TAXATION LAW REVIEW. Sababan. 2008 ed.

Ppg 181-200
BEFORE the 15th day of
CHAPTER XXI: REMEDIES the FOURTH MONTH
following the close of
 There are two remedies provided in the NIRC:
the FISCAL YEAR for
1. The remedies of the Government, and
2. The remedies of the taxpayer those using the fiscal
year (Sec 77B)
A.THE REMEDIES OF THE GOVERNMENT PRESCRIPTIVE PERIOD
begins to run from the begins to run from the
 The Code provides the Government with TWO deadline: April 15 or time the return is filed.
remedies: the 15th day of the 4th
(1) Assessment, and month following the
(2) Collection
close of the fiscal year.
2 KINDS OF ASSESSMENT AND COLLECTION:
(a) Normal or ordinary assessment and
collection ↓ Sec. 203; and
(b) The Abnormal or extraordinary
Q: Suppose the return for the calendar year
assessment and collection ↓ Sec. 222
2006 is filed by the taxpayer on April 10,
2007, when will the prescriptive period
NORMAL OR ORDINARY ASSESSMENT AND
begin to run?
COLLECTION (Sec. 203)
A: the prescriptive period will begin to run AFTER
: available to the Government if there was
APRIL 15, 2007 – the DEADLINE for filing the
a return filed by the taxpayer and such
return for 2006
return is not FALSE OR FRAUDULENT
Q: Suppose the return for 2005 was filed on
: Govt may only make the assessment
April 12, 2007, when will the prescriptive
under this section w/in 3 years after the last
period begin to run?
day prescribed by law for the filing of the
return – NOT FROM THE TIME OF PAYMENT.
A: the period will commence from ARPIL 12,
2007.
: when the return is filed beyond the
A careful analysis of the case wouls show that the
period of filing prescribed by law, the 3year
return was filed beyond the period for filing the
period shall be counted from the day of the
return. The return was for the calendar year 2005
filing of the return
(thus, the return should have been filed before
April 15, 2006) but only filed in 2007. The return
2 INSTANCES CONTEMPLATED ↓ THIS
was filed long AFTER the deadline. Thus, the
SECTION:
prescription period should commence from the
date the return is filed – APRIL 12, 2007.
FIRST SECOND
– the return is filed – when the return is Note: for collection, the Code does not provide
BEFORE/ AT THE TIME filed beyond the period for a prescriptive period.
prescribed by law w/c prescribed by law. Author’s note: the prescriptive period for
is ON OR BEFORE abnormal is 5 years from assessment, hence it
APRIL 15 of each year can be concluded that the prescriptive period for
covering the income for normal is also 5 years. It will create an absurd
situation where there is no prescriptive period
the preceding taxable
under the normal but there is a prescriptive
year for those using the period for abnormal. It is more logical to conclude
calendar year; (Sec 51 that the legislature intended to provide a
c 1)OR prescriptive period under the normal collection.

-- the return is ABNORMAL OR EXTRAORDINARY

filed BEFORE/ AT THE ASSESSMENT AND COLLECTION
TIME prescribed by law
w/c is ON OR : resorted to by the Govt in the ff cases:
(OFF)

♥ NOTES
 TAXATION LAW REVIEW. Sababan. 2008 ed. Ppg 181-200
(1) notice of informal conference;
(1) The taxpayer OMITS or FAILS to file his (2) preliminary notice of assessment
return (PAN);
(2) The taxpayer FILED a return but the (3) formal letter of demand and notice to
return was FRAUDULENT pay the tax (FAN).
(3) The return filed by the taxpayer was
FALSE. PROCEDURE FOR ASSESSMENT:
Notice of Informal Conference
: an error in the return filed by the
taxpayer does not imply fraud or that the same is w/in 15 days from receipt of notice
FALSE.
FILE A REPLY
: legal presumption the return filed is
TRUE and CORRECT. ∴ the burden of proof lies in
the govt to prove that such return is fraudulent or
false. FAILED TO FILE A REPLY FILED A REPLY

