow a compromise
even if the case is already final and executory, the doctrine of
: LBAA shall decide w/in 120 days from receipt of the separation of powers will be violated.
appeal. The Board after hearing, shall render a decision
based on substantial evidence. In criminal cases, compromise is allowed except if the criminal case
is already filed before the RTC or if the case involves fraud.
: LBAA- renders unfavourable decision, TP may appeal to
the Central Board of Assessment Appeals (CBAA) – if Q: Suppose the corporation is already dissolved, can the
still unfavourable  CTA then to SC. stockholder still be compelled to pay the tax liability?

3. PROTEST ↓ THE TARIFF AND CUSTOMS CODE (Sec 2313, as A: GR: NO.
amdd by RA No. 7651) 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
: appeals ↓ TCC include those requests for protests as well as for unpaid subscription.
FORFEITURES.
: the amount to be compromised – limited by the Code. For cases of
FIRST SITUATION ↓ TCC: financial incapacity, the minimum rate shall be equivalent to 10% of
: if importer loses his case, remedy = APPEAL w/in 15 the basic assessed tax. For other cases, the minimum rate shall be
days  OFFICE OF THE COMMISSIONER equivalent to 40% of the basic assessed tax. In other words, the
minimum amount to be assessed shall be:
: Commr rules for the Govt – importer may file appeal to (1) In cases of financial inacapacity – not < 10% of the
the CTA sitting IN DIVISION w/in 30 days from recipt of the original assessment; and
decision. (2) For other cases, not < 40% of the original
assessment.
: CTA for Govt – importer to file MR before the same
division w/in 15days  still unfavourable  appeal before Q: Is there any instance where the amount assessed is lower
the CTA En Banc. than the limitations provided?

: CTA EB – still unfavourable, importer appeal w/in 15 days A: GR: the compromised amount should not be lower than the
from receipt of decision SC limitations provided by the Code.

SECOND SITUATION ↓ TCC: EXC: where the basic tax involved exceeds P1M or where the
: importer prevails over the government. 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.
: in this case, there will be an AUTOMATIC REVIEW w/n
5days. E. REMEDIES FOR COLLECTION OF DELINQUENT TAXES (Sec
205))
: AUTOMATIC REVIEW shall be filed before
1. SEC of FINANCE – if value of commodity = P5M or  2 GROUPS OF REMEDIES PROVIDED BY THE CODE:
2. Office of Commr – if value of commodity is < P5M
1. JUDICIAL ACTION:
: in 2 above, the Commr is given a period of 30dyas w/in w/c to a. Civil action
decide. b. Criminal action

: if Commr REVERSES the ruling,  he rules for the Govt, 2. ADMINISTRATIVE ACTION
this decision shall become FINAL AND EXECUTORY. a. Distraint
b. Levy
: if Commr AFFIRMS the Collector/ does not render a c. Tax lien
decision w/in 30-day period, then AUTOMATIC REVIEW
before the Sec of Finance. NB: a determination of whether the final assessment is under
normal/abnormal assessment/collection is material in order to
: from this Atutomatic Review the decision of the Sec – if determine the remedies available to the govt.
unfavourable to importer-TP, shall be appealable to CTA.
♥ NOTES
 TAXATION LAW REVIEW. Sababan. 2008 ed. Ppg 181-200
 in case of abnormal, where the return filed is false or : shall be garnished by serving a warrant of garnishment
fraudulent, the govt may not only avail of judicial action, upon the tp and upon the president, manager, treasurer, or
also of levy or distraint. other responsible officer of the bank.

F. DISTRAINT (3) ACTUAL DISTRAINT (Secs 207 a and 209)

3 KINDS OF DISTRAINT: : means that the personal property of the tp is

1. Constructive PHYSICALLY taken by the distraining officer.
2. Distraint of intangible properties
3. Actual Distraint : w/in 10days from receipt of warrant, a report on the
distraint shall be submitted by the distraining officer to the
(1) CONSTRUCTIVE DISTRAINT (Sec 206) Revenue District Officer and to the Revenue Regional
Director.
 the Commr may place ↓ CD the property of a delinquent TP or
any TP who in his opinion is: : prop distrained  SOLD in PUBLIC AUCTION.
(1) Retiring from any business subject to tax;
:209 provides that a notice shall be posted in not less than
(2) Intending to leave the Phils; 2 public places in the municipality or city where the distraint
is made, specifying the time and place of sale and articles
(3) Intending to remove his properties in the Phils; distrained. The time of sale shall not be less than 20 days
after notice to the owner or possessor of the property and
(4) Intending to hide/conceal his property; the publication or posting of such notice.

