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Week 1: Tax Remedies Glenalyn M. Acollador

Choose the best answer.

1. Broadly defined, this informs the taxpayer that he or she has tax liabilities.
a. Assessment
b. Investigation
c. Letter of Authority
d. Litigation

2. This occurs when self-assessed tax per return filed by the taxpayer on the prescribed date
was not paid at all or only partially paid.
a. Deficiency tax
b. Delinquency tax
c. Deficit tax
d. Delayed tax

3. It is an official document that empowers a Revenue Officer to examine and scrutinize a

taxpayer’s books of accounts and other accounting records, in order to determine the
taxpayer’s correct internal revenue tax liabilities.
a. Preliminary Assessment Notice
b. Warrant of Inspection
c. Letter of Authority
d. Arrest Warrant

4. Statement 1: A Preliminary Assessment Notice (PAN) need not be in writing.

Statement 2: If voluntary payments are made prior to the issuance of PAN, then a PAN
need not be issued.
a. Only statement 1 is true
b. Only statement 2 is true
c. Both statements are true
d. Both statements are not true

5. In which of the following cases will a PAN not be required?

a. There is deficiency income tax due
b. There is a mathematical error in the computation of taxes.
c. In cases involving documentary stamp tax
d. When there is discrepancy between tax payable and tax due.

6. Within how many days should a taxpayer reply to the PAN?

a. Ten days

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b. Fifteen days
c. Twenty days
d. Thirty days

7. A Final Assessment Notice (FAN) shall be issued within _______ after the expiration of
the period to file the reply to the PAN or after receipt of reply to the PAN
a. Ten days
b. Fifteen days
c. Twenty days
d. Thirty days

8. Within how many days should a taxpayer protest to the FAN?

a. Ten days
b. Fifteen days
c. Twenty days
d. Thirty days

9. Which kind of protest requires the submission of additional supporting documents?

a. Request for reconsideration
b. Request for reinvestigation
c. Request for conveyance
d. Request for recognition

10. Within how many days must additional supporting documents be submitted?
a. Fifteen days from filing of a request for reinvestigation
b. Thirty days from filing of a request for reinvestigation
c. Sixty days from filing of a request for reinvestigation
d. Ninety days from filing of a request for reinvestigation

11. What is the minimum compromise rate if the ground for compromise is financial
incapacity?
a. 10% of the basic assessed tax
b. 20% of the basic assessed tax
c. 30% of the basic assessed tax
d. 40% of the basic assessed tax

12. Mimi Company filed its annual income tax return for the calendar year 2020 on April 12,
2021. The BIR assessed Mimi of deficiency taxes on April 14, 2024, without alleging fraud.
Mimi, in its protest contended that the period for BIR to assess has already prescribed. Is
Mimi correct?

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a. Yes, the right of BIR to assess has prescribed on April 12, 2023
b. Yes, the right of BIR to assess has prescribed on April 12, 2024
c. No, the right of BIR to assess will only prescribe on April 15, 2024
d. No, the right of BIR to assess will only prescribe on April 15, 2025.

13. When is an amendment of a return considered substantial?

a. When there is under declaration exceeding 20%
b. When there is under declaration exceeding 25%
c. When there is under declaration exceeding 30%
d. When there is under declaration exceeding 40%

14. Fearless Corporation received an assessment notice from the Bureau of Internal Revenue
on April 9, 2021, assessing the corporation of deficiency income taxes for taxable year
2017. Fearless Corporation follows the calendar year, and Fearless Corporation has filed
its annual income tax return for year 2017 on April 7, 2018. The BIR has sent the
assessment notice on April 5, 2021 but was only received by the taxpayer on April 9, 2021.
Has the assessment prescribed?
a. Yes. The assessment has prescribed on April 7, 2021, and the taxpayer was only
able to receive the assessment notice on April 9, 2021
b. No. The assessment is set to prescribed on April 7, 2021 and the BIR was able to
send the assessment notice on April 5, 2021.
c. No. The assessment is set to prescribe on April 15, 2021, and the taxpayer was
able to receive the assessment notice on April 9, 2021.
d. No. The assessment is set to prescribe on April 15, 2021, and the BIR was able to
send the assessment notice on April 5, 2021.

