Beruflich Dokumente
Kultur Dokumente
1
1.
Examine
any
book,
paper,
record
2.
TPI
3.
Subpoena
duces
tecum
4.
Supoena
testificandum
5.
Tax
mapping
2
1.
Examination
of
Returns
and
Determination
of
tax
due
2.
Best
evidence
obtainable
3.
Conduct
Inventory-Taking,
surveillance
and
to
prescribe
presumptive
gross
sales
and
receipts
4.
Authority
to
terminate
tax
period
5.
Prescribe
real
property
values
6.
Inquire
into
bank
deposits
7.
Accredit
and
register
tax
agents
8.
Prescribe
additional
procedural
and
document
requirements
Bianca
Mendoza/ALS
3B
2016/Tax
II-Atty.
Bello
1
1. After
a
return
has
been
duly
filed
-
CIR
or
his
duly
authorized
representative
may
authorize
the
examination
of
any
taxpayer
and
the
assessment
2. Even
if
TP
failed
to
file
a
return
CIR
may
examine
the
TP
(B)
Best
evidence
obtainable
-
When
a
report
required
by
law
as
a
basis
for
the
assessment
of
any
national
internal
revenue
tax
shall
not
be
forthcoming
within
the
time
fixed
by
laws
or
rules
and
regulations
or
when
there
is
reason
to
believe
that
any
such
report
is
false,
incomplete
or
erroneous.
If
delayed,
or
wilfully
or
otherwise
files
a
false
or
fraudulent
return
or
other
document,
the
Commissioner
shall
make
or
amend
the
return
from
his
own
knowledge
and
from
such
information
as
he
can
obtain
through
testimony
or
otherwise,
which
shall
be
prima
facie
correct
and
sufficient
for
all
legal
purposes.
(C)
Authority
to
Conduct
Inventory-taking,
surveillance
and
to
Prescribe
Presumptive
Gross
Sales
and
Receipts.
-
if
there
is
reason
to
believe
that
such
person
is
not
declaring
his
correct
income,
sales
or
receipts
for
internal
revenue
tax
purposes.
The
findings
may
be
used
as
the
basis
for
assessing
the
taxes
for
the
other
months
or
quarters
of
the
same
or
different
taxable
years
and
such
assessment
shall
be
deemed
prima
facie
correct.
When
TP
failed
to
issue
receipts
and
invoices,
or
when
there
is
reason
to
believe
that
the
books
of
accounts
or
other
records
do
not
correctly
reflect
the
declarations
made
or
to
be
-
CIR
after
taking
into
account
the
sales,
receipts,
income
or
other
taxable
base
of
other
persons
engaged
in
similar
businesses
under
similar
situations
or
circumstances
or
after
considering
other
relevant
information
may
prescribe
a
minimum
amount
of
such
gross
receipts,
sales
and
taxable
base,
and
such
amount
so
prescribed
shall
be
prima
facie
correct
for
purposes
of
determining
the
internal
revenue
tax
liabilities
of
such
person.
(D) Authority
to
Terminate
Taxable
Period.
a. TP
is
retiring
from
business
subject
to
tax,
b. TP
is
intending
to
leave
the
Philippines
c. TP
intending
to
remove
his
property
therefrom
or
to
hide
or
conceal
his
property,
d. TP
is
performing
any
act
tending
to
obstruct
the
proceedings
for
the
collection
of
the
tax
for
the
past
or
current
quarter
or
year
or
to
render
the
same
totally
or
partly
ineffective
unless
such
proceedings
are
begun
immediately,
CIR
shall
terminated
the
period
and
send
TP
a
notice
of
such
decision
with
request
for
immediate
payment
of
the
tax
for
the
period
so
declared
terminated
and
the
tax
for
the
preceding
year
or
quarter,
or
such
portion
thereof
as
may
be
unpaid,
and
said
taxes
shall
be
due
and
payable
immediately
and
shall
be
subject
to
all
the
penalties
hereafter
prescribed,
unless
paid
within
the
time
fixed
in
the
demand
made
by
the
Commissioner.
(E) Authority
of
the
Commissioner
to
Prescribe
Real
Property
Values.
1. CIR
is
authorized
to
divide
into
different
zones
or
area
2. Upon
consultation
with
competent
appraisers
both
from
the
private
and
public
sectors,
determine
the
fair
market
value
of
real
properties
located
in
each
zone
or
area.