2 REMEDIES (options) ↓ THIS KIND OF

ASSESSMENT AND COLLECTION:
SEND NOTCIE AGAIN PRELIMINARY NOTICE
(1) assess and collect, and OF ASSESSMENT (PAN)
(2) collection w/o assessment

(1) For assessment and collection – prescriptive 15 days upon

period is 10years from the DISCOVERY of the receipt of PAN
non-filing of the return or the fraudulent or FILE A REPLY
false return. (Sec 222 a)

period for collection prescribes AFTER 5

years from date of FINAL ASSESSMENT (Sec
FAILED TO FILE A
222 c)

(2) Govt opts to collect w/o assessment – there

would be NO PRESCRIPTIVE PERIOD for
REPEAT PAN DECLARE IN DEFAULT,
assessment. SEND FORMAL LETTER
OF DEMAND AND
period for collection prescribes within NOTICE TO PAY TAX
10years from the DISCOVERY of the non-filing
of the return or the fraudulent or false w/in 30days fr receipt of
return. FAN

Q: Can the BIR just collect w/o assessment?

FILE A PROTEST:
A: Fortune Tobacco case – YES. Since the return
filed was FRAUDULENT, the BIR can avail of the 2 KINDS OF PROTESTS:
remedy of collection without assessment. The BIR (1) Motion for reconsideration
-60 day period NOT applicable
is allowed to exercise that option.
(2) Motion for reinvestigation –
B.PROCEDURE FOR ASSESSMENT (Sec228; 60 days from filing of protest
RR No. 12-99

Sec 228 provides for 2 STEPS for ASSESSMENT:

(1) pre-assessment notice; and SUBMIT COMPLETE

(2) final assessment notice SET OF DOCUMENTS

 RR No. 12-99 provides for 3 STEPS:

♥ NOTES
 TAXATION LAW REVIEW. Sababan. 2008 ed. Ppg 181-200
BIR IS GIVEN 180 DAYS MATHEMATICAL ERROR in the
TO DECIDE computation of the tax
appearing on the face of the
return;

∴ (2) When a DISCREPANCY has been
PROTEST IS DENIED; determined between the tax
or F
180 HAS LAPSED withheld and the amount
A actually remitted by the
W/in 30 days from N withholding agent;
denial/lapse IS
IS (3) When a taxpayer who opted to
APPEAL to the Court of
S claim a refund or tax credit of
Tax Appeals IN excess creditable withholding
U tax for a taxable period was
E determined to have CARRIED
W/in 15 days from receipt OVER and automatically applies
D
the same amount claimed
Motion for IN
against the estimated tax
Reconsideration with T
the DIVISION
liabilities for the taxable
H quarter or quarters of the
succeeding taxable year;
W/in 15 days from receipt
APPEAL to the Court of (4) When the EXCISE TAX DUE on
Tax Appeals EN BANC excisable articles has not been
paid;

W/in 15 days from receipt (5) When an article locally

APPEAL to the purchased or imported by an
SUPREME COURT 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 foregoing instances, the taxpayer

shall receive a final assessment notice
without the benefit of a pre-assessment
notice.

b. FINAL ASSESSMENT NOTICE (FAN)

from the flowchart, FAN is issued when:

a. PRE-ASSESSMENT NOTICE (PAN)
(1) The taxpayer having received a
As a rule: PAN is issued to a taxpayer PAN, fails to respond within the
- who fails to file a return, or period provided for by the rules
- files a return but fails pay the tax, and regulations (Sec 228, last
- pays the tax, but the same is par)
INSUFFICIENT
(2) ↓ the five instances
 Sec 228, when is PAN NOT enumerated ↓ Sec 228 where
NECESSARY: (MD CES) pre-assessment is NOT
necessary.
(1) When the finding for deficiency
tax is the result of c. PROTEST

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 TAXATION LAW REVIEW. Sababan. 2008 ed. Ppg 181-200
after receipt of FAN, taxpayer ≠ Q:PENDING APPEAL, can the BIR still amend
immediately appeal to the CTA. the final assessment?