15. The rate of interest for late payment of taxes is set by the law at:
a. The legal interest rate
b. Twelve percent
c. Six percent
d. Twenty percent

16. What is the prescriptive period of assessment of tax in case of false or fraudulent return?
a. Within 3 years from the last date of filing required by law or actual filing of return
whichever is later.
b. Within 5 years from the discovery of falsity or fraud
c. Within 3 years from the discovery of falsity or fraud
d. Within 10 years from discovery of falsity or fraud.

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17. Harry Potter Company filed its donor’s tax return for a donation made on March 1, 2020,
on March 20, 2020. On April 13, 2020 the Company filed an amended donor’s tax return
declaring a gross gift which is 40% greater than the previously declared gross gift. When
is the last day for BIR to assess Harry Potter Company for deficiency donor’s tax assuming
there is no fraud?
a. March 1, 2023
b. March 20, 2023
c. March 31, 2023
d. April 13, 2023

18. Which of the following tax cases may be the subject matter of compromise agreement?
a. Estate tax case on ground of financial incapacity
b. Withholding tax case
c. Criminal tax case involving fraud
d. Criminal tax case not yet filed in court

19. Which of the following is a ground for abatement of tax?

a. Financial incapacity of taxpayer
b. Reasonable doubt as to validity of claim against the taxpayer
c. The tax appears to be unjustly or excessively assessed
d. None of the above

20. It is issued if after review and evaluation by the CIR or his duly authorized representative,
as the case may be, it is determined that there exists sufficient basis to assess the
taxpayers for any deficiency tax or taxes.
a. Notice of discrepancy
b. Preliminary assessment notice
c. Final assessment notice
d. Final decision on a disputed assessment

21. This is not an administrative remedy available to a taxpayer in connection with the
collection of taxes.
a. Entering into a compromise
b. Filing a petition for reconsideration or reinvestigation
c. Filing a criminal complaint against erring BIR Officials or employees
d. Filing a claim for tax refund or credit

22. Mr. R seasonably filed a protest and submitted supporting documents with the BIR . Within
how many days shall the former await the decision of latter before he assumes that the
protest has been indirectly denied

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a. 30 days
b. 60 days
c. 90 days
d. 180 days

23. If the taxpayer did not file a return, what is the prescriptive period for the issuance of FAN?
a. 3 years counted from the time of filing or deadline whichever is later
b. 3 years counted from the date of discovery by the BIR that no return was filed
c. 10 years counted from the time of filing or deadline whichever is later.
d. 10 years counted from the date of discovery by the BIR that no return was filed.

24. Which of the following is not the remedy of the government in tax collection?
a. Tax lien
b. Compromise
c. Forfeiture
d. Protest

25. Mia, a compensation income earner, filed her income tax return for the taxable year 2015
on March 30, 2016. On May 20, 2019, Mia received an assessment notice and letter of
demand covering the taxable year 2015 but the postmark on the envelope shows April 10,
2019. Her return is not a false and fraudulent return. Can Mia raise the defense of
prescription?
a. No. The 3-year prescriptive period started to run on April 15, 2016, hence, it has
not yet expired on April 10, 2019.
b. Yes. The 3-year prescriptive period started to run on April 15, 2016, hence, it had
already expired on May 20, 2019.
c. No. The prescriptive period started to run on March 30, 2016, hence, the 3-year
period expired on April 10, 2019.
d. Yes. Since the 3-year prescriptive period started to run March 30, 2016, it already
expired by May 20, 2019.