3. For
purposes
of
computing
any
internal
revenue
tax,
the
value
of
the
property
shall
be,
whichever
is
the
HIGHER
of;
(1)
the
FMV
as
determined
by
the
Commissioner,
[ZONAL]
8
Here
there
were
two
other
notices
both
of
which
were
not
considered
notice,
first,
it
was
not
yet
final
because
it
was
still
waiting
for
the
resolution
of
another
case
with
the
same
facts
and
circumstance
and
second,
it
was
not
shown
it
was
ever
served
to
the
TP.
Bianca
Mendoza/ALS
3B
2016/Tax
II-Atty.
Bello
18
SEC.
255.
Failure
to
File
Return,
Supply
Correct
and
Accurate
Information,
Pay
Tax
Withhold
and
Remit
Tax
and
Refund
Excess
Taxes
Withheld
on
Compensation.
-
Any
person
required
under
this
Code
or
by
rules
and
regulations
promulgated
thereunder
to
pay
any
tax
1.)
make
a
return
2.)
keep
any
record
or
3.)
supply
correct
the
accurate
information,
who
wilfully
fails:
1. To
pay
such
tax,
2. Make
such
return
3. Keep
such
record,
4. Supply
correct
and
accurate
information,
5. Withhold
or
remit
taxes
withheld,
6. Refund
excess
taxes
withheld
on
compensation
at
the
time
or
times
required
by
law
or
rules
and
regulations
shall,
in
addition
to
other
penalties
provided
by
law,
upon
conviction
thereof,
be
punished
by
a
fine
of
not
less
than
Ten
thousand
pesos
(P10,000)
and
suffer
imprisonment
of
not
less
than
one
(1)
year
but
not
more
than
ten
(10)
years.
Any
person
who
1.)
attempts
to
make
it
appear
for
any
reason
that
he
or
another
has
in
fact
filed
a
return
or
statement,
or
2.)
actually
files
a
return
or
statement
and
subsequently
withdraws
the
same
return
or
statement
after
securing
the
official
receiving
seal
or
stamp
of
receipt
of
internal
revenue
office
wherein
the
same
was
actually
filed
shall,
upon
conviction
therefor,
be
punished
by
a
fine
of
not
less
than
Ten
thousand
pesos
(P10,000)
but
not
more
than
Twenty
thousand
pesos
(P20,000)
and
suffer
imprisonment
of
not
less
than
one
(1)
year
but
not
more
than
three
(3)
years.
Rev.
Mem.
Order
No.
27-2010
RATE
program
CIR
v.
Pascor
Realty
and
Dev.
Corp.,
supra
WON
assessment
is
a
condition
precedent
to
the
filing
of
criminal
complaint?
NO.
Assessment
is
not
necessary
to
precede
the
filing
of
a
criminal
complaint.
The
NIRC
specifically
states
that
in
cases
where
a
false
or
fraudulent
return
is
submitted
or
in
cases
of
failure
to
file
a
return
such
as
this
case,
proceedings
in
court
may
be
commenced
without
an
assessment.
Furthermore
the
same
Code
clearly
mandates
that
the
civil
and
criminal
aspects
of
the
case
may
be
pursued
simultaneously.
Republic
v.
Patanao,
20
SCRA
712
(1967)
WON
the
action
to
collect
the
tax
due
is
barred
by
prior
judgment
in
the
criminal
cases?
NO.
The
acquittal
in
the
said
criminal
cases
cannot
operate
to
discharge
defendant
appellee
from
the
duty
of
paying
the
taxes
that
the
law
requires
to
be
paid,
since
that
duty
is
imposed
by
statute
prior
to
and
independently
of
any
attempts
by
the
taxpayer
to
evade
payment.
Said
obligation
is
not
a
consequence
of
the
felonious
acts
charged
in
the
criminal
proceeding,
nor
is
it
a
mere
civil
liability
arising
from
crime
that
could
be
wiped
out
by
the
judicial
declaration
of
non-existence
of
the
criminal
acts
charged.
Ungab
v.
Cusi,
G.R.
No.
L-41919-24,
May
30,
1980
WON
assessment
shall
first
be
issued
before
a
criminal
complaint
may
be
filed?
NO.