: w/in 2 days after the sale, the officer making the same
(5) Intending to perform any act tending to obstruct
shall make a report of his proceedings in writing to the
proceedings for collecting tax due/ w/c may be due to
Commr and shall himself preserve a copy of such report as
him.
an official record (Sec 211)

: NO RIGHT OF REDEMPTION in sale of personal prop

: subject of distraint = PERSONAL PROPERTY OF TP
distrained  ABSOLUTE RULE
 this is effected by:
: OWNER has RIGHT OF PRE-EMPTION:
:Sec 210 provides, if at any time prior to the
(1) Requiring the TP or any person having possession or
consummation of the sale all charges are paid to the officer
control of such property to sign a receipt covering the
conducting the sale, the good or effects distrained shall be
property distrained; and
restored to the owner.
(2) Obligate himself to preserve the same intact and
DURING AUCTION SALE, 2 instances w/c may happen:
unaltered and not to dispose of the same in any
(1) There is a BIDDER but the bid is enough
manne whatever, w/o the authority of the Commr.
(2) NO BIDDER/ there is a BIDDER but bid is NOT
enough.
 if TP or person authorized REFUSES/ FAILS to sign
: in (1), when the amount is insufficient to cover the amount
receipt, the revenue officer effecting the CD shall proceed to prepare
of the liability, Sec217 allows the govt to conduct further distraint as
a list of such property and in the presence of 2 witnesses, leave a
necessary until the full maount due, including all expenses, is
copy thereof in the premises where the property distrained is located,
collected. If there’s an excess, such shall be returned to TP.
after w/c the said property shall be deemed to have been placed ↓
CD.
: 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
(2) DISTRAINT OF INTANGIBLE PROPERTIES (Sec 208)
much less than the acgtual market value of the articles offered for
sale.  the Commr/his deputy may purchase the same in behalf of
Intangible props w/c can be ↓ distraint:
the Natl Govt for the amount of the taxes, penalties and costs
- stocks and other securities
thereon.
- debts and other credits
:the govt shall purchaser the property and
- bank accounts
thereafter SELL the same in AUCTION.  if proceeds are
insufficient, NO FURTHER distraint may be conducted by the govt.
How distraint is made:
Nota Bene: Sec 217 is applicable ONLY to the situation where there
 Stocks and other securities:
is a BIDDER or there is a bidder and the BID is NOT ENOUGH. In
: shall be distrained by serving a copy of the warrant of
case of any excess, the same shall be returned to the TP, but shall
distraint upont the tp and upon the president, manager,
be remitted to the National Treasury.
treasurer, or other responsible officer of the corporation,
company or association, w/c issued the said stocks or
G. LEVY
securities.
 this remedy is applicable to real property
 Debs and other credits:
: shall be distrained by leaving with the person owing the
: Sec 207 B : real property may be levied upon, before,
debts or having in his possession or under his control such
simultaneously or after the distraint of personal property belonging to
credits, or his agent, a copy of the warrant of distraint.
the delinquent TP.
 Bank accounts:

How effected:
♥ NOTES
 TAXATION LAW REVIEW. Sababan. 2008 ed. Ppg 181-200
: by writing upon the certificate, a description of the In case of (2) above, the property is FORFEITED by the govt. (in
property upon w/c levy is made contrast, in cases of distraint, the prop shall be PURCHASED by the
: at the same time, WRITTEN NOTICE of the levy shall be govt)
MAILED to/ SERVED UPON: 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
(1) The Register of Deeds of the province or city where REGISTRATION OF SUCH FORFEITURE WITH THE RD;
the prop is located; and
While in cases of distraint, where the prop is PURCHASED by the
(2) Upon the delinquent TP, or if he is ABSENT from the govt, the TITLE TO THE PROP IS NOT AUTOMATICALLY
Phils, to his agent or the manager of the business in REGISTERED IN THE NAME OF THE GOVT.
respect to w/c the liability arose, of if there be none, to
the occupant of the property in question. H. INJUNCTION (Sec 218)

