TAX REMEDIES UNDER NIRC

I. Assessment of Internal Revenue Taxes

A. Defnition/nature/efect/basis
1. Meaning of tax assessment It is the ofcial action of an ofcer authorized by
law in ascertaining the amount of tax due under the law from a taxpayer. This
action necessarily involves:
a. the computation of the sum due
b. giving notice to that e!ect to the taxpayer and
c. the ma"ing# simultaneously with or sometime after the giving of notice# of
a demand upon him for the payment of the tax de$ciency stated.
%. Tax audit is the process of examining# going over# or scrutinizing the boo"s and
records of the taxpayer to ascertain the correctness of the tax declared and paid
by the taxpayer. It can only be performed upon a &etter of 'uthority issued by the
(ommissioner or )egional *irector.
+. Letter of Authority is a commission granting a revenue ofcer assigned to
perform assessment functions the power to conduct an examination of the boo"s
and records of a taxpayer within the ,urisdiction of the district in order to collect
the correct amount of tax# or to recommend the assessment of any de$ciency tax
due.
-. Pre-assessment notice . is a written notice given to a taxpayer informing him
of the $ndings of the /I) ofcer0s relating to a de$ciency in his tax return#
indicating therein the law and the facts on which the assessment is made and
re1uiring the taxpayer to respond within a given period# otherwise# the
(ommissioner or his duly authorized representative shall issue an assessment
based on his $ndings.
Instances where pre.assessment notice 23T re1uired:
a. when the $nding for any de$ciency tax is the result of mathematical error
in the computation of the tax as appearing on the face of the return
b. when the discrepancy has been determined between the tax withheld and
the amount actually remitted by the withholding agent
c. when a taxpayer who opted to claim a refund or tax credit of excess
creditable withholding tax for a taxable period was determined to have
carried over and automatically applied the same amount claimed against
the estimated tax liabilities for the taxable 1uarter or 1uarters of the
succeeding taxable year
d. when the excise tax due on excisable articles has not been paid
e. when an article locally purchased or imported by an exempt person# such
as# but not limited to# vehicles# capital e1uipment# machinery and spare
parts# has been sold# traded or transferred to non.exempt persons.
4. Notice of assessment a notice given to the taxpayer by the /I) informing him
of the amount of de$ciency tax for which the taxpayer is being assessed based on
the $ndings of the /I) upon failure of the taxpayer to respond to the pre.
assessment notice or after an examination has been conducted.
5. Defciency the amount by which the tax properly due exceeds the sum of the
amount of the tax shown on a taxpayer6s return plus amounts previously
assessed or collected as de$ciency# less any credits# refunds# or other payments
due the taxpayer the amount a taxpayer is de$cient in his tax payments.
Dein!uency The state of a person upon whom the personal obligation to pay
the tax has been $xed by lawful assessment and thereafter fails to pay the tax
within the time limited by law.
7. "eo#ardy assessment an assessment made demanding immediate payment
of the tax due without the usual formalities in instances when the (ommissioner
believes that if the tax will be collected under normal procedures# the collection of
such tax is at ris" which might result in loss to the government.
Instances when ,eopardy assessment may be issued:
8hen it shall come to the "nowledge of the (ommissioner that a taxpayer is:
a. retiring from business sub,ect to tax or
b. intending
i. to leave the 9hilippines or remove his property therefrom or
ii. to hide or conceal his property
c. performing any act tending
i. to obstruct the proceedings for the collection of the tax for the past or
current 1uarter or year or
ii. to render the same totally or partly ine!ective unless such proceedings are
begun immediately. :;ec. 5*# ).'. <-%-=
<. Po$er of the %ommissioner to assess defciency tax based on best
e&idence obtainabe ;ec. 5/ of ).'. <-%- empowers the (ommissioner to
assess the proper tax and ma"e or amend the return based on the best evidence
obtainable :from his own "nowledge and from such information as he can obtain
through testimony or otherwise= when:
a. a report re1uired by law as a basis for the assessment of any
national internal revenue tax shall not be forthcoming within the time $xed
by laws or rules and regulations or
b. there is reason to believe that any such report is
i. false
ii. incomplete
iii. erroneous.