What
is
involved
here
is
not
the
collection
of
taxes
where
the
assessment
of
the
Commissioner
of
Internal
Revenue
may
be
reviewed
by
the
Court
of
Tax
Appeals,
but
a
criminal
prosecution
for
violations
of
the
National
Internal
Revenue
Code
which
is
within
the
cognizance
of
courts
of
first
instance.
While
there
can
be
no
civil
action
to
enforce
collection
before
the
assessment
procedures
provided
in
the
Code
have
been
followed,
there
is
no
requirement
for
the
precise
computation
and
assessment
of
the
tax
before
there
can
be
a
criminal
prosecution
under
the
Code.
An
assessment
of
a
deficiency
is
not
necessary
to
a
criminal
prosecution
for
wilful
attempt
to
defeat
and
evade
the
income
tax.
A
crime
is
complete
when
the
violator
has
Bianca
Mendoza/ALS
3B
2016/Tax
II-Atty.
Bello
19
knowingly
and
wilfully
filed
a
fraudulent
return
with
intent
to
evade
and
defeat
the
tax.
The
perpetration
of
the
crime
is
grounded
upon
knowledge
on
the
part
of
the
taxpayer
that
he
has
made
an
inaccurate
return,
and
the
government's
failure
to
discover
the
error
and
promptly
to
assess
has
no
connections
with
the
commission
of
the
crime.
People
v.
Kintanar,
CTA
EB
Crim
No.
006,
Dec.
3,
2010,
aff.
in
G.R.
No.196340,
Feb.
__,
2012
WON
TP
is
liable
for
the
50%
surcharge?
YES.
Doctrine
of
wilful
blindness
People
v.
Judy
Anne
Santos,
CTA
Crim
Case
No.
O-012,
Jan.
16,
2013
WON
TP
is
liable
for
the
50%
surcharge?
NO.
She
participated
in
the
proceedings
and
cooperated
(no
element
of
wilfulness
as
she
provided
all
documents
required
of
her.)9
Atty
Bello
on
P
v
Kintanar
and
P
v
Santos:
CPA,
principle
of
agency
D.
Anti-Injunction
Rule
1.
General
Rule
SEC.
218.
Injunction
not
Available
to
Restrain
Collection
of
Tax.
-
No
court
shall
have
the
authority
to
grant
an
injunction
to
restrain
the
collection
of
any
national
internal
revenue
tax,
fee
or
charge
imposed
by
this
Code
Churchill
v.
Rafferty,
32
Phil.
580
(1915)
WON
injunction
lies
to
stop
the
collection
of
taxes?
NO.
The
mere
fact
that
a
tax
is
illegal,
or
that
the
law,
by
virtue
of
which
it
is
imposed,
is
unconstitutional,
does
not
authorize
a
court
of
equity
to
restrain
its
collection
by
injunction
CIR
v.
Cebu
Portland
Cement
Co.,
156
SCRA
535,
541
(1987)
WON
the
assessment
can
be
enforced
while
it
is
contested?
YES.
The
argument
that
the
assessment
cannot
as
yet
be
enforced
because
it
is
still
being
contested
loses
sight
of
the
urgency
of
the
need
to
collect
taxes
as
"the
lifeblood
of
the
government."
If
the
payment
of
taxes
could
be
postponed
by
simply
questioning
their
validity,
the
machinery
of
the
state
would
grind
to
a
halt
and
all
government
functions
would
be
paralyzed.
That
is
the
reason
why,
save
for
the
exception
already
noted,
the
Tax
Code
provides:
Sec.
291.
Injunction
not
available
to
restrain
collection
of
tax.
No
court
shall
have
authority
to
grant
an
injunction
to
restrain
the
collection
of
any
national
internal
revenue
tax,
fee
or
charge
imposed
by
this
Code.
It
goes
without
saying
that
this
injunction
is
available
not
only
when
the
assessment
is
already
being
questioned
in
a
court
of
justice
but
more
so
if,
as
in
the
instant
case,
the
challenge
to
the
assessment
is
still-and
only-on
the
administrative
level.
There
is
all
the
more
reason
to
apply
the
rule
here
because
it
appears
that
even
after
crediting
of
the
refund
against
the
tax
deficiency,
a
balance
of
more
than
P
4
million
is
still
due
from
the
private
respondent.