: refers to a PROHIBITORY INJUNCTION – the purpose is to

: Sec 213 provides: that any time before the day fixed for the sale, “restrain the collection of any National Internal Revenue tax, fee, or
the TP may discontinue all proceedings by paying the taxes, charge.”
penalties and interest.  RIGHT OF PRE-EMPTION afforded to TP.
:218 prohibits any court to have any authority to grant an
Q: by way of comparison, in the case of levy, is there also NO injunction for the purpose abovementioned.
RIGHT OF REDEMPTION as in the case of distraint?
: the prohibition shall ≠ be applied to taxes other than
A: unlike in cases of distraint, in cases of levy of real prop, the TP is those mentioned in the NIRC.
afforded, NOT ONLY w/ the RIGHT OF PRE-EMPTION but also the
RIGHT OF REDEMPTION as provided in sec 214, w/c provides: CTA – given authority to issue writs of injunction.
: that w/in 1 year from the date of sale, the DQ ↓ RAs 1125 and 9282, the CTA is allowed to isse writs of
TP, or any one for him, shall have the RIGHT OF PAYING injunctions provided the contested tax is ↓ the NIRC.
to the RDO the amount of public taxes, penalties, and
interest thereon from the date of delinquency to the date of I. TAX LIEN (Sec 219)
sale xxx, and such payment shall entitle the person paying
to the delivery of the certificate issued to the purchaser and  in cases where the TP neglects / refuses to pay an
a certificate from the said RDO that he has REDEEMED internal revenue tax, the amount due shall constitute as a lien in
the property. favor of the govt from the time the assessment was made until
payment thereof is made.
: Sec 216: in case the real prop is levied by the govt, it shall
be SOLD IN PUBLIC AUCTION.  proviso : the lien constituted shall NOT BE VALID ≠ any
 it is required however, that the Commr shall mortgagee, purchaser or judgment creditor until the notice of such
give not less than 20days notice before the sale lien is filed by the Commr to the Office of the RD of the province / city
and dispotsition of the real prop in public auction. where the prop of the tp is situated or located.  before such lien
The real prop levied may also be sold in a can affect the rights of the mortgagee or purchases of such property,
PRIVATE SALE but this sale is subject to the the lien shall FIRST be registered with the Office of the Reigster of
PRIOR APPROVAL of the Sec of Finance. Deeds.

RESULTS if PROP SOLD in PUBLIC AUCTION: Q: Suppose the govt levied a parcel of land w/c is being
(1) There is a bidder and the bid is enough; or foreclosed by the mortgagee. Which of the two shall be
(2) NO BIDDER/ there is a bidder but bid is NOT enough. preferred?

:Sec 215: governs the situation where there is NO bidder. A: IT DEPENDS. Before the right of a mortgagee is affected, the lien
 in case where there is no bidder for real prop levied and created must FIRST be registered with the Office of the Register of
sold at public auction or if the highest bid is for an amount Deeds – in this case, the govt shall be preferred; otherwise, it is the
insufficient to pay the tax due, mortgagee who will prevail over the government.
 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 J. APPROVAL OF THE COMMISSIONER (Sec 220)
return of his proceedings
 BEFORE an action, civil or criminal, may be filed in
RD is also mandated by the Code to transfer the title of court, the Commissioner must FIRST APPROVE such filing of the
prop forfeited to the govt w/o the necessity of an order from a action.
competent court.  the tp is given 1 year from the date of forfeiture
to REDEEM the property. If there is NO REDEMPTION MADE, : the action or proceeding must be instituted ↓ the name of
forfeiture  BECOMES ABSOLUTE! No further levy is allowed by the Govt of the Philippines.
the code in this case.
Sec 220 + Sec 7  sec7 provides that the Commr may
In case of (1) above: the rules on distraint of real prop shall be delegate the powers vested in him under the Code to any or such
applicable. If there’s still deficiency after the proceeds are applied to subordinate official with the rank equivalent to a division chief or
higher.
the tax liability, there SHALL BE FURTHER LEVY on the real props
of the tp. 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