26. A compromise for a tax liability on the ground of financial incapacity to pay shall still involve
a payment of a tax from the taxpayer at a minimum compromise rate of _____.
a. 10% of the basic assessed tax
b. 20% of the basic assessed tax
c. 30% of the basic assessed tax
d. 40% of the basic assessed tax

27. A compromise for a tax liability on the ground other than financial incapacity to pay, the
compromise shall involve a minimum compromise rate of _____.

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a. 10% of the basic assessed tax

b. 20% of the basic assessed tax
c. 30% of the basic assessed tax
d. 40% of the basic assessed tax

28. A taxpayer disclosed to you the following information:

Date of filing the income tax return: March 28, 2019
Date assessment was received: June 20, 2021
Request for reinvestigation was filed: July 4, 2021
The taxpayer submitted the documents supporting his motion on August 26, 2021. The
BIR should act on the protest not later than ______.
a. February 22, 2022
b. September 26, 2021
c. April 15, 2022
d. February 26, 2021

29. Date of payment of tax erroneously paid: April 15, 2020

Date a claim for refund was filed: January 15, 2021
Date decision of denial by the BIR was received: September 15, 2021
Last day to appeal to the CTA is _____.
a. November 15, 2021
b. October 15, 2021
c. April 15, 2021
d. January 15, 2021

30. A contract whereby the taxpayer and the government by reciprocal concessions avoid a
litigation or put an end to one already commenced.
a. Distraint
b. Confiscation
c. Compromise
d. Suspension

31. The last day for the taxpayer to claim refund if the tax paid in installment is ____.
a. 2 years from the date of first installment payment
b. 2 years from the date of final payment
c. 5 years from the date of first installment payment
d. 5 years from the date of second installment payment

32. All criminal violations may be compromised:

I. Except those involving fraud

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II. Except those already filed in court

a. I only c. Both I and II
b. II only d. Neither I nor II

33. In which of the following shall a 25% surcharge be collected?

I. Failure to file and pay the tax due on time
II. Willful neglect to file the return on time
III. Filing of tax return after prior notice in writing from the BIR
a. I only c. I and III
b. I and II d. I, II, and III

34. In which of the following shall a 50% surcharge be collected?

I. Willful neglect to file the return on time
II. Failure to file and pay the tax due on time
III. Filing of tax return after prior notice in writing from the BIR
a. I only c. I and III
b. I and II d. I, II, and III

35. [1] Under declaration of more than 30% of taxable sales, receipt or income is a prima facie
evidence of false or fraudulent return.
[2] Upon the effectivity of the TRAIN Law, in no case shall the deficiency and delinquency
interest be imposed simultaneously.
a. True, true c. False, false
b. True, false d. False, true

36. Deficiency interest imposed on any deficiency tax due, which interest shall be assessed
and collected from the date prescribed for its payment until _____.
a. Full payment thereof
b. Upon issuance of a notice and demand by the commissioner or his authorized
representative.
c. Full payment thereof or upon issuance of a notice and demand by the
commissioner or his authorized representative, whichever comes later
d. full payment thereof or upon issuance of a notice and demand by the commissioner
or hs authorized representative, whichever comes first

Use the following data for the next 4 questions

A has been assessed deficiency income tax of P2,000,000 exclusive of interest and surcharge,
the taxable year 2018. The tax liability has remained unpaid despite the lapse of June 30, 2020,
the deadline for payment stated in the notice and demand issued by the Commissioner. Payment
was made by the taxpayer on February 10, 2021.

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37. The correct amount of surcharge, if any shall be ______.

a. 0 c. 250, 000
b. 120, 000 d. 500, 000

38. The correct amount of deficiency interest shall be _____.

a. 145,315.07 c. 248,530.16
b. 290,630.14 d. 395,315.07

39. The correct amount of delinquency interest shall be ____.

a. 206,430.17 c. 395,315.07
b. 103,215.09 d. 497,060.31

40. The total amount due on February 10, 2021 shall be _____.
a. 2,497,060.31 c. 1,997,060.31
b. 2,790,630.14 d. 1,498,530.16

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