2.
Exception
a.
Sec.
11,
Rep.
Act.
No.
1125,
as
amended
by
Rep.
Act.
No.
9282
SEC.
11.
Who
May
Appeal;
Mode
of
Appeal;
Effect
of
Appeal.
-
Any
party
adversely
affected
by
a
decision,
ruling
or
inaction
of
the
Commissioner
of
Internal
Revenue,
the
Commissioner
of
Customs,
the
Secretary
of
Finance,
the
Secretary
of
Trade
and
Industry
or
the
Secretary
of
Agriculture
or
the
Central
Board
of
Assessment
Appeals
or
the
Regional
Trial
Courts
may
file
an
appeal
with
the
CTA
within
thirty
(30)
days
after
the
receipt
of
such
decision
or
ruling
or
after
the
expiration
of
the
period
fixed
by
law
for
action
as
referred
to
in
Section
7(a)(2)
herein.
9
Atty.
Bello:
Who
is
Judays
manager?
Bianca
Mendoza/ALS
3B
2016/Tax
II-Atty.
Bello
20
Appeal
shall
be
made
by
filing
a
petition
for
review
under
a
procedure
analogous
to
that
provided
for
under
Rule
42
of
the
1997
Rules
of
Civil
Procedure
with
the
CTA
within
thirty
(30)
days
from
the
receipt
of
the
decision
or
ruling
or
in
the
case
of
inaction
as
herein
provided,
from
the
expiration
of
the
period
fixed
by
law
to
act
thereon.
A
Division
of
the
CTA
shall
hear
the
appeal:
Provided,
however,
That
with
respect
to
decisions
or
rulings
of
the
Central
Board
of
Assessment
Appeals
and
the
Regional
Trial
Court
in
the
exercise
of
its
appellate
jurisdiction
appeal
shall
be
made
by
filing
a
petition
for
review
under
a
procedure
analogous
to
that
provided
for
under
rule
43
of
the
1997
Rules
of
Civil
Procedure
with
the
CTA,
which
shall
hear
the
case
en
banc.
All
other
cases
involving
rulings,
orders
or
decisions
filed
with
the
CTA
as
provided
for
in
Section
7
shall
be
raffled
to
its
Divisions.
A
party
adversely
affected
by
a
ruling,
order
or
decision
of
a
Division
of
the
CTA
may
file
a
motion
for
reconsideration
of
new
trial
before
the
same
Division
of
the
CTA
within
fifteens
(15)
days
from
notice
thereof:
Provide,
however,
That
in
criminal
cases,
the
general
rule
applicable
in
regular
Courts
on
matters
of
prosecution
and
appeal
shall
likewise
apply.
No
appeal
taken
to
the
CTA
from
the
decision
of
the
Commissioner
of
Internal
Revenue
or
the
Commissioner
of
Customs
or
the
Regional
Trial
Court,
provincial,
city
or
municipal
treasurer
or
the
Secretary
of
Finance,
the
Secretary
of
Trade
and
Industry
and
Secretary
of
Agriculture,
as
the
case
may
be
shall
suspend
the
payment,
levy,
distraint,
and/or
sale
of
any
property
of
the
taxpayer
for
the
satisfaction
of
his
tax
liability
as
provided
by
existing
law:
Provided,
however,
That
when
in
the
opinion
of
the
Court
the
collection
by
the
aforementioned
government
agencies
may
jeopardize
the
interest
of
the
Government
and/or
the
taxpayer
the
Court
any
stage
of
the
proceeding
may
suspend
the
said
collection
and
require
the
taxpayer
either
to
deposit
the
amount
claimed
or
to
file
a
surety
bond
for
not
more
than
double
the
amount
with
the
Court.
In
criminal
and
collection
cases
covered
respectively
by
Section
7(b)
and
(c)
of
this
Act,
the
Government
may
directly
file
the
said
cases
with
the
CTA
covering
amounts
within
its
exclusive
and
original
jurisdiction.
b. Rule
10,
Revised
Rules
of
the
CTA
(SC
AM
no.
05-11-07-CTA,
Nov.
22,
2005)
RULE
10
SUSPENSION
OF
COLLECTION
OF
TAX
SECTION
1.
No
suspension
of
collection
of
tax,
except
as
herein
prescribed.