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 TAXATION LAW REVIEW. Sababan. 2008 ed. Ppg 181-200
(2) The power to ISSUE rulings of first impression or to
reverse, revoke or modify any existing ruling of the INDIVIDUAL: reckoning period should be on the day the
Bureau; tax has been paid.
if paying ↓ the withholding tax system: the period shall
(3) The power to COMPROMISE or ABTE ↓ sec 204 A start at the end of the taxable year.
and B of the Code, any tax liability; and  if paying by way of installment: the period shall be
reckoned on the date of the last instalment.
(4) The power to ASSIGN or REASSIGN internal revenue  for tps subjected to distraint/levy: if prop was sold in
officers to establishments where articles subject to public auction, the date the proceeds were applied for the
excise tax are produced or kept. satisfaction of the tax liability shall be considered.

Sec 4 adds: the Commr has the exclusive and original CORPORATE TPS 2 groups are also considered: the
jurisdiction to interpret the provisions of the NIRC, subject to review EXISTING and NON-EXISTING CORPOS.
by the Sec of Finance. EXISTING NON-EXISTING
: ↓ said sec, the Commr has the power to DECIDE 2-yr period starts to run from the 2-yr period commences from the
disputed assessment, refunds of internal revenue taxes, fees or day the annual adjusted return is day the annual return is filed. For
charges, penalties imposed in relation thereto, or other matters filed – since it is only from this these types of corpos, upon
arising ↓ the NIRC or other laws or portions thereof administered by time that the tax liability can be receipt of the notice from SEC of
the BIR.  this decision is subject to the exclusive appellate correctly determined. the dissolution of the corpo, a
jurisdiction of the CTA. return should be filed after 30
days. The dissolved corpo is not
K. SUSPENSION OF THE RUNNING OF STATUTE OF required to wait for the end of the
LIMITATIONS (Sec 223) taxable year to file the return.

: the periods ↓ 203 and 222 shall be SUSPENDED for the

following reasons:
2-YEAR PERIOD IS ABSOLUTE.
(1) When the TP REQUESTS for a REINVESTIGATION
w/c is GRANTED by the Commr. : even if there’s a supervening event w/c could prevent the
tp from filing a written claim for refund/credit, the claim
(2) When the TP ≠ be LOCATED in the address given by should still be filed w/in the 2-year period.
him in the return filed upon w/c a tax is being
assessed or collected, PROVIDED – that if the TP BUT if the Commr has not yet acted on the claim and the
informs the Commr of any change in address, the 2yr period is abpout to expire, tp’s remedy = file appeal
running of the statute of limitations will NOT BE with CTA sitting in DIVISION. The inaction of the Commr
SUSPENDED. can be considered a DENIAL.

(3) When the warrant or distraint or levy is DULY : if BIR denies the claim w/in the 2yr period, tp’s remedy =
SERVED upon the TP, his authorized rep or a mem of file appeal with CTA w/in 30days from the denial. NOTE
his household with sufficient discretion, and no prop that such 30-day period MUST BE WITHIN THE 2-YEAR
could be located; and PERIOD.
 if there are only 21 days remaining in the 2-year period
(4) When the tp is OUT of the country. and the BIR denied the claim, tp has only 21 days w/in w/c
to file his appeal.
Q: after 15 years, A, a Filipino tp, went back to the Phils. The BIR
assessed him ↓ the normal assessment. Has the action EXCEPTION  Sec 204 C: a return filed showing an
prescribed? OVERPAYMENT shall be considered as a written claim for refund.
 in that case, no written claim for refund or credit is required to be
A: NO. the running of the prescriptive period shall be suspended filed.
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 :In cases of written claim for refund or credit in determining
yet prescribed. the gross value of the estate, the Commr may open the
bank account of the tp. written consent is NOT
L. CLAIM FOR REFUND (Sec 229) REQUIRED. But in cases of compromise ↓ 204 A, written
consent is required for the Commr to inquire into the bank
 claim or refund shall first be filed before the Commr account of the tp.
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.

♥ NOTES