Escolar Documentos
Profissional Documentos
Cultura Documentos
Bobby Lock
PART I - Remedies under the NIRC
I. ASSESMENT OF INTERNAL REVENUE TAXES
A. Definition/Nature/effect/Basis
Sections 4-7, 203, 222, 223, 228, 232, 235, 266 NIRC
Revenue Regulations (RR) No. 12-99 dated September 6,
1999, as amended by RR No. 18-2013 dated November
28, 2013
http://bir.gov.ph/taxpayerrights/taxpayerrights.htm
Republic Act No. 10021
1. Tax Audit Process
2. Letter of Authority/Audit Notice/Tax Verification Notice
Revenue Audit Memorandum Order (RAMO) No. 1-00
Revenue Memorandum Order (RMO) No. 44-10
RMO 69-10
Commissioner of Internal Revenue vs. Sony Philippines, Inc.
Based on Section 13 of the Tax Code, a Letter of Authority
or LOA is the authority given to the appropriate revenue officer
assigned to perform assessment functions. It empowers or
enables said revenue officer to examine the books of account and
other accounting records of a taxpayer for the purpose of
collecting the correct amount of tax. The very provision of the Tax
Code that the CIR relies on is unequivocal with regard to its power
to grant authority to examine and assess a taxpayer.
There must be a grant of authority before any revenue
officer can conduct an examination or assessment. Equally
important is that the revenue officer so authorized must not go
beyond the authority given. In the absence of such an authority,
the assessment or examination is a nullity.
3. Preservation of books of accounts and tax records
RR 17-13
RR 5-14
4. Tax Assessment
Lara Defensor 2015
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Petition for Review with the Court of Tax Appeals within thirty (30)
days from the lapse of the one hundred eighty (180) day period
reckoned from the date the protest was filed, renders the
assessment final, Executory and demandable."
Commission of Internal Revenue vs. First Express Pawnshop
Company, Inc.
If the protest is not acted upon within 180 days from
submission of documents, the taxpayer adversely affected by the
inaction may appeal to the CTA within 30 days from the lapse of
the 180-day period. Respondent, having submitted its supporting
documents on the same day the protest was filed, had until 31
July 2002 to wait for petitioners reply to its protest. On 28 August
2002 or within 30 days after the lapse of the 180-day period
counted from the filing of the protest as the supporting documents
were simultaneously filed, respondent filed a petition before the
CTA.
B. Commissioner of Internal Revenue renders a decision on the
disputed assessment
Oceanic Wireless Network, Inc. vs. Commissioner of Internal
Revenue
A demand letter for payment of delinquent taxes may be
considered a decision on a disputed or protested assessment.
The determination on whether or not a demand letter is final is
conditioned upon the language used or the tenor of the letter
being sent to the taxpayer.
We laid down the rule that the Commissioner of Internal
Revenue should always indicate to the taxpayer in clear and
unequivocal language what constitutes his final determination of
the disputed assessment, thus: . . . we deem it appropriate to
state that the Commissioner of Internal Revenue should always
indicate to the taxpayer in clear and unequivocal language
whenever his action on an assessment questioned by a taxpayer
constitutes his final determination on the disputed assessment, as
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would make little sense. (Republic of the Philippines vs. Lopez, L18007, March 30, 1963).
ABN-AMRO SAVINGS BANK CORPORATION VS CIR
**CTACASE**
In the RCBC case, the Supreme Court held that in case
the Commissioner failed to act on the disputed assessment within
the 180-day period, a taxpayer can either: 1) file a petition for
review with the Court of Tax Appeals within 30 days after the
expiration of the 180-day period; or 2) await the final decision of
the Commissioner on the disputed assessments and appeal such
final decision to the Court of Tax Appeals within 30 days after
receipt of a copy of such decision. However, these options are
mutually exclusive, and resort to one bars the application of the
other.