No
appeal
taken
to
the
Court
shall
suspend
the
payment,
levy,
distraint,
or
sale
of
any
property
of
the
taxpayer
for
the
satisfaction
of
his
tax
liability
as
provided
under
existing
laws,
except
as
hereinafter
prescribed.
(n)
SEC.
2.
Who
may
file.
Where
the
collection
of
the
amount
of
the
taxpayers
liability,
sought
by
means
of
a
demand
for
payment,
by
levy,
distraint
or
sale
of
any
property
of
the
taxpayer,
or
by
whatever
means,
as
provided
under
existing
laws,
may
jeopardized
the
interest
of
the
Government
or
the
taxpayer,
an
interested
party
may
file
a
motion
for
the
suspension
of
the
collection
of
the
tax
liability.
(RCTA,
Rule
12,
sec.
1a)
SEC.
3.
When
to
file.
The
motion
for
the
suspension
of
the
collection
of
the
tax
may
be
filed
together
with
the
petition
for
review
or
with
the
answer,
or
in
a
separate
motion
filed
by
the
interested
party
at
any
stage
of
the
proceedings.
(RCTA,
Rule
12,
sec.
2)
SEC.
4.
Contents
and
attachments
of
the
motion.
The
motion
for
the
suspension
of
the
collection
of
the
tax
shall
be
verified
and
shall
state
clearly
and
distinctly
the
facts
and
the
grounds
relied
upon
in
support
of
the
motion.
Affidavits
and
other
documentary
evidence
in
support
thereof
shall
be
attached
thereto,
which,
if
uncontroverted,
would
be
admissible
in
evidence
as
proof
of
the
facts
Bianca
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3B
2016/Tax
II-Atty.
Bello
21
alleged
in
the
motion.
(RCTA,
Rule
12,
sec.
3a)
SEC.
5.
Opposition.
Unless
a
shorter
period
is
fixed
by
the
Court
because
of
the
urgency
of
the
motion,
the
adverse
party
shall,
within
five
days
after
receipt
of
a
copy
of
the
motion,
file
an
opposition
thereto,
if
any,
which
shall
state
clearly
and
distinctly
the
facts
and
the
grounds
relied
upon
in
support
of
the
opposition.
(RCTA,
Rule
12,
sec.
4)
SEC.
6.
Hearing
of
the
motion.
The
movant
shall,
upon
receipt
of
the
opposition,
set
the
motion
for
hearing
at
the
next
available
motion
day,
and
the
Court
shall
give
preference
to
the
motion
over
all
other
cases,
except
criminal
cases.
At
the
hearing,
both
parties
shall
submit
their
respective
evidence.
If
warranted,
the
Court
may
grant
the
motion
if
the
movant
shall
deposit
with
the
Court
an
amount
in
cash
equal
to
the
value
of
the
property
or
goods
under
dispute
or
filing
with
the
Court
of
an
acceptable
surety
bond
in
an
amount
not
more
than
double
the
disputed
amount
or
value.
However,
for
the
sake
of
expediency,
the
Court,
motu
proprio
or
upon
motion
of
the
parties,
may
consolidate
the
hearing
of
the
motion
for
the
suspension
of
the
collection
of
the
tax
with
the
hearing
on
the
merits
of
the
case.
(RCTA,
Rule
12,
sec.
5a)
SEC.
7.
Corporate
surety
bonds.
In
the
selection
and
qualification
of
surety
companies,
the
parties
and
the
Court
shall
be
guided
by
Supreme
Court
Circular
A.M.
No.
04-7-02-SC,
dated
July
20,
2004.
E.
Nature
and
Extent
of
Tax
Lien
SEC.
219.
Nature
and
Extent
of
Tax
Lien.
-
If
any
person,
corporation,
partnership,
joint-account
(cuentas
en
participacion),
association
or
insurance
company
liable
to
pay
an
internal
revenue
tax,
neglects
or
refuses
to
pay
the
same
after
demand,
the
amount
shall
be
a
lien
in
favor
of
the
Government
of
the
Philippines
from
the
time
when
the
assessment
was
made
by
the
Commissioner
until
paid,
with
interests,
penalties,
and
costs
that
may
accrue
in
addition
thereto
upon
all
property
and
rights
to
property
belonging
to
the
taxpayer:
Provided,
That
this
lien
shall
not
be
valid
against
any
mortgagee
purchaser
or
judgment
creditor
until
notice
of
such
lien
shall
be
filed
by
the
Commissioner
in
the
office
of
the
Register
of
Deeds
of
the
province
or
city
where
the
property
of
the
taxpayer
is
situated
or
located.