A: 2 VIEWS:
1. Batangas v. Collector – SC held that
: BEFORE AN APPEAL, a PROTEST must the BIR may still amend the
FIRST be FILED by the taxpayer. assessment during the pendency of
the appeal to avoid multiplicity of
PROTEST  an action disputing the final suits.
assessment.
2. Guerrerro v. Commissioner – SC held
: in accordance w/ the rule in Admin Law - that BIR ≠ amend the assessment
the exhaustion of administrative SINCE IT IS NO LONGER A DISPUTED
remedies. ASSESSMENT.

: after filing protest, BIR – given a period Author’s Note: favors the first ruling.
of 180 days w/in w/c to decide on the matter.

IF MR: the 180-day period is to be

committed on the day the protest has been
filed. e. APPEAL TO THE SC

IF MI: the 180-day period shall be
reckoned on the day the documents or
receipts were filed with the 60-day period of
time.
: Upon denial of the protest/ lapse of the
180-day period w/o the BIR acting on the
protest, the tacpayer may appeal to the CTA
w/in 30days from receipt of the dnial or lapse of
the period; otherwise the decision shall
become FINAL, EXECUTORY and
DEMANDABLE.
Q: If the taxpayer, during the pendency of
his protest, received a notice of an action
for collection filed by the BIR, what is his
proper remedy?
A: Yabes v. Flojo + Union Shipping Lines v.
Commissioner – SC held that the subsequent
filing of a collection suit by the BIR may be
considered as a denial of the request for protest,
hence, the proper remedy of the taxpayer
is to appeal the denial to the CTA.
d. APPEAL TO THE CTA
 if protest is DENIED, in whole or in part;
 or the 180-day period has already
lapsed w/o the BIR acting upon the protest
taxpayer may appeal the denial to the
CTA w/in 30days from the receipt of the denial or
the lapse of the period
 after appealing to CTA, and after
rendering an unafvorable decision, taxpayer may
file a motion for reconsideration of said decision
within 15 dyas from receipt of the decision of the
CTA sitting IN DIVISION.
 if decision is still UNFAVORABLE, to the
CTA En Banc.
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 amounting to
lack/excess of jurisdiction.
SEVERAL INSTANCES WHERE THE FINAL
ASSESSMENT BECOMES FINAL AND
EXECUTORY: (SONA)
(1) SUPPORTING DOCUMENTS NOT filed
w/in the 60-day period
(2) Protest NOT filed ON TIME;
(3) NO APPEAL was filed with the CTA w/in
30days after the lapse of the 180-day
period; and
(4) There was an APPEAL FILED but it was
BEYOND the period to appeal.
C.FORMS OF PROTEST

♥ NOTES
 TAXATION LAW REVIEW. Sababan. 2008 ed. Ppg 181-200
: Protest is a remedy afforded to the : made by a TP who is not satisfied with the
taxpayer in cases where the BIR issues a final action of the provincial, city or municipal assessor
assessment to the taxpayer . in the assessment of his property.