As held in the same case of Oceanic, the "failure on the
part of the petitioner to file a Petition for Review with the Court of
Tax Appeals within thirty (30) days from the lapse of the one
hundred eighty (180) day period reckoned from the date the
protest was filed, renders the assessment final, executory and
demandable." The resolution of the other issues raised becomes
moot and academic.
Advertising Associates, Inc. vs. Court of Appeals
The reviewable decision of the B.I.R. Commissioner is that
letter where he clearly directed the taxpayer to appeal to the Tax
Court, and not the warrants of distraint and levy.No amount of
quibbling or sophistry can blink the fact that said letter, as its tenor
shows, embodies the Commissioners final decision within the
meaning of section 7 of Republic Act No. 1125. The
Commissioner said so. He even directed the taxpayer to appeal it
to the Tax Court. That was the same situation in St. Stephens
Association and St. Stephens Chinese Girls School vs. Collector
of Internal Revenue, 104 Phil. 314, 317-318.
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the date when the period started running and when the same was
fully accomplished.The issue of prescription, however, was
brought up only in the dissenting opinion and was never raised by
PNOC and PNB in the proceedings before the BIR nor in any of
their pleadings submitted to the CTA and the Court of Appeals.
Section 1, Rule 9 of the Rules of Civil Procedure lays down the
rule on defenses and objections not pleaded, and reads:
SECTION 1. Defenses and objections not pleaded.Defenses
and objections not pleaded either in a motion to dismiss or in the
answer are deemed waived. However, when it appears from the
pleadings or the evidence on record that the court has no
jurisdiction over the subject matter, that there is another action
pending between the parties for the same cause, or that the
action is barred by prior judgment or by the statute of limitations,
the court shall dismiss the claim. The general rule enunciated in
the above-quoted provision governs the present case, that is, the
defense of prescription, not pleaded in a motion to dismiss or in
the answer, is deemed waived. The exception in same provision
cannot be applied herein because the pleadings and the evidence
on record do not sufficiently show that the action is barred by
prescription. It has been consistently held in earlier tax cases that
the defense of prescription of the period for the assessment and
collection of tax liabilities shall be deemed waived when such
defense was not properly pleaded and the facts alleged and
evidences submitted by the parties were not sufficient to support a
finding by this Court on the matter.
The BIR (the collecting government agency), PNOC (the
taxpayer), and PNB (the withholding agent) initially found
themselves on the same side.In the case of PNB, an
assessment was issued against it by the BIR on 08 October 1986,
so that the BIR had until 07 October 1989 to enforce it and to
collect the tax assessed. The filing, however, by private
respondent Savellano of his Amended Petition for Review before
the CTA on 02 July 1988 already constituted a judicial action for
collection of the tax assessed which stops the running of the
three-year prescriptive period for collection thereof. A judicial
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collection of the tax, CTA Case No. 4249, at the very least,
suspends the running of the said prescriptive period. Under
Section 271 of the NIRC of 1977, as amended, the running of the
prescriptive period to collect deficiency taxes shall be suspended
for the period during which the BIR Commissioner is prohibited
from beginning a distraint or levy or instituting a proceeding in
court, and for 60 days thereafter. Just as in the cases of Republic
v. Ker & Co., Ltd. and Protectors Services, Inc. v. Court of
Appeals, this Court declares herein that the pendency of the
present case before the CTA, the Court of Appeals and this Court,
legally prevents the BIR Commissioner from instituting an action
for collection of the same tax liabilities assessed against PNOC
and PNB in the CTA or the regular trial courts. To rule otherwise
would be to violate the judicial policy of avoiding multiplicity of
suits and the rule on lis pendens.
