***Jon Jamora*** [Road Map on Taxation Law Review]

Compensation Income (p115) Fringe benefit and withholding taxes (p119)

***Mamalateo*** (2008) !!![Midterms]!!! General Principles (p1) - Taxes; Levied by the Executive (p4) Definitions (Sec. 22) - person; individual, a trust, estate or corporation. - ordinary income; includes any gain from the sale or exchange of property which is not a capital asset or property described in Section 39(A)(1). Any gain from the sale or exchange of property which is treated or considered, under other provisions of this Title, as 'ordinary income' shall be treated as gain from the sale or exchange of property which is not a capital asset as defined in Section 39(A)(1). The term 'ordinary loss' includes any loss from the sale or exchange of property which is not a capital asset. Any loss from the sale or exchange of property which is treated or considered, under other provisions of this Title, as 'ordinary loss' shall be treated as loss from the sale or exchange of property which is not a capital asset. minimum wage earner; worker in the private sector paid the statutory minimum wage, or to an employee in the public sector with compensation income of not more than the statutory minimum wage in the nonagricultural sector where he/she is assigned." Kinds of Taxpayers (p76) - Persons Subject to Income Tax (p75) - Corporations o Improperly Accumulated Earnings Tax (Sec. 29) - Sources of income taxable (p77) Gross Income (p100) - Net Income (p100) - Taxable Income (p111) - Distinctions between Income and Capital (p113) - Tests in determining income (p113) - Significance of knowing character of Income (p115)

Exclusions from Gross Income (p159) - Return of capital (p159) - Value of property acquired by gift; see received on account of services; demandable debt (p164) Return of Capital and Deductions (p190) - Deductibility; must be expressly given by law (p192) - Deductions from Gross Income (p193) - Business Expenses (p196) - Professional Expenses (p197) - Taxes (p203) - Losses (p205) - Bad debts (p206) - Charitable Contributions (p210) - Allowable Deductions (p214) - Optional Standard Deductions (p212) - Non deductible expenses (p219) Tax Bases and Rates (p221) - Domestic Corporations o Minimum Corporate income Tax (p223) Ordinary and Capital Assets (p234) - Sale (p234) - Importance of difference (p234) - Capital Gains (p239) Tax Remedies; Introduction (p395) - Access powers of the BIR (p398) - Powers of the Commissioner (p396) o Rulings of first impression; refer to the rulings, opinions and interpretations of the Commissioner of Internal Revenue with respect to the provisions of the Tax Code and other tax laws without established precedent, and which are issued in response to a specific request for ruling filed by a taxpayer with the Bureau of Internal Revenue. Provided, however, that the term shall include reversal, modifications or revocation of any existing ruling. o Power to decide disputed assessments (p400) Assessment and Protest (p470) - Assessment (p470)

!!![Finals]!!! Accounting Methods (p251) - Filing of Tax Returns (p258) o Domestic Corporations (p261-262) - Construction Contracts (Sec. 48) Withholding Taxes (p264) - Withholding Agent (p270) Tax Remedies; Introduction (p395) - Questioning the Validity of an RMO (p397) - Powers and Duties of the BIR (p396) o Power to Assess Correct Amount of Tax (p402) Prescription (p489) - Period to Collect the assessed tax (p495) o Waiver of the defense of prescription (p506) Local Government Code; Local Business Taxes (p559) - Residual Taxing Powers (p559) Real Property Tax (p575) - Types of Real Property Tax (p576) Tariff and Customs Code (p599) - Bases of Assessment Duty; Dutiable value; Sec. 201 TCC; (p611) - Remedies (p621)

Administrative Remedies of the Government (p408) - Distraint of personal property; levy of real property; garnishment of bank deposits o Garnishment; requirements (Sec. 208) - Compromise (p426) o Cases not subject to compromise (p427) Remedies of the Tax Payer (p459) o Administrative remedies o Judicial Remedies (p459) o Substantive Remedies (p460) o Procedural Remedies (p462)

Assessment and Protest (p470) - 203/222; when must an assessment be made? (p475) - Forms of Protest (p478) - Types of Assessments (p473) o Jeopardy Assessment; a tax assessment made by an authorized Revenue Officer without the benefit of complete or partial audit, in light of the ROs belief that the assessment and collection of a deficiency tax will be jeopardized by delay caused by the Taxpayers failure to: Comply with audit and investigation requirements to present his books of accounts and/or pertinent records, or Substantiate all or any of the deductions, exemptions or credits claimed in his return.

***Beda Charts*** (2012 ) General Principles Taxation vs police power vs eminent domain (p4) Tax vs license fee Tax vs penalty Tax vs tariff Tax vs compromise penalty Tax vs subsidy Tax vs revenue Tax avoidance vs Tax Evasion (p7) Income Taxation Income vs capital (p49) Income and taxpayer Taxable estate vs taxable trust (p56) Share of a partner in GPP vs share of a partner in Taxable/Business partnership (p57) Fringebenefits; case & monetary value (p91) Exclusion vs deduction vs personal exemption (p96) Summary; allowance of optional standard deduction (p97) Tax Crredit vs deduction (p108) Depletion vs depreciation (119) Summary; allowance of personal exemptions (p124) Final withholding tax system vs creditable withholding tax system Tax Payers chart (p157)

Tax Remedies Outline of remedies (p212) Normal asessment vs abnormal assessment vs collection without assessment (p216) Reply vs protest (p233) Delinquency vs deficiency tax (225) Distraint vs levy (p229) Compromise vs abatement (p230) Reinvestigation vs reconsideration (p238) Tax refund vs tax credit (243) Comparison of remedies; distraint /levy (p250) Period of collection of taxes; BIRC vs Local taxes vs Real property taxes (p252) Assessment process and the taxpayers remedies from a tax assessment (p256) Procedure; distraint and levy (p257) CTA -

Quorum; session, presence of vs decision; affirmative vote (p259)

Real Property Tax Classes of real property for assessment purposes; land use & assessment level not to exceed.... (268) Basic real property tax; LGU & rate (p269) Payment and collection of tax (274) Comparison; local taxes vs real property tax (p278) Tax payers remedies involving collection of real property tax (p279) Local Taxation Local Government taxation vs Real Property taxation (p281) Business tax vs Income Tax (p288) Community Tax (p291) Taxing Powers of LGUs (p294) Outline of remedies; LGU/TP (p297) Tax Payers remedies from assessment of local taxes other than real taxes (p301) Procedure for distraint and levy; local taxes (p302) Tariff and Customs Code Specific articles under conditionally free importations (307) Comparison on special duties (p330)

Comprehensive problems in Income tax Kinds of tax payers (p143) Gross income, exclusions, and deductions from gross income (p150) VAT -

Summary of increased VAT threshhold (p167) Sale of realproperties; installment plan vs Deferred Plan Zero rated vs effectively zero rated (p176) Zero rated sales vs vat exempt sales (p180) Exempt transaction vs exempt party (p180)

Transfer Taxes Estate vs Donors Tax (p192) Standard deduction vs optional standard deduction (p203)

CIR vs Pascor Realty (G.R. No. 128315 June 29, 1999) 1. If the filing of a criminal complaint with the DOJ can be construed as a formal assessment. An assessment must be sent and received by the tax payer; it must demand payment of the taxes described within a specific period. In this case; the revenue officer's affidavit merely contained a computation of the respondents tax liability; it was addressed to the justice secretary and it did not state a demand for payment; although the revenue officers recommended the issuance of an assessment; the Commissioner opted to file a criminal case for tax evasion 2. Is an assessment necessary before the filing of a criminal complaint? The issuance of a n assessment must be distinguished from a the filing of a criminal complaint; before an assessment, a PAN must be sent to the tax payer; the TP then is given a chance to prove that the assessment is unwarranted; in contrast; a a criminal charge is filed directly with the DOJ; he is then notified that a criminal case is filed against him Marcos II vs CA (G.R. No. 120880 June 5, 1997) If the BIR; has the authority to collect; via summary remedy of levy; upon the sale of real properties of the decedent; estate tax deficiencies without court authority The approval of the court is not a requirement in the collection of estate taxes. There is nothing in the Tax Code and in the remedial laws that implies the need for court approval. A probate court should not authorize an administrator or an executor of the estate to deliver any distributive share unless it is shown via certification (by the CIR) that the estate taxes have been paid. Questioning the validity of the BIR's decision to assess estate taxes; resort to administrative and judicial avenues; protesting an assessment

Meralco Securities Corporation vs Saveliano (G.R. No. L-36181 October 23, 1982) 1. If the CFI judge has jurisdiction over the case; on imposition of a deficiency tax assessment The judge has no jurisdiction; subject matter falls within the scope of cases exclusively within the jurisdiction of the CTA; CTA has exclusive appellate jurisdiction t review by appeal decisions of the CIR involving disputed assessments; in this case the question of imposing a deficiency tax assessment within scope of disputed assessments 2. if the issuance of a deficiency assessment is a prerogative of the CIR (not reviewable by Mandamus) The CIR is charged with the administration of revenue laws; primary responsibility of the executive branch of government; mandamus does not lie against the commissioner in compelling him to impose a tax assessment found by him improper; discretionary power; in absence of arbitrariness/grave abuse as to go beyond the statutory authority; subject to contrary judgment of others Sy Po vs CTA (G.R. No. 81446 August 1988) 18,

If the assessments are valid; based on the best evidence obtainable; considering that Po Bien Sing failed to present their books of accounts The assessments are valid; Best evidence obtainable applies when a tax report required by law for the purpose of an assessment is not available (or incomplete/fraudulent); Tax assessments are presumed correct and in good faith; duty of tax payer to prove otherwise CIR vs CA, CTA, and Fortune Tobacco Corporation (G.R. No. 119761 August 29, 1996)

If the subject Revenue Memorandum Circular is merely an interpretative ruling of the BIR;

effective without any need for notice/hearing nor and publication; not discriminatory (applies under similar circumstances to all locally manufactured cigarettes) legislative rule vs interpretative rule; legislative rules are designed to implement a primary legislation (requires a public hearing); interpretative rules are designed to provide guidelines to the law which the administrative agency is in charge of enforcing; if the admin rule substantially adds to the burden of those governed, then those directly affected must have a chance to be heard; The RMC in this case placed the said cigarettes within the scope of the amendatory law subjecting them to an increased tax rate; said RMC legislated under its quasi legislative authority; requirements of notice, hearing and publication should not have been ignored CIR vs Benguet Corporation (G.R. Nos. 134587 & 134588 July 8, 2005) If the determination of retroactivity depends on whether the respondent would suffer prejudice from the retroactive application of the said VAT ruling When the input VAT exceeds output VAT, the excess would be carried over for vat liabilities for succeeding quarters; input VAT attributable to zero rated transactions can be refunded or credited; taxpayer has the option of not to take on any vat by exercising his right to pass on the VAT costs; retroactive application of the said ruling here withdrew this option from the respondent. he became the unwilling debtor of the BIR of the amount equivalent to the total VAT cost; suffered economic prejudice; while the government is not estopped from collecting taxes due to mistakes of its agents; there are exceptions such as; in this case, the CIR is precluded from adopting a position inconsistent with one previously taken where injustice would result; here the respondent before entitled to a tax refund/credit but now being made to pay deficiency taxes due to retroactive change in VAT categorization of respondent's transactions with the Central Bank

CIR vs Burmeister and Wain Scandinavian Contractor Mindanao Inc. (G.R. No. 153205 January 22, 2007) If the requirements for services to be zero rated have been complied with; considering that payment of its service fees was in acceptable foreign currency; there was a remittance of foreign currency into the Philippines; accounting of remittance was according to BSP rules; and that services need not be consumed abroad to be zero rated The tax code not requires that services be other than processing/manufacturing/ repacking of goods and payable in an acceptable foreign currency in accordance with BSP rules; the RECIPIENT of such services MUST be doing business OUTSIDE the Philippines; when the provider and recipient of services are both doing business in the Philippines, their transaction is subject to the regular VAT unless it falls under the other provisions of sec. 102 (b) CIR vs Hantex Trading Co. (G.R. No. 136975 March 31, 2005) If it was proper for the Commissioner to resort to the best evidence obtainable; photocopies of the import entries in the Bureau of Customs and the respondents financial statements filed with the SEC; can the photocopies import entries be used in making an assessment? best evidence includes corporate and accounting records of the tax payer subject of the assessment process, the accounting records of other tax payers in the same line of business; includes any document gathered by internal revenue officers from other tax payers who had personal transactions from the subject taxpayer; and any document from government offices; BUT the best evidence obtainable DOES NOT include mere photocopies of records/documents; in making an assessment, the commissioner cannot anchor the same on mere photocopies; have no probative weight; tax assessments by tax examiners are presumed correct but it must be based on sufficient evidence; prima facie correctness does not apply when there is proof

that an assessment is without foundation (arbitrary) if the tax deficiency assessment based on certified copies of profit and loss statements submitted to the SEC is illegal The commissioner found that the importation was under declared based on machine copies of the consumption entries; the CERTIFICATIONS did not authenticate the machine copies; the computations of the BIR on the quantity and cost of importations have no factual basis BPI vs CIR (G.R. No. 139736 October 17, 2005) If the Commissioner in collecting on the said assessment was barred by prescription; statute of limitations on collection of deficiency DST The BIR has 3 years from the date of actual filing/last date prescribed by law (whichever comes later) to assess internal revenue taxes; in case of a false or fraudulent return, the prescriptive period shall be 10 years from the discovery of such fraud; when the BIR issues an assessment, from such assessment the it has another 3 years to to collect; period to collect begins to run on the date the assessment notice had been released/mailed/sent to the tax payer. in this case, the service of warrant of distraint was beyond the prescriptive period from collection of the deficiency DST exceptions to the prescriptive period on collection; can only be interrupted or suspended by a valid waiver Estate of the Late Juliana Diez Vda, De Gabriel vs CIR (G.R. No. 155541 January 27, 2004) If the service on Philtrust of the demand letter and assessment notice was a valid service on the petitioner; and if Philtrust's inaction could bind the petitioner Service to Philtrust was improper; relationship between the decedent and philtrust was one of agency which was severed when upon the death

of one of the parties; since there was never any VALID NOTICE of this assessment, it could not become final and executory and incontestible; absent an assessment, no proceedings can be initiated in court for the collection of the tax; claim for collection also beyond the prescriptive period CIR vs Tulio G.R. No. 139858 October 25, 2005 If the period for the collection of deficiency percentage taxes have prescribed; considering that the respondent failed to file a tax return The lower court erroneously applied the 3 year prescriptive period from the filing of a tax return; Respondent failed to file a tax return, such a situation is covered by sec. 223 providing a ten year prescriptive period within which a proceeding in court may be filed; 3 instances where the 3 year prescriptive period does not apply 1. false return. 2. fraudulent return. 3. failure to file a return (period to assess the tax is 10 years from the discovery of fraud, falsification, or omission); in this case the respondent failed to file his tax returns for 1986 and 1987 to which the 10 year prescriptive period applied; respondent failed to question the deficiency assessments making them final and executory Oceanic Wireless vs CIR (G.R. No. 148380 December 9, 2005) CIR's final action on a disputed assessment; when a demand letter is is final Demand letter when considered final; conditioned on the language used; the CIR should always indicate in clear language his final determination of the disputed assessment; rationale: to prevent the taxpayer from continually delaying the finality of assessment/on the CIR's side it would encourage his office to to conduct a thorough study of every questioned assessment; CAB; constitutes final action as it reiterated the tax deficienccies due and requested payment (failure would constitute a warrant of distraint)

If a demand letter for tax deficiency issued by a subordinate officer (acting in behalf of the Commissioner) is deemed final and executory subject to appeal Sec 7; authority if the Commissioner to delegate powers vested in him except of for certain instances; CAB issuance of demand letter by the Chief of the Accounts Receivable and Billing Division are not within the exceptions; Sec 6 provides the tax or any deficiency shall be paid upon notice and demand from the Commissioner or his duly authorized representative; the authority to make assessments may be delegated Protesting an assessment; request for reconsideration 30 days from tax deficiency assessment or else it becomes final; if the protest is denied in whole or in part; 30 days from (receipt of decision) TP may appeal to the CTA;if (not acted on) 180 days from the submission of the documents, the TP may appeal to the CTA; CAB petitioner failed to bring the matter to the CTA; decision attained finality Philam Asset Management vs CIR (G.R. Nos. 156637/162004 December 14, 2005) Entitlement to refund; Corporations; Final Adjustment Return; if the sum of the quarterly tax payments during the taxable year is not equal to the total tax due; the corporation shall either pay the excess or be refunded the the excess anound paid; in case entitled to refund of excess estimated quarterly income taxes paid; the refundable amount shown on its FAR may be credited against the estimated quarterly income tax liabilities for the taxable quarters of the succeeding taxable year (NIRC of 1997 ) Sec. 76; offers 2 options to a taxable corporation whose total quarterly income tax payments exeeds its total income tax due; 1) filing a tax refund. (any tax that is paid in excess may be refunded provided the TP properly applies for the refund) 2) availing of tax credit. (works by applying the refundable amount, as shown in the FAR of a given year, against estimated quarterly income tax liabilities for a succeeding year);

alternative in nature; choice of one precludes the other Reason for requiring that a choice be made in the FAR; to ease tax administration; a TP that makes a choice expresses certainty while one who does not shows simple negligence If the failure of the petitioner to indicate in its ITR the option to refund is fatal to its claim for refund CAB; it is not; entitled to refund; although it did not mark the box for refund; neither did it perform any act indicating that it chose tax credit (in none of its quarterly returns for 1998 did it apply the excess creditable taxes); it filed a claim later on for refund of excess taxes withheld in 1997 (Sec. 76 as amended by RA 8424) ... if the sum of the quarterly tax payments is not equal to the entire taxable income the corp shall either; 1) pay the balance due. 2) carry over the excess credit. 3) be credited or refunded with the excess amount paid; the carry over option once chosen is irrevocable; once chosen no application for tax refund or an issuance of tax credit is allowed If the petitioner is entitled to the refund of its 1998 excess income tax payments; considering that it did not mark the carry-over option Based on petitioners acts; it chose carry over; in its 1999 FAR it filled out the portion "Prior year's excess credits" which means it categorically availed of the carry over option Philippine Journalists Inc. vs CIR (G.R. No. 162852 December 16, 2004) If only decisions of the BIR denying a request for recon or reinvestigation maybe appealed to the CTA; here (P) did not file a request for recon/rein; Can the (P) bring the case to the CTA arguing that the warrant of distraint was illegal and that no assessment was issued based on an invalid waiver of prescription (Jurisdiction of the CTA)

SEC. 7. Jurisdiction. The Court of Tax Appeals shall exercise exclusive appellate jurisdiction to review by appeal, as herein provided (1) Decisions of the Commissioner of Internal Revenue in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties imposed in relation thereto, or other matters arising under the National Internal Revenue Code or other laws or part of law administered by the Bureau of Internal Revenue Appellate jurisdiction; not limited to decisions of the CIR on (disputed)assessments/refunds; Second part covers cases that arise out of the NIRC or related laws administered by the BIR; CAB; it has jurisdiction to determine of the warrant of distraint/waiver of prescription is valid if the requisites in RMO 20-90 on the requisites of a valid waiver of prescription are only formal; should compliance be strictly observed? 203/222; prescription on assessment and collection of taxes; to safeguard the TP from [unreasonable investigation] (cases where the period of assessment extends indefinitely; deprives TP from assurance of being subjected to further investigations); law on prescription; a remedial measure; should be interpreted in a way conducive to bringing about its purpose; protection to the TP within the contemplation of the Commission (Requisites; valid waiver of prescription) - must be in the form identified and must contain the date/period - must be signed by the TP must be signed by the CIR or the revenue official authorized; must indicate date of acceptance (Revenue officials authorized to sign; waiver) - National Offices[cases involving more than 1 Million]; Commissioner - Regional Offices [tax cases pending investigation; regardless of amount]; Revenue District Officer

RMO 20-90; implements 203/222 relating to the prescription for assessment and collection; it must be strictly followed Waiver of prescription; is a derogation of TP's right to security against prolonged/unscrupulous investigations; it must be strictly construed; it is an agreement between the TP and the BIR that the period to issue an assessment and collect taxes is extended to a certain date; it does not mean that the TP unequivocally relinquishes the right to invoke prescription CAB; Waiver invalid; defective on both sides ([signed] by (P)'s comptroller; signed only by Revenue District officer despite the amount being over 1million); [no specified date was agreed on]; [date of acceptance defective as well]; CTA noted that acceptance was unlikely since Revenue officials must conduct an inventory first of their pending cases; on date waiver was made; Ms Sarmiento was not the RDO at the time Effect of invalid waiver; prescriptive period not tolled/extended effect of a waiver made beyond the 3 year prescriptive period; invalid waiver Dizon vs CTA (G.R. No. 140944 April 30, 2008)

(allowable deductions from gross estate of decedent) If the claims of the creditors can be allowed as deductions from the gross estate of Jose; despite the claims being condoned through compromise agreements by the estate with its creditors should the deductible amount for the claim against the estate be fixed as of the [date of death] or should it adjusted to reflect [post death developments]; post death developments are not material in determining amount of deduction [Date of death valuation principle]; no law provides that post death developments mu7st be considered in determining the net value of the

estate; tax burdens are not presumed; any doubt resolved AIGAINST taxation; [Claims required to be presented]; debts/demands of a pecuniary nature which could have been enforced against the deceased IN HIS lifetime or liability contracted by the deceased BEFORE his death; claims existing at the time of death are significant to the determination of allowable deductions the deficiency estate taxes assessed against the estate of jose fernandez; ordered nullified Pilipinas Shell Petroleum Corporation vs CIR (G.R. No. 172598 December 21, 2007) If Shell is allowed to use the Tax Credit Certificate (TCC) transferred from a Board of Investment Registered entities;(R) argues that considering that the TCCs are subject to a post audit results; a suspensive condition; Issuance of a TCC; subject to a condition that a post audit will be conducted to determine if the holder is [Qualified] for its issuance; if the suspensive condition suspends the effectivity of the TCCs as payment until after post audit It does not suspend the effectivity; a [tax credit] is the amount due to a tax payer resulting from an over payment of a tax liability or erroneous payment of tax [TCC]; a certification duly issued to the TP named; by the Commissioner/duly autho rep; reduced in a BIR accountable form; in accordance with formalities; acknowledging that grantee TP entitled to Tax credit; money value of which may be used in satisfaction of his internal revenue tax liability [it is an undertaking by the government through the BIR or the DOF];acknowledging that a TP is entitled to a certain amount of tax credit; either from an overpayment or other instances granted by law; it is a direct benefit granted by law; it is [Transferrable] [immediately valid and effective]; the effectivity of the TCC is not dependent on the outcome of the post audit; it is not subject to post audit as a suspensive condition

[only conditions; TCCs subjected to]: - in the event of computational discrepancy; post audit/adjustment - reduction for any outstanding obligation with the BIR/BOC - revalidation; in case not utilized within 1 year [transferability of TCCs] - all TCC issued to BOI reg'd entities maybe trans for under conditions provided - transferee must be a BOI-reg'd firm - TCC may be applied for taxes, duties, fees due to the national gov [Shell a transferee in GF]; Shell secured several approvals/verifications of various gov agencies before utilizing transferred TCCs; not shown to have done any fraudulent act; 222 (a) does not apply; 3 year prescriptive period had set in if compliance with the statutory and procedural due process was violated by the CIR; RR-1299; NO PAN was issued (pre assessment notice) (R) did not follow the proper procedure; no notice of informal conference (taken out in RR 18-2013; no longer applicable); no PAN was issued AS REQUIRED; CAB Shell was "merely informed" of its tax liability; CIR only relied on the findings of the Center which did not give Shell the opportunity to air its side

CIR vs Primetown Property Group (G.R. No. 162155 August 28, 2007) recovery of taxes erroneously collected; prescribes in 2 years from the date of payment payment of FAR; CAB; claim for refund commenced on that date counting of periods; if months designated by name (computed by number of days they have); 1st day excluded last day included; years (365 days each) CTA's argument; 2 year prescriptive period = 730 days; since 2000 was a leap year (a leap year contains 366 days; eg until Feb 29 instead

of the usual Feb 28); petition was 731 days from filing of FAR; filed beyond reglementary period If tax refunds (in the nature of exemption; construed strictly against claimants) as to the prescriptive period

- CAB; tax refund was filed on the last day of the regelementary period CIR vs Reyes (G.R. No. 159694 January 27, 2006) If the assessment against the estate is valid; considering that the heirs were allegedly not aware of the facts and the law that the assessment is based on CAB; not informed in writing of the facts and the law on which the assessment is based; merely notified of the findings (which was permissible under the old law) (At present) - must be informed of the law and the FACTS on which assessment is based to be valid - the PAN and the demand letter given; lack of basis; there is an insufficiency of details as to itemized deductions; the Court cannot countenance estimates capriciously made - non compliance with 228 = void The letter of authority received by the (R) was not the notice required under the law; it was only for the purpose of investigation

Incompatibility between legal periods; Civil Code vs Admin Code of 1987 (Admin code of 1987) [year] = 12 calendar months; [month]= 30 days; [day] = 24 hours; [calendar month] = month designated in the calendar without regard to the number of days it may contain; period of time running from the beginning of a certain numbered day up to BUT not including corresponding numbered day of the next month [if there is no sufficient number of days in the next month] up to the last day of that month "exclude the first include the last" example: [1 calendar month] from December 31, 2007 - January 1 to Jan 31 [1 calendar month] from January 31, 2008 - Feb 1 to Feb 29 (if there isnt a sufficient number of days in the next month; up to and including the last day of that month) Both the Civil Code and the Admin code of 1987 deal with legal periods; the Admin code being a more recent law governs the computation of legal periods; under the Admin code; a year is composed of 12 calendar months; the number of days is irrelevant Applying the same to the CAB; 2 year prescriptive period from April 14, 1998 (exclude the first include the last) - consists in total of 24 months calendar months - eg 1 calendar month from April 14 is May 15

Can the procedure for protesting an assessment be applied retroactively? - Yes; since it is a remedial statute that does not take away vested rights; the CIR should have required the assessment officers to follow the new mandate of the law (to inform TP on facts and the law) if the compromise was valid - since the assessment was void; nothing has been settled or finalized; premature for a compromise to be perfected CIR vs First Express Pawnshop Company (G.R. Nos. 172045-46 June 16, 2009) If the assessment became final; considering that the CIR requested (R) to present proof of payment of DST; in a letter reply, (R) could not produce proof; (R) did not submit any relevant

supporting documents; assessment became final

CIR

claims

the

Failure to submit relevant supporting documents did not render the assessment final; (R) submitted its protest; he attached its general information sheet and balance sheet; proof as to the DST payment was not necessary as such document does not exist (and the (R) isnt liable for such) (Relevant supporting documents) - are documents necessary to support the legal basis in disputing a tax assessment; the BIR cannot demand what [type of supporting documents] should be submitted; or else TP would be at the mercy of the BIR When the CIR did not reply to (R) non compliance with presentation on proof as to DST; the protest was not acted on; sec 228; 180 days from submission of documents; TP may appeal to the CTA within 30 days from the lapse of the 180day period; (R)complied with the requisites on 228; the assessment did not become final CIR vs Enron Subic Power Corporation (G.R. No. 166387 January 19, 2009) Was the (R) informed of the legal and factual bases of the deficiency assessment; considering that the CIR furnished Enron's representative a 5 day letter along with a copy of the audit working paper (which allegedly showed the legal and factual basis); was there compliance with the requirements given by RR 12-99 and the NIRC? The CIR did not comply with the requirements of the law; the advice of tax deficiency and the preliminary 5 day letter; were not legal substitutes for the mandatory notice and writing of the legal and factual basis of an assessment; Just because the CIR issued an advice, a preliminary letter during the pre-assessment stage and a final notice, in the order required by law, does not necessarily mean that Enron was informed of the law and facts on which the deficiency tax assessment was made.

The law requires that the legal and factual bases of the assessment be stated in the formal letter of demand and assessment notice. Thus, such cannot be presumed. Otherwise, the express provisions of Article 228 of the NIRC and RR No. 12-99 would be rendered nugatory. The alleged factual bases in the advice, preliminary letter and audit working papers did not suffice. There was no going around the mandate of the law that the legal and factual bases of the assessment be stated in writing in the formal letter of demand accompanying the assessment notice. We note that the old law merely required that the taxpayer be notified of the assessment made by the CIR. This was changed in 1998 and the taxpayer must now be informed not only of the law but also of the facts on which the assessment is made TFS vs CIR (G.R. No. 166829 April 19 2010) 1) if the decision became final upon being filed beyond the reglementary period in the CTA; considering that the petition for review was filed with the CA four months after the effectivity of (RA 9282) which provides for the jurisdiction to review decisions issued by divisions of the CTA to be under the [CTA en banc] Petitioner likewise cannot validly claim that its erroneous filing of the petition with the CA was justified by the absence of the CTA rules and regulations and the incomplete membership of the CTA En Banc as these did not defer the effectivity26 and implementation of RA 9282. In fact, under Section 2 of RA 9282,27 the presence of four justices already constitutes a quorum for En Banc sessions and the affirmative votes of four members of the CTA En Banc are sufficient to render judgment.28 Thus, to us, the petitioners excuse of "inadvertence or honest oversight of counsel" deserves scant consideration. However, we will overlook this procedural lapse in the interest of substantial justice. Although a client is bound by the acts of his counsel, including the latters mistakes and negligence, a departure from this rule is warranted where such

mistake or neglect would result in serious injustice to the client.29 Procedural rules may thus be relaxed for persuasive reasons to relieve a litigant of an injustice not commensurate with his failure to comply with the prescribed procedure.30 Such is the situation in this case. 2) VAT on pawnshops; is the absence of any provision providing for a tax exemption render the (P)'s pawnshop business subject to VAT Imposition of VAT on pawnshops for the tax years 1996 to 2002 was deferred Petitioner disputes the assessment made by the BIR for VAT deficiency in the amount of P11,905,696.32 for taxable year 1998 on the ground that pawnshops are not included in the coverage of VAT. Guided by the foregoing, petitioner is not liable for VAT for the year 1998. Consequently, the VAT deficiency assessment issued by the BIR against petitioner has no legal basis and must therefore be cancelled. In the same vein, the imposition of surcharge and interest must be deleted In the instant case, we are constrained to disregard procedural rules because we cannot in conscience allow the government to collect deficiency VAT from petitioner considering that the government has no right at all to collect or to receive the same. Besides, dismissing this case on a mere technicality would lead to the unjust enrichment of the government at the expense of petitioner, which we cannot permit. Technicalities should never be used as a shield to perpetrate or commit an injustice.