3 FORMS OF PROTEST AFFORDED TO THE : TP may, w/in 60days from date of receipt
TAXPAYER: of the written notice of assessment, appeal to the
Local Board of Assessment Appeals (LBAA)
(1) ↓ Local Tax of the province or city.
(2) ↓ Real Property Tax
(3) ↓ Tariff and Customs Code : BEFORE THIS PROTEST MAY BE
ENTERTAINED, Sec 252 LGC requires TP FIRST
NB: A 4th may be added – ADMIN PROTEST ↓ PAYS THE TAX. (PAYMENT UNDER
NIRC. PROTEST)

1. PROTEST ↓ LOCAL TAX (Sec 195, LGC) : Protest may only be filed w/in 30 days
from the payment of the tax. (the words “paid
LGC provides: when the local treasurer or his duly under protest” shall be annotated on the tax
authorized representative finds that receipt)
correct taxes, fees, or charges have not
been paid, he shall issue a notice of : LBAA shall decide w/in 120 days from
assessment stating the nature of the tax, receipt of the appeal. The Board after hearing,
fee, or charge the amount of deficiency, the shall render a decision based on substantial
surcharges, interest and penalties. evidence.

: it is from this assessment that the : LBAA- renders unfavourable decision, TP

taxpayer may file a protest w/in 60days from
receipt of notice of assessment. If taxpayer does
not file the protest w/in said period, the
assessment shall become final and
executor.
:local treasures shall decide the protest
within 60days from its filing. He may either
grant/deny the protest.
may appeal to the Central Board of
Assessment Appeals (CBAA) – if still
unfavourable  CTA then to SC.
3. PROTEST ↓ THE TARIFF AND CUSTOMS
CODE (Sec 2313, as amdd by RA No. 7651)
: appeals ↓ TCC include those requests for
protests as well as for FORFEITURES.

: GRANT – if he finds that it is, FIRST SITUATION ↓ TCC:

wholly or partly, meritorious. : if importer loses his case, remedy =
- ∴ he shall issue a notice APPEAL w/in 15 days OFFICE OF THE
CANCELING wholly or COMMISSIONER
partly the assessment.
: Commr rules for the Govt – importer may
: DENY – wholly/party, if he file appeal to the CTA sitting IN DIVISION w/in 30
finds that the assessment is days from recipt of the decision.
wholly or partly CORRECT, w/
NOTICE to the taxpayer : CTA for Govt – importer to file MR before
the same division w/in 15days  still
: the taxpayer is given a period of 30days unfavourable appeal before the CTA En
from receipt of denial or the lapse of the Banc.
60-day period, w/in w/c to appeal to the court of
competent jurisdiction – RTC. : CTA EB – still unfavourable, importer
appeal w/in 15 days from receipt of decision 
: RTC – renders unfavourable decision, TP SC
may appeal to CTA EN BANC – is still
unfavourable  SC. SECOND SITUATION ↓ TCC:
: importer prevails over the
2. PROTEST ↓ REAL PROPERTY TAX (Secs government.
226, 230, 252 LGC)