F.
Compromise
and
Abatement
SEC.
204.
Authority
of
the
Commissioner
to
Compromise,
Abate
and
Refund
or
Credit
Taxes.
-
The
Commissioner
may
-
(A)
Compromise
the
payment
of
any
internal
revenue
tax,
when:
(1)
A
reasonable
doubt
as
to
the
validity
of
the
claim
against
the
taxpayer
exists10;
or
(2)
The
financial
position
of
the
taxpayer
demonstrates
a
clear
inability
to
pay
the
assessed
tax11.
The
compromise
settlement
of
any
tax
liability
shall
be
subject
to
the
following
minimum
compromise
rates
1. Financial
incapacity,
equivalent
to
ten
percent
(10%)
of
the
basic
assessed
tax;
2. Other
cases,
equivalent
to
forty
percent
(40%)
of
the
basic
assessed
tax.
Provided
that:
Where
the
basic
tax
involved:
10
What
if
assessment
is
already
final?
Compromise
is
no
longer
allowed
because
all
doubt
is
removed
from
the
assessment.
What
if
on
the
ground
of
inability
to
pay?
Still
allowed
because
poverty
is
forever!
Or
until
the
TP
is
still
not
able
to
pay.
11
Waiver
of
right
required
before
you
can
avail
of
this
CIR
can
look
into
your
bank
deposit.
Bianca
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3B
2016/Tax
II-Atty.
Bello
22
1. Exceeds
One
million
pesos
(P1,000.000)
or
2. Where
the
settlement
offered
is
less
than
the
prescribed
minimum
rates,
the
compromise
shall
be
subject
to
the
approval
of
the
Evaluation
Board
which
shall
be
composed
of
the
Commissioner
and
the
four
(4)
Deputy
Commissioners.
(B)
Abate
or
cancel
a
tax
liability,
when:
(1)
The
tax
or
any
portion
thereof
appears
to
be
unjustly
or
excessively
assessed;
or
(2)
The
administration
and
collection
costs
involved
do
not
justify
the
collection
of
the
amount
due.
All
criminal
violations
may
be
compromised
EXCEPT:
(a)
those
already
filed
in
court,
or
(b)
those
involving
fraud.
BIR
Rul.
No.
111-99,
July
22,
1999
WON
the
BIR
has
the
power
to
grant
amnesty
prayed
for
by
the
baranggays?
NO.
This
is
a
case
to
case
basis
if
it
qualifies
under
Sec
204;
otherwise,
it
is
only
the
Congress
which
has
such
plenary
power.
Court
said
that
since
the
records
are
already
taken
judicial
cognizance
of,
the
baranggays
should
just
file
separately.
BIR
Rul.
No.
059-01,
Dec.
20,
2001
WON
the
assignment
of
subscription
is
assignment
of
shares,
therefore
subject
to
DST?
YES.
But
because
the
TP
relied
on
a
Revenue
Regulation
which
says
otherwise,
the
increments
to
the
DST
to
be
paid
is
abated
pursuant
to
Sec
204
B.
V.
IMPOSITION
OF
SURCHARGE,
INTEREST,
AND
COMPROMISE
PENALTY
A.
Civil
Penalties
SEC.
248.
-
Civil
Penalties.
-
(A)
There
shall
be
imposed,
in
addition
to
the
tax
required
to
be
paid,
a
penalty
equivalent
to
twenty-five
percent
(25%)
of
the
amount
due,
in
the
following
cases:
(1)
Failure
to
file
any
return
and
pay
the
tax
due
thereon
as
required
under
the
provisions
of
this
Code
or
rules
and
regulations
on
the
date
prescribed;
or
(2)
Unless
otherwise
authorized
by
the
Commissioner,
filing
a
return
with
an
internal
revenue
officer
other
than
those
with
whom
the
return
is
required
to
be
filed;
or
(3)
Failure
to
pay
the
deficiency
tax
within
the
time
prescribed
for
its
payment
in
the
notice
of
assessment;
or
(4)
Failure
to
pay
the
full
or
part
of
the
amount
of
tax
shown
on
any
return
required
to
be
filed
under
the
provisions
of
this
Code
or
rules
and
regulations,
or
the
full
amount
of
tax
due
for
which
no
return
is
required
to
be
filed,
on
or
before
the
date
prescribed
for
its
payment.
(B)
In
case
of
1.)
willful
neglect
to
file
the
return
within
the
period
prescribed
by
this
Code
or
by
rules
and
regulations,
2.)
or
in
case
a
false
or
fraudulent
return
is
willfully
made,
the
penalty
to
be
imposed
shall
be
fifty
percent
(50%)
of
the
tax
or
of
the
deficiency
tax,
in
case,
any
payment
has
been
made
on
the
basis
of
such
return
before
the
discovery
of
the
falsity
or
fraud
Prima
facie
evidence
of
false
or
fraudulent
return:
A
substantial
underdeclaration
(exceeding
30%)
of
taxable
sales,
receipts
or
income,
or
a
substantial
overstatement
(exceeding
30%)
of
deductions
declared
per
return,
as
determined
by
the
Commissioner
pursuant
to
the
rules
and
regulations
to
be
promulgated
by
the
Secretary
of
Finance.
17
Notes
from
class:
deficiency
tax
+
interest
(counted
from
the
date
prescribed
by
law)
delinquency
tax
+
surcharge
+
interest
(counted
from
time
prescribed
by
notice
until
paid)
BIR
does
not
waive
interest
because
it
is
mandatory
unlike
surcharge
which
may
be
waived
depending
on
the
circumstance
of
the
case.
Compromise
penalty
CIR
and
TP
enter
into
an
agreement
in
lieu
of
criminal
prosecution
of
NIRC
violation.
This
is
different
from
compromise
in
Sec
204
A.
Only
the
criminal
aspect
is
waived
but
the
TP
at
the
end
of
the
day
is
still
liable
for
taxes.
Bianca
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3B
2016/Tax
II-Atty.
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26
SECTION
6.
Suggested
Compromise
Penalty
in
Extra-judicial
Settlement
of
a
Taxpayer's
Criminal
Violation.
-
Section
204
of
the
Tax
Code
of
1997
provides
that
"All
criminal
violations
may
be
compromised
except:
(a)
those
already
filed
in
court,
or
(b)
those
involving
fraud."
This
means
that,
in
general,
the
taxpayer's
criminal
liability
arising
from
his
violation
of
the
pertinent
provision
of
the
Code
may
be
settled
extra-judicially
instead
of
the
BIR
instituting
against
the
taxpayer
a
criminal
action
in
Court.
A
compromise
in
extra-judicial
settlement
of
the
taxpayer's
criminal
liability
for
his
violation
is
consensual
in
character,
hence,
may
not
be
imposed
on
the
taxpayer
without
his
consent.
Hence,
the
BIR
may
only
suggest
settlement
of
the
taxpayer's
liability
through
a
compromise.
The
extra-judicial
settlement
of
the
taxpayer's
criminal
liability
and
the
amount
of
the
suggested
compromise
penalty
shall
conform
with
the
schedule
of
compromise
penalties
provided
under
Revenue
Memorandum
Order
No.
1-90
or
as
hereafter
revised.
CIR
v.
Lianga
Bay
Logging
Co.,
Inc.,
193
SCRA
86,
92-93
(1991)
The
CIR
required
payment
of
P300
as
compromise
if
Lianga
wished
"to
settle
extrajudicially
the
violation"
in
question.
Lianga
asked
the
Commissioner
to
reconsider
his
assessment
and
demand.
When
the
Commissioner
refused
to
change
his
stand,
Lianga
appealed
to
the
CTA.
WON
compromise
penalty
is
valid?
NO.
There
is
no
basis
therefor,
and,
as
the
CTA
finally
declares,
"the
imposition
of
the
same
without
the
conformity
of
the
taxpayer
is
illegal
and
unauthorized.
Atlas
Consolidated
Mining
&
Dev.
Corp.
v.
CIR,
CTA
Case
No.
5671,
Aug
29,
2002
WON
compromise
penalty
is
valid?
NO.
However,
we
cannot
sustain
the
said
compromise
penalties.
The
penalties
provided
by