That CTA Case No. 4249 was initiated by private
respondent Savellano, the informer, instead of PNOC, the
taxpayer, or PNB, the withholding agent, would not prevent the
suspension of the running of the prescriptive period for collection
of the tax. What is controlling herein is the fact that the BIR
Commissioner cannot file a judicial action in any other court for
the collection of the tax because such a case would necessarily
involve the same parties and involve the same issues already
being litigated before the CTA in CTA Case No. 4249. The threeyear prescriptive period for collection of the tax shall commence to
run only after the promulgation of the decision of this Court in
which the issues of the present case are resolved with finality.
IV. STATUTORY OFFENSES AND PENALTIES
A. Civil Penalties / Surcharges / Interest
Secs. 247-251 NIRCO
RR 12-99 as amended by RR 18-13
1. Applicable Interesst Rate
2. How to compute Interest
3. Rules on Interest
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failure to pay a deficiency tax is allowed under Section 249 (C) (3)
of the NIRC.
A comparison of Section 249 (B) and 249 (C) (3) of the
NIRC reveals that the deficiency interest on any deficiency tax is
assessed "from the date prescribed for its payment until the full
payment thereof" while the delinquency interest, which is imposed
for failure to pay a deficiency tax, is assessed starting "on the due
date appearing in the notice and demand of the Commissioner
until the amount is fully paid". Clearly, the law itself allows the
imposition of these two kinds of interests simultaneously, and
therefore, there is no double imposition of interest penalty. Hence,
petitioner's assertion that the 20% deficiency interest should be
computed from January 25, 2000 until January 31, 2005 and not
until full payment is contrary to the very language of the NIRC.
4. Deficiency vs Delinquency Tax
5. Surcharge: 25% or 50%
Sec. 248 NIRC
Castro vs. Collector of Internal Revenue
The acquittal of a taxpayer in a criminal case can not
operate to discharge him from the duty to pay tax, because that
duty is imposed by statute prior to and independently of any
attempt on the part of the taxpayer to evade payment.
Addition like the 50% surcharge to the main tax are not
penalties but civil administrative sanctions, provided primarily as a
safeguard for the protection of the state revenue and to reimburse
the government for the heavy expense of investigation and the
loss resulting from the taxpayer's fraud. (Helvering vs. Mitchell,
303 U.S. 390, 82 L. Ed. 917; Spies vs. U.S., 317 U.S. 492). This
is made plain by the fact that such surcharges are enforceable,
like the primary tax itself, by distraint or civil suit, and that they are
provided in section 4 , of Repub lic Act No that is separate and
distinct from that providing for criminal prosecution (Section 7).
a. False vs Fraudulent return
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under a mistake of fact, that is, when it was not aware that the
transactions it had with PAGCOR were zero-rated at the time it
made the payments. In UST Cooperative Store v. City of Manila,
15 SCRA 656 (1965), we explained that there is erroneous
payment of taxes when a taxpayer pays under a mistake of fact,
as for the instance in a case where he is not aware of an existing
exemption in his favor at the time the payment was made. Such
payment is held to be not voluntary and, therefore, can be
recovered or refunded.
Tax refunds are based on the principle of quasi-contract or
solutio indebiti and the pertinent laws governing this principle are
found in Arts. 2142 and 2154 of the Civil Code, x x x When money
is paid to another under the influence of a mistake of fact, that is
to say, on the mistaken supposition of the existence of a specific
fact, where it would not have been known that the fact was
otherwise, it may be recovered. The ground upon which the right
of recovery rests is that money paid through misapprehension of
facts belongs in equity and in good conscience to the person who
paid it.
The Government comes within the scope of solutio indebiti
principle as elucidated in Commissioner of Internal Revenue v.
Firemans Fund Insurance Company, 148 SCRA 315 (1987),
where we held that: Enshrined in the basic legal principles is the
time-honored doctrine that no person shall unjustly enrich himself
at the expense of another. It goes without saying that the
Government is not exempted from the application of this doctrine.
2. Taxpayer / withholding agent
Commissioner of lnternal Revenue vs. Procter & Gamble
Philippine Manufacturing Corporation
Since the claim for refund was filed by P&G-Phil., the
question which arises is: 10 P&G-Phil. a taxpayer under Section
309 (3) of the NIRC? The term taxpayer is defined in our NIRC
as referring to any person subject to tax imposed by the Title [on
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petitioner corporation had until April 15, 1984 within which to file
its claim for refund. Considering that ACCRAIN filed its claim for
refund as early as December 29, 1983 with the respondent
Commissioner who failed to take any action thereon and
considering further that the non-resolution of its claim for refund
with the said Commissioner prompted ACCRAIN to reiterate its
claim before the Court of Tax Appeals through a petition for review
on April 13, 1984, the respondent appellate court manifestly
committed a reversible error in affirming the holding of the tax
court that ACCRAIN's claim for refund was barred by prescription.
suffered a net loss in 1990, and that it could not have applied the
amount claimed as tax credits.
Substantial justice, equity and fair play are on the side of
petitioner. Technicalities and legalisms, however exalted, should
not be misused by the government to keep money not belonging
to it and thereby enrich itself at the expense of its law-abiding
citizens. If the State expects its taxpayers to observe fairness and
honesty in paying their taxes, so must it apply the same standard
against itself in refunding excess payments of such taxes. Indeed,
the State must lead by its own example of honor, dignity and
uprightness.
PHILAM ASSET MANAGEMENT VS CIR ***NOSCRA***
These two options under Section 76 are alternative in nature.The
choice of one precludes the other.
Whether the FIFO principle is applied or not, Section 76
remains clear and unequivocal. Once the carry-over option is
taken, actually or constructively, it becomes irrevocable. Petitioner
has chosen that option for its 1998 creditable withholding taxes.
Thus, it is no longer entitled to a tax refund of P459,756.07, which
corresponds to its 1998 excess tax credit. Nonetheless, the
amount will not be forfeited in the governments favor, because it
may be claimed by petitioner as tax credits in the succeeding
taxable years.
CIR VS BPI 178940 ***NOSCRA***
There would be no unjust enrichment in the event of denial
of the claim for refund, in cases where the taxpayer opted to
carry-over its excess creditable withholding tax (CWT) under
Section 76 of the NIRC of 1997, as amended, because there
would be no forfeiture of any amount in favor of the government.
The amount being claimed by petitioner would remain in his
account until it is fully utilized in succeeding taxable years. It is
worthy to note that unlike the option for refund, which prescribes
after two (2) years from the filing of the FAR, there is no
prescriptive period for the carrying over of the same
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powers are such powers as are necessary for the ordinary and
efficient exercise of jurisdiction; or are essential to the existence,
dignity and functions of the courts, as well as to the due
administration of justice; or are directly appropriate, convenient
and suitable to the execution of their granted powers; and include
the power to maintain the courts jurisdiction and render it
effective in behalf of the litigants. Thus, this Court has held that
while a court may be expressly granted the incidental powers
necessary to effectuate its jurisdiction, a grant of jurisdiction, in
the absence of prohibitive legislation, implies the necessary and
usual incidental powers essential to effectuate it, and, subject to
existing laws and constitutional provisions, every regularly
constituted court has power to do all things that are reasonably
necessary for the administration of justice within the scope of its
jurisdiction and for the enforcement of its judgments and
mandates. Hence, demands, matters or questions ancillary or
incidental to, or growing out of, the main action, and coming within
the above principles, may be taken cognizance of by the court
and determined, since such jurisdiction is in aid of its authority
over the principal matter, even though the court may thus be
called on to consider and decide matters which, as original
causes of action, would not be within its cognizance.
6. Jurisdiction of CTA EB
7. Suspension of Collection of Tax
8. Appeal to the SC
VII. Abatement of Tax / Tax Compromise
Secs. 7 and 204, NIRC
RR No. 13-01
RR No. 30-02
RR No. 8-04
RR No. 4-12
RR No. 9-13
A. Authority of CIR to abate taxes
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