♥ NOTES
 TAXATION LAW REVIEW. Sababan. 2008 ed. Ppg 181-200
: in this case, there will be an AUTOMATIC
REVIEW w/n 5days.
: AUTOMATIC REVIEW shall be filed before
1. SEC of FINANCE – if value of
commodity = P5M or 
2. Office of Commr – if value of
commodity is < P5M
: in 2 above, the Commr is given a period of
30dyas w/in w/c to decide.
: if Commr REVERSES the ruling, ∴ he
rules for the Govt, this decision shall become
FINAL AND EXECUTORY.
: if Commr AFFIRMS the Collector/ does
not render a decision w/in 30-day period, then
AUTOMATIC REVIEW before the Sec of Finance.
: from this Atutomatic Review the decision
of the Sec – if unfavourable to importer-TP, shall
be appealable to CTA.
( what is appealable is the Sec’s decision
from AR of Commr’s decision ↓ RA 9282.)
D. COMPROMISE
Commr may compromise payment of any internal
revenue tax ↓ 2 INSTANCES:
(1) When a reasonable doubt exists as to
the validity of the claim ≠ the TP
(2) When the financial position of the TP
demonstrates a clear inability to pay
the assessed tax.
Q: May the govt compromise both criminal
and civil cases? Suppose the civil case is
already final and executory, can it still be
subject to compromise?
A: in civil cases, the govt may compromise the
liability of the TP at ANY STAGE of the proceeding
except when the case is already final and
executory. In this case, if the govt would allow a
compromise even if the case is already final and
executory, the doctrine of separation of powers
will be violated.
In criminal cases, compromise is allowed except if
the criminal case is already filed before the RTC
or if the case involves fraud.
Q: Suppose the corporation is already
dissolved, can the stockholder still be
compelled to pay the tax liability?
A: GR: NO.
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 unpaid
subscription.
: the amount to be compromised – limited by the
Code. For cases of financial incapacity, the
minimum rate shall be equivalent to 10% of the
basic assessed tax. For other cases, the minimum
rate shall be equivalent to 40% of the basic
assessed tax. In other words, the minimum
amount to be assessed shall be:
(1) In cases of financial inacapacity – not
< 10% of the original assessment; and
(2) For other cases, not < 40% of the
original assessment.
Q: Is there any instance where the amount
assessed is lower than the limitations
provided?
A: GR: the compromised amount should not be
lower than the limitations provided by the Code.
EXC: where the basic tax involved exceeds P1M
or where the 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.
E. REMEDIES FOR COLLECTION OF
DELINQUENT TAXES (Sec 205))
2 GROUPS OF REMEDIES PROVIDED BY THE
CODE:
1. JUDICIAL ACTION:
a. Civil action
b. Criminal action
2. ADMINISTRATIVE ACTION
a. Distraint
b. Levy
c. Tax lien
NB: a determination of whether the final
assessment is under normal/abnormal
assessment/collection is material in order to
determine the remedies available to the govt.
in case of abnormal, where the return
filed is false or fraudulent, the govt may
not only avail of judicial action, also of levy or
distraint.
F. DISTRAINT
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 TAXATION LAW REVIEW. Sababan. 2008 ed. Ppg 181-200
3 KINDS OF DISTRAINT:
1. Constructive
2. Distraint of intangible properties
3. Actual Distraint
(1) CONSTRUCTIVE DISTRAINT (Sec 206)
the Commr may place ↓ CD the property of a
delinquent TP or any TP who in his opinion is:
(1) Retiring from any business subject to
tax;
(2) Intending to leave the Phils;
(3) Intending to remove his properties in
the Phils;
(4) Intending to hide/conceal his property;
(5) Intending to perform any act tending
to obstruct proceedings for collecting
tax due/ w/c may be due to him.
: subject of distraint = PERSONAL
PROPERTY OF TP
this is effected by:
(1) Requiring the TP or any person having
possession or control of such property
to sign a receipt covering the property
distrained; and
(2) Obligate himself to preserve the same
intact and unaltered and not to
dispose of the same in any manne
whatever, w/o the authority of the
Commr.
if TP or person authorized REFUSES/
FAILS to sign receipt, the revenue officer effecting
the CD shall proceed to prepare a list of such
property and in the presence of 2 witnesses,
leave a copy thereof in the premises where the
property distrained is located, after w/c the said
property shall be deemed to have been placed ↓
CD.
(2) DISTRAINT OF INTANGIBLE PROPERTIES
(Sec 208)
Intangible props w/c can be ↓ distraint:
- stocks and other securities
- debts and other credits
- bank accounts
How distraint is made:
Stocks and other securities:
: shall be distrained by serving a copy of
the warrant of distraint upont the tp and
upon the president, manager, treasurer, or
other responsible officer of the corporation,
company or association, w/c issued the
said stocks or securities.
Debs and other credits:
: shall be distrained by leaving with the
person owing the debts or having in his
possession or under his control such
credits, or his agent, a copy of the warrant
of distraint.
Bank accounts:
: shall be garnished by serving a warrant
of garnishment upon the tp and upon the
president, manager, treasurer, or other
responsible officer of the bank.
(3) ACTUAL DISTRAINT (Secs 207 a and 209)
: means that the personal property of the
tp is PHYSICALLY taken by the distraining
officer.
: w/in 10days from receipt of warrant, a
report on the distraint shall be submitted by the
distraining officer to the Revenue District
Officer and to the Revenue Regional
Director.
: prop distrained  SOLD in PUBLIC
AUCTION.
:209 provides that a notice shall be posted
in not less than 2 public places in the
municipality or city where the distraint is
made, specifying the time and place of sale and
articles distrained. The time of sale shall
not be less than 20 days after notice to the
owner or possessor of the property and the
publication or posting of such notice.
: w/in 2 days after the sale, the officer
making the same shall make a report of his
proceedings in writing to the Commr and
shall himself preserve a copy of such report as
an official record (Sec 211)
: NO RIGHT OF REDEMPTION in sale of
personal prop distrained ABSOLUTE
RULE
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 TAXATION LAW REVIEW. Sababan. 2008 ed. Ppg 181-200
: OWNER has RIGHT OF PRE-EMPTION:
:Sec 210 provides, if at any time
prior to the consummation of the sale all
charges are paid to the officer conducting
the sale, the good or effects distrained shall be
restored to the owner.
DURING AUCTION SALE, 2 instances w/c
may happen:
(1) There is a BIDDER but the bid is
enough
(2) NO BIDDER/ there is a BIDDER but bid
is NOT enough.
: in (1), when the amount is insufficient to
cover the amount of the liability, Sec217 allows
the govt to conduct further distraint as necessary
until the full maount due, including all expenses,
is collected. If there’s an excess, such shall be
returned to TP.
: 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 much less
than the acgtual market value of the articles
offered for sale. the Commr/his deputy may
purchase the same in behalf of the Natl Govt for
the amount of the taxes, penalties and costs
thereon.
:the govt shall purchaser the
property and thereafter SELL the same in
AUCTION. if proceeds are insufficient, NO
FURTHER distraint may be conducted by the govt.
Nota Bene: Sec 217 is applicable ONLY to the
situation where there is a BIDDER or there is a
bidder and the BID is NOT ENOUGH. In case of
any excess, the same shall be returned to the TP,
but shall be remitted to the National Treasury.
G. LEVY
 this remedy is applicable to real
property
: Sec 207 B : real property may be levied upon,
before, simultaneously or after the distraint of
personal property belonging to the delinquent TP.
How effected:
: by writing upon the certificate, a
description of the property upon w/c levy is
made
: at the same time, WRITTEN NOTICE of
the levy shall be MAILED to/ SERVED UPON:
(1) The Register of Deeds of the province
or city where the prop is located; and
(2) Upon the delinquent TP, or if he is
ABSENT from the Phils, to his agent or
the manager of the business in respect
to w/c the liability arose, of if there be
none, to the occupant of the property
in question.
: Sec 213 provides: that any time before the day
fixed for the sale, the TP may discontinue all
proceedings by paying the taxes, penalties and
interest.  RIGHT OF PRE-EMPTION afforded to
TP.
Q: by way of comparison, in the case of
levy, is there also NO RIGHT OF
REDEMPTION as in the case of distraint?
A: unlike in cases of distraint, in cases of levy of
real prop, the TP is afforded, NOT ONLY w/ the
RIGHT OF PRE-EMPTION but also the RIGHT OF
REDEMPTION as provided in sec 214, w/c
provides:
: that w/in 1 year from the date of
sale, the DQ TP, or any one for him, shall have
the RIGHT OF PAYING to the RDO the
amount of public taxes, penalties, and
interest thereon from the date of
delinquency to the date of sale xxx, and such
payment shall entitle the person paying to the
delivery of the certificate issued to the purchaser
and a certificate from the said RDO that he has
REDEEMED the property.
: Sec 216: in case the real prop is levied
by the govt, it shall be SOLD IN PUBLIC
AUCTION.
 it is required however, that the
Commr shall give not less than 20days
notice before the sale and
dispotsition of the real prop in public auction.
The real prop levied may also be
sold in a PRIVATE SALE but this sale
is subject to the PRIOR APPROVAL of
the Sec of Finance.
RESULTS if PROP SOLD in PUBLIC AUCTION:
(1) There is a bidder and the bid is
enough; or
(2) NO BIDDER/ there is a bidder but bid is
NOT enough.
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 TAXATION LAW REVIEW. Sababan. 2008 ed. Ppg 181-200
:Sec 215: governs the situation where
there is NO bidder.
in case where there is no bidder for real
prop levied and sold at public auction or if
the highest bid is for an amount insufficient to
pay the tax due,
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 return
of his proceedings
RD is also mandated by the Code to
transfer the title of prop forfeited to the govt w/o
the necessity of an order from a competent court.
 the tp is given 1 year from the date of
forfeiture to REDEEM the property. If there is NO
REDEMPTION MADE, forfeiture ∴ BECOMES
ABSOLUTE! No further levy is allowed by the code
in this case.
In case of (1) above: the rules on distraint of real
prop shall be applicable. If there’s still deficiency
after the proceeds are applied to
the tax liability, there SHALL BE FURTHER LEVY
on the real props of the tp.
In case of (2) above, the property is FORFEITED
by the govt. (in contrast, in cases of distraint, the
prop shall be PURCHASED by the govt)
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 REGISTRATION OF SUCH
FORFEITURE WITH THE RD;
While in cases of distraint, where the prop is
PURCHASED by the govt, the TITLE TO THE PROP
IS NOT AUTOMATICALLY REGISTERED IN THE
NAME OF THE GOVT.
H. INJUNCTION (Sec 218)
: refers to a PROHIBITORY INJUNCTION – the
purpose is to “restrain the collection of any
National Internal Revenue tax, fee, or charge.”
:218 prohibits any court to have any
authority to grant an injunction for the purpose
abovementioned.
: the prohibition shall ≠ be applied to
taxes other than those mentioned in the NIRC.
CTA – given authority to issue writs of
injunction.
↓ RAs 1125 and 9282, the CTA is allowed
to isse writs of injunctions provided the contested
tax is ↓ the NIRC.
I. TAX LIEN (Sec 219)
in cases where the TP neglects / refuses
to pay an internal revenue tax, the amount due
shall constitute as a lien in favor of the govt from
the time the assessment was made until payment
thereof is made.
 proviso : the lien constituted shall NOT
BE VALID ≠ any mortgagee, purchaser or
judgment creditor until the notice of such lien is
filed by the Commr to the Office of the RD of the
province / city where the prop of the tp is situated
or located. before such lien can affect the rights
of the mortgagee or purchases of such property,
the lien shall FIRST be registered with the Office
of the Reigster of Deeds.
Q: Suppose the govt levied a parcel of land
w/c is being foreclosed by the mortgagee.
Which of the two shall be preferred?
A: IT DEPENDS. Before the right of a mortgagee
is affected, the lien created must FIRST be
registered with the Office of the Register of
Deeds – in this case, the govt shall be preferred;
otherwise, it is the mortgagee who will prevail
over the government.
J. APPROVAL OF THE COMMISSIONER (Sec
220)
 BEFORE an action, civil or criminal, may
be filed in court, the Commissioner must FIRST
APPROVE such filing of the action.
: the action or proceeding must be
instituted ↓ the name of the Govt of the
Philippines.
Sec 220 + Sec 7 sec7 provides that the
Commr may delegate the powers vested in him
under the Code to any or such subordinate official
with the rank equivalent to a division chief or
higher.
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
♥ NOTES
 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
Bureau;
(3) The power to COMPROMISE or ABTE ↓
sec 204 A and B of the Code, any tax
liability; and
(4) The power to ASSIGN or REASSIGN
internal revenue officers to
establishments where articles subject
to excise tax are produced or kept.
Sec 4 adds: the Commr has the exclusive
and original jurisdiction to interpret the provisions
of the NIRC, subject to review by the Sec of
Finance.
: ↓ said sec, the Commr has the power to
DECIDE disputed assessment, refunds of internal
revenue taxes, fees or charges, penalties
imposed in relation thereto, or other matters
arising ↓ the NIRC or other laws or portions
thereof administered by the BIR.  this decision
is subject to the exclusive appellate jurisdiction of
the CTA.
K. SUSPENSION OF THE RUNNING OF
STATUTE OF LIMITATIONS (Sec 223)
: the periods ↓ 203 and 222 shall be
SUSPENDED for the following reasons:
(1) When the TP REQUESTS for a
REINVESTIGATION w/c is GRANTED by
the Commr.
(2) When the TP ≠ be LOCATED in the
address given by him in the return
filed upon w/c a tax is being assessed
or collected, PROVIDED – that if the TP
informs the Commr of any change in
address, the running of the statute of
limitations will NOT BE SUSPENDED.
(3) When the warrant or distraint or levy is
DULY SERVED upon the TP, his
authorized rep or a mem of his
household with sufficient discretion,
and no prop could be located; and
(4) When the tp is OUT of the country.
Q: after 15 years, A, a Filipino tp, went back
to the Phils. The BIR assessed him ↓ the
normal assessment. Has the action
prescribed?
A: NO. the running of the prescriptive period shall
be suspended 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 yet prescribed.
L. CLAIM FOR REFUND (Sec 229)
claim or refund shall first be filed before
the Commr 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.
INDIVIDUAL: reckoning period should be
on the day the tax has been paid.
if paying ↓ the withholding tax system:
the period shall start at the end of the taxable
year.
 if paying by way of installment: the
period shall be reckoned on the date of the last
instalment.
for tps subjected to distraint/levy: if prop
was sold in public auction, the date the proceeds
were applied for the satisfaction of the tax
liability shall be considered.
CORPORATE TPS 2 groups are also
considered: the EXISTING and NON-EXISTING
CORPOS.
EXISTING NON-EXISTING
2-yr period starts to run 2-yr period commences
from the day the from the day the
annual adjusted return annual return is filed.
is filed – since it is only For these types of
from this time that the corpos, upon receipt of
tax liability can be the notice from SEC of
♥ NOTES
 TAXATION LAW REVIEW. Sababan. 2008 ed. Ppg 181-200
correctly determined. the dissolution of the
corpo, a return should
be filed after 30 days.
The dissolved corpo is
not required to wait for
the end of the taxable
year to file the return.

2-YEAR PERIOD IS ABSOLUTE.

: even if there’s a supervening event w/c

could prevent the tp from filing a written claim
for refund/credit, the claim should still be filed
w/in the 2-year period.

BUT if the Commr has not yet acted on the

claim and the 2yr period is abpout to expire, tp’s
remedy = file appeal with CTA sitting in
DIVISION. The inaction of the Commr can be
considered a DENIAL.

: if BIR denies the claim w/in the 2yr

period, tp’s remedy = file appeal with CTA
w/in 30days from the denial. NOTE that such 30-
day period MUST BE WITHIN THE 2-YEAR
PERIOD.
∴ if there are only 21 days remaining in
the 2-year period and the BIR denied the
claim, tp has only 21 days w/in w/c to file his
appeal.

EXCEPTION  Sec 204 C: a return filed showing

an OVERPAYMENT shall be considered as a
written claim for refund. in that case, no written
claim for refund or credit is required to be filed.

:In cases of written claim for refund or

credit in determining the gross value of
the estate, the Commr may open the bank
account of the tp. written consent is NOT
REQUIRED. But in cases of compromise ↓
204 A, written consent is required for the
Commr to inquire into the bank account of
the tp.

♥ NOTES