The return made by the (ommissioner# in this instance# shall be prima facie correct
and sufcient for all legal purposes.
'. (e!uisites of a &aid assessment
a. post.reporting notice or notice for an informal conference after the tax
audit
b. 9re.assessment notice# if re1uired
c. Issuance and receipt of 2otice of 'ssessment
i. must be issued prior to lapse of prescriptive period
ii. the written notice must state the facts and the law upon which the
assessment is based
;ec. -. Power of Commissioner to Interpret Tax Laws and Decide Tax Cases
9ower to interpret provisions of 2I)( and other tax laws exclusive and original ,urisdiction
of (I) review by ;ec. of >inance.
(ommissioner has power to decide
disputed assessments
refunds of internal revenue taxes
fees or other charges
penalties imposed in relation thereto
other matters arising under the 2I)( or other laws
administered by /I)
?xclusive appellate ,urisdiction of the (T'.
?xclusive and 3riginal
@urisdiction
)eview0'ppeal
Interpretation of tax laws (I) ;ec. of >inance :review=
*eciding tax cases (I) ?xclusive 'ppellate
@urisdiction of (T'
;ec. 4. Power of Commissioner to Obtain Information, and to Summon, Examine, and Take
Testimony of Persons
To carry out (I)6s function of:
'scertaining correctness of any return
Aa"ing a return where none has been made
*etermining the liability of any person for any revenue tax
(ollecting tax liabilities
?valuating tax compliance
(ommissioner is empowered:
1. to examine boo"s# paper# records and other data
%. to obtain any information such as
a. costs and volume of production
b. receipts or sales and gross incomes of taxpayers
c. names# addresses# and $nancial statements of
i. corporations
ii mutual fund companies
iii. insurance companies
iv. regional operating head1uarters of A2(s
v. ,oint accounts
vi. associations
vii. ,oint ventures or consortia
viii. partnerships
Information may be obtained from
'ny person other than the taxpayer
'ny ofce or ofcer of
national and local governments
government agencies and instrumentalities including
/;9
B3((s
+. to summon the person liable for tax or re1uired to $le the return
any person having possession boo"s of accounts of the person custody
of the other accounting records liable for tax care any other person
to appear before the (ommissioner or his duly authorized representative
to produce such boo"s# papers# records or other data# and to give testimony
-. to ta"e testimony of persons concerned
4. to cause revenue ofcers and employees to
ma"e a canvass of any revenue district or region and
in1uire after and concerning
all persons therein who may be liable to pay any internal revenue tax
all persons owning or having the care# management or possession
of any ob,ect with respect to which a tax is imposed.
Cowever# the (ommissioner6s authority to in1uire into ban" deposits shall be limited to:
/an" deposits of a decedent to determine his0her gross estate
/an" deposits of a taxpayer who has $led an application for
compromise of his tax liability by reason of $nancial incapacity
8aiver in writing of taxpayer6s privilege under /an" ;ecrecy &aw
)e1uired when applying for compromise of tax liability by reason of $nancial
incapacity such waiver constitutes the (ommissioner6s authority to in1uire
into ban" deposits of the taxpayer.
;ec. 5. 9ower of (ommissioner to Aa"e 'ssessments and 9rescribe 'dditional )e1uirements
for Tax 'dministration and ?nforcement
'. ?xamination of returns and determination of tax due
- Tax returns $led by taxpayers as basis for examination
- 8hen no tax return has been $led# examination may proceed based on other data
obtained by (ommissioner
- Tax or de$ciency tax assessed payable upon notice and demand from (ommissioner
or duly authorized representative
- Tax return# statement or declaration once $led cannot be withdrawn
. may only be modi$ed# changed or amended within three years from $ling
before any notice for audit or investigation has been actually served the
taxpayer
/. >ailure to submit re1uired returns# statements# reports and other documents
- empowers the (ommissioner to assess the proper tax based on the best evidence
obtainable
- (ommissioner shall ma"e or amend the return from his own "nowledge and from
such information as he can obtain through testimony or otherwise such
information deemed prima facie correct and sufcient for all legal purposes.
conditions:
- when a report re1uired to be $led is not forthcoming within the time $xed
by law.
- when there is reason to believe that any such report is false# incomplete or
erroneous.
(. 'uthority to conduct inventory.ra"ing# surveillance and to prescribe presumptive gross
sales and receipts
- when there is reason to believe that a taxpayer is not declaring his correct income#
sales or receipts for income tax purposes# the (ommissioner may
- order inventory.ta"ing of goods of goods :to be used as basis for determining
taxpayer6s internal revenue liabilities=
- place the business operations of the taxpayer under observation or surveillance
- $ndings shall be used as basis for assessing the taxes for the other months or
1uarters of the same or di!erent taxable years.
- when there is failure to issue receipts and invoices or when there is reason to believe
that the boo"s of accounts or other records do not correctly reDect the declarations
made in tax returns# (ommissioner may prescribe a minimum amount of such gross
receipts# sales and taxable base based on the sales# receipts# income or other taxable
base of other persons engaged in similar businesses under similar situations or
circumstances
*. 'uthority to terminate taxable period
- (ommissioner shall declare the tax period of any taxpayer terminated at any time
when it shall come to the "nowledge of the (ommissioner that a taxpayer
- is retiring from business sub,ect to tax
- is intending to leave the 9hilippines or to remove his property therefrom or to
hide or conceal his property
- is performing any act tending
- to obstruct the proceedings for the collection of the tax for the past or
current 1uarter or year or
- to render the same totally or partly ine!ective unless such proceedings are
begun immediately
- (ommissioner shall send the taxpayer:
- notice of such decision
- re1uest for the immediate payment of the tax for the period so declared
terminated and the tax for the preceding year or 1uarter or such portion thereof
as may be unpaid
- taxes due and payable immediately
- taxes sub,ect to all the penalties and surcharges prescribed unless paid
within the time $xed in the demand made by (ommissioner.
?. 'uthority of (ommissioner to prescribe real property values
- (ommissioner authorized to divide the 9hilippines into di!erent zones and assign
valuation of real properties in the di!erent zones
- Ealue of property for computing any internal revenue tax: whichever is CIBC?)
between
>AE as determined by (ommissioner
and
>AE as shown in the schedule of values of the 9rovincial and (ity 'ssessors
>. 'uthority of (ommissioner to in1uire into ban" deposit accounts
- (ommissioner is authorized to in1uire into ban" deposits of:
- a decedent to determine his gross estate
- any taxpayer who has $led an application for compromise of his tax liability by
reason of $nancial incapacity
- taxpayer must execute in writing a waiver of his right under /an" ;ecrecy &aw
and other special laws# such waiver serving as the (ommissioner6s authority
to in1uire into his ban" deposits
- application for tax compromise shall not be considered without this written
waiver
B. 'uthority to accredit and register tax agents
- (ommissioner shall accredit and register individuals and general professional
partnerships and their representatives who prepare and $le tax returns# statements#
reports# protests# and other papers with# or who appear before the /I) for and in
behalf of taxpayers
- (reation of 2ational and )egional 'ccreditation /oards
- Those whose application for accreditation is denied by the (ommissioner of the
2ational or )egional 'ccreditation /oards may appeal to the ;ecretary of >inance
- ;ecretary of >inance to act on appeal within 5F days from receipt of such appeal
- >ailure of ;ec. of >inance to act on appeal deemed approval of the application for
accreditation of the appellant.
C. 'uthority of (ommissioner to prescribe additional procedural or documentary
re1uirements
- (ommissioner may prescribe the manner of compliance with any documentary or
procedural re1uirement in connection with the submission or preparation of $nancial
statements accompanying the tax returns.
;ec. %F+ 2I)(
;ec. %%%.%%+ 2I)(
;ec. %%< 2I)(
)ev. )eg. 1%.<4 9rocedure covering administrative protest on
assessment by the /I) (ommissioner
)ev. )eg. 7.G+ >iling of 1uarterly income tax returns and payment of
1uarterly income tax by individuals receiving self.employed income
;ec. %%% :e= 2I)( re: In1uiry into any return $led in accordance with the
provisions of any tax amnesty law or decree as amended by /9 7FF
)ep. E. I'(# 1G5 ;()' ++4
/onifacio ;y 9o v. (T'# 15- ;()' 4%-
Aeralco v. ;avellano# 117 ;()' <F-
?legado v. (T'# 17+ ;()' %<4
(ommissioner v. Island Barment# 14+ ;()' 554
(ollector v. /enipayo# - ;()' 1<%
(ommissioner v. (onstruction )esources# 1-4 ;()' 571
Aarcos v. ('# B.). 1%F<<F# 4 @une 1GG7
/. 9eriod to assess de$ciency tax
1. prescription: + years 1F years
%. ;uspension of prescriptive period0?xceptions
;ec. %F+ 2I)( of 1GG7
;ecs. %%%.%+ 2I)( of 1GG7
)ead:
)ev. Aemo 3rder %F.GF :- 'pril 1GGF= 9roper execution of the waiver of the
statute of limitations under the 2I)(
)ev. Aemo 3rder -<.GF :%+ 'pril 1GGF= (ounting of the three.year prescriptive
period in issuance of notice of assessment# or warrants of distraint# levy and
garnishment
(ases:
(I) v. (T'# 1G4 ;()' ---
(ommissioner v. Bonzales# 1< ;()' 747
)e: prescriptive period to assess
)epublic v. Herr# 1< ;()' %F
'znar v. (T'# 4< ;()' 41G
3ptional: /asa v. )epublic# 1+< ;()' +-
)epublic v. *ela )ama# id.
II. 9rotesting an assessment0)emedy before payment
'. Cow to protest or dispute an assessment administratively
;ec. %%< 2I)( of 1GG7
1. ?!ect of protest0assessment deemed *I;9IT?*
%. ;uspension of the prescriptive period to collect
+. Two ways of protesting administratively
a. )e1uest for reconsideration
b. )e1uest for reinvestigation
)ev. )eg. 1%.<4 9rocedure covering administrative protest on assessment by /I)
(ommissioner
-. *i!erences and similarities of protest cases under the Tari! and (ustoms
(ode
4. 9ayment under protest not re1uired under the 2I)(
5. 5F.day period to submit relevant documents
/. ?!ect of failure to protest
;ec. %%< 2I)( of 1GG7
Aarcos v. ('# B.). 2o. 1%F<<F# 4 @une 1GG7
Aambulao &umber (o. v. )ep.# 1+% ;()' 1
*ayrit v. (ruz# 154 ;()' 471
)e: ?!ect of abandoning the protest
(om. E. 8yeth ;uaco# %F% ;()' 1%4
(. (ommissioner renders a decision on the disputed assessment
1. )emedy of the taxpayer if protest is denied: 'ppeal to the (T' the $nal
decision of the (I) on the disputed assessment.
%. )emedy of the taxpayer if the (I) fails to act on the protest within 1<F
days from receipt of protest.
+. ?!ect of failure to appeal
-. 8hat is the $nal decision of the (I) on the disputed assessmentJ
)ev. )eg. 1%.<4
;ections - 0 %%< 2I)( of 1GG7
;ection %%< 2I)( of 1GG7
Aambulao &umber v. )epublic# id. 0 civil action to enforce ,udgment
(ommissioner v. island Barment# id.
*ayrit v. (ruz# id.
(ommissioner v. Inion ;hipping# 1<4 ;()' 4-7
(ommissioner v. 'lgue# 14< ;()' G
'dvertising 'sso. E. ('# 1++ ;()' 754
3ptional: ;urigao ?lectric v. (T' 47 ;()' 4%+
>abular v. ('# 11G ;()' +%G
;t. ;tephen ;chool v. (ollector# 1F- 9hil. +1-
III. (laims for refund and credit taxes0)emedy '>T?) payment
'. 8hen0Cow to $le claim0prescriptive period
8ho may $le for refundJ Taxpayer0withholding agent
)efund without claim
9ayment under protest not a re1uirement
;ec. %F- :+= 2I)( as amended by )' <-%-
)e: 1FK and -FK limit re: compromise amount
)e1uisites if beyond the limit 3) the basic tax is greater than 91A
;ec. %%G 2I)( of 1GG7
(I) v. 9hilamlife# B.). 1F4%F<# %G Aay 1GG4
(I) v. To"yo ;hipping# B.). 5<%4%# %4 Aay 1GG4
;an (arlos v. (I)# %%< ;()' 1+4
2ote: ;ection %F- as amended by )' <-%-: ' return $led showing an
overpayment shall be considered as a written claim for credit or refund.
(I) v. (' and (itytrust# %+- ;()' +-<
/. @udicial remedy of the taxpayer
1. 'ppeal to the (ourt of Tax 'ppeals
a. If (I) denies the claim or re1uest +F days from receipt of decision
b. If (I) fails to act on the protest within 1<F days 0 +F days to be
counted from lapse of the 1<F.day period.
%. 'ppeal by $ling a petition for )eview 0 9etition for )efund
a. 8ithin two years from date of payment to initiate ,udicial
proceedings
;ection - 2I)( of 1GG7
;ection %%G 2I)(
b. Aeaning of supervening causes
c. +F.day period to appeal ,urisdictional
d. The %.year period to initiate ,udicial proceedings not ,urisdictional
but a positive re1uirement
e. The two periods :+F days and % years= AI;T concur
(I) v. 9hilamlife# B.). 2o. 1G4%F<# %G Aay 1GG4
(I) v. (' and 'tlas (onsolidated# %+% ;()' +%1
(ollector v. 9rieto# % ;()' 1FF7
(I) v. 9alanca# 1< ;()' -G5
Aaceda v. Aacaraig# %%+ ;()' %17
(ommissioner v. TAL ;ales# %F4 ;()' 1<-
ibbs v. Com.! "# SCRA $"%
ibbs v. Com.! "&' ()il. *$*
8hen Bibbs contributed to the withholding tax system# he did not
really deposit an amount to the (ommissioner of Internal )evenue
but actually performed and extinguished his tax obligation for the
year concerned. Ce paid his tax liabilities for that year. ' taxpayer
whose income is withheld at the source will be considered to have
paid his tax liability when the same falls due at the end of the year.
It is from this date# or when the tax liability falls due# that the two.
year prescriptive period starts to run with respect to payments
e!ected through the withholding tax system.
Com. +. Conce,cion! ** SCRA "&#%
(oncepcion already re1uested for refund of estate and inheritance
taxes at the /I). Cis re1uest denied# he appealed to the (T' but
was dismissed for having been $led beyond the reglementary
period. 'fter paying under protest# he sued again# this time for
recovery. The (ourt said he can6t do this because the remedy of
contesting the validity of an assessment cannot be revived when
there is already a $nal prior ,udgment dismissing the same on the
ground of prescription.
Com. +. (rocter and amble! *&- SCRA .#'
The /I) appealed a (T' decision granting to 9 M B 9hilippines. >or
the $rst time on appeal# however# it raised the issue of 9 M B
9hilippines not being the proper party to claim refund. It said that 9
M B I;' instead should ma"e the claim. The (ourt said /I) should
not be allowed to do this because it had all the opportunity to as"
about 9 M B6s capacity or authorization from its parent company at
the administrative level. It is unfair and too late to as" for it now
especially because this suit was $led ,ust before the expiration of
the two.year prescriptive period.
ACCRA Investment vs. CA
The (ourt elaborates on the :second= Bibbs ruling# saying that
there are two alternative rec"oning dates for a taxpayer whose
income is withheld at source:
:1= the end of the tax year# and
:%= when the tax liability falls due. In this case# since '(()'
Investments only "new its tax liability on 'pril 14# 1G<%#
when it $led its return# this date would be the rec"oning
date for the prescriptive period and not *ecember +1# 1G<1#
when the taxes withheld at source were paid and remitted to
the /I). /efore it $led its return# '(()' was not sure of
whether it made a pro$t or not.
(ebu 9ortland v. (ollector# id.
'guilar v. ('# 1GF ;()' 1GGF
IE. @urisdiction of the (ourt of Tax 'ppeals
)' 11%4 the law creating the (T'
'. 8hy was the (T' createdJ
9hil. )e$ning (o. v. ('# %45 ;()' 551
3ptional: Irsal v. (T'# 1F1 9hil. %FG
/. @urisdiction of the (T'
(. >I2'& decisions of the (ommissioner of Internal )evenue on *I;9IT?*
assessment
*. Aeaning of disputed assessment
?. 8ho may appeal to the (T'J
;ec. 11 )' 11%4
;ec. 7 )' 11%4 as amended by )' +-47
&imitations: 2ew issues cannot be raised for the $rst time on appeal.
8hat are the exceptionsJ
(I) v. 9B.9A(# %F- ;()' +77
;ec. %1< 2I)(
&im v. (T'# 1F4 9hil. G7-
(om. v. Eilla# %% ;()' -
(om. v. @oseph# 4 ;()' <G4
Aeralco ;ecurities v. ;avellano# id.
E. 'ppeal from the (T' to the (ourt of 'ppeals# from the (' to the ;upreme (ourt
9rescriptive period
Aagsaysay &ines v. ('# B.). 2o. 1111<-# 1% 'ugust 1GG5
&iboro v. ('# 17+ ;()' %<4
;upreme (ourt (ircular 1.G1 as amended by
;upreme (ourt )evised 'dministrative (ircular 1.G4
EI. (ollection of Internal )evenue Taxes
'. 9rescriptive period to collect
1. ;ection %F+ + years
%. ;ection %%% 4 years
(om. v. 8yett ;uaco# %F% ;()' 1%4
)ev. )eg. 1%.G+ as amended by )ev. )eg. +.G-
)ev. )eg. 1-.G+ as amended by )ev. )eg. +.G-
)e: Tax payment by chec"s and by ban" debit memo
EII. )emedies 'vailable to the Bovernment
'. 'dministrative remedies0;ummary remedies
;ecs. %F+.%+1 2I)(
(ommissioner v. 8yett ;uaco# %F% ;()' 1%4
1. *istraint of personal property
*e$nition0"ind0procedure
;ecs. %F5.%1% 2I)(
;ecs. %%1.%%% 2I)(
)ev. )eg. +.5G
%. &evy of )eal property
*e$nition0procedure
;ecs. %1+.%1< 2I)(
)ev. )eg. +.5G
Aarcos v. ('# id.
+. >orfeiture
;ec. %15 2I)(
;ecs. %%-.%%5 2I)(
-. Tax lien
;ec. %1G 2I)( of 1GG7
)ev. Aemo (ircular %.G-
)epublic v. ?nri1uez# 155 ;()' 5F<
(ommissioner v. 2&)(# %+< ;()' -%
Cong"ong and ;hanghai /an" v. )a!erty# +G ;()' 1-4
4. 2o in,unction to restrain collection of taxes
;ec. %1< 2I)(
)eview: 2orthern &ines v. (T'# 15+ ;()' %4
?xception: (T' ;ec. 11 )' 11%4
(onditions for the issuance of in,unction
/. @udicial remedies
(ivil0criminal action
)e1uirements in $ling criminal0civil cases
;ecs. %%F.%%1 2I)(
Ingab v. (usi# G7 ;()' <77
(om. v. ('# %47 ;()' %FF :&ucio Tan0>ortune Tobacco (ase=
)esolution on the Aotion for )econsideration# 7 >ebruary 1GG7
EIII. ;tatutory 3!enses and 9enalties
'. (ivil 9enalties0;urcharges0Interest
;ec. %-<.%41 2I)( of 1GG7
1. 'pplicable interest rate %F K 0 Aanila )eference )ate : 8hichever is higher
%. (omputation of interest0basis
)ev. )eg. +.G1 :1.%-.G1= Implementing ;ec. %G- of the 2I)(09rescribing a
de$ciency rate of interest higher than %FK per annum
+. ;urcharge %4K 4FK
a. >alse return v. fraudulent return
b. >raud assessment
c. Aandatory imposition of penalties
(ases:
@avier v. (om.# 1GG ;()' <%-
'znar v. (ollector# 4< ;()' 41G
(astro v. (ollector# 5 ;()' <<5
/. Issuance0printing of receipts# registration of name0violations0penalties
;ecs. %+5.%-+ 2I)(
;ec. %5+ 2I)(
(. (ompliance re1uirements
1. Heeping of boo"s of accounts
%. ;ecuring tax identi$cation number :TI2=
+. 'ttachments to tax returns: (erti$cate of tax compliance
)ev. )eg. +.GF
;ecs. %+%.%+5 2I)(
)ev. )eg. 11.<G )egistration of boo"s of accounts
)ev. Aemo (ircular 1+.<% 9rocedures in the issuance of permits to use loose
leaf boo"s of accounts# records# invoices and receipts
)ev. )eg. 1+.G+ )e: Issuance and use of TI2
)ev. Aemo (ircular 2o. 5+.G1 Issuance of the 2ew TI2 :Tax Identi$cation
2umber= to taxpayers and its use on documents and receipts
*. (rimes0o!enses0penalties0forfeitures
1. )evised penalties
;ecs. %%-.%%< 2I)( as amended by )' 75-%
)ev. )eg. -.G-
;ec. %44 as amended by )' 7-G7
;ecs. %4+.%<1 2I)(
a. ?lements of tax evasion
b. 9ersons liable in case taxpayer is a ,uridical entity
c. 9ayment of tax 23T a valid defense
%. 9rescription of violations of the 2I)(
)ev. Aemo (ircular 1F1.GF dated %5 2ov. 1GGF *etermination of when
cause of action for wilfull failure to pay de$ciency tax accrue and
prescription under ;ec. %<1 2I)(
&im v. (' 1GF ;()' 515
Ingab v. (usi# G7 ;()' <77
9eople v. Tierra# 1% ;()' 555
'znar v. (T'# 4< ;()' 41G
(om. v. @'&# %F% ;()' -4F
IL. 'batement of tax 0 Tax (ompromise
;ection %F- 2I)( of 1GG7
'. 'uthority of the (ommissioner to abate taxes
1. Brounds for abating taxes and penalties
%. (onditions
)ead: )A3 -4.G+ as amended by )A3 4-.G+
/. 9ower to compromise 0 discretionary power
1. Brounds0reasons for a compromise agreement
%. (ases that cannot be compromise
+. ;ub,ect to limitations
a. If reason is $nancial incapacity 23T less than 1FK of basic tax
b. 3ther cases not less than -FK of basic tax
c. 8ould re1uire approval of the /oard:
i. /asic tax assessment 91A
ii. 3r below the prescribed limits
-. Bovernment6s remedy if taxpayer fails to comply with the agreement
;ec. %F- 2I)( of 1GG7
)ev. )eg. 1%.G+ Implementing Buideline for )' 75-5
)ev. Aemo 3rder -4.G+ as amended by )A3 4-.G+ ?xample: abatement of
penalties
)ev. Aemo 3rder +%.G% as amended by )A3 %%.G-
)ev. Aemo 3rder 1.GF as amended by )A( 17.GF
?xample schedule of compromise penalties
L. Informer6s )eward
;ec. %<% 2I)( of 1GG7
)ev. Aemo 3rder 2o. 1%.G+ dated 1 >ebruary 1GG+
Buidelines in the $ling of con$dential information for violation of the 2I)( and
investigation by authorized revenue ofcer.
Aeralco ;ecurities v. ;avellano# 117 ;()' 7F-
9enid v. Eirata# 1%1 ;()' 155
(om. of Internal )evenue v. (om. on 'udit# %1< ;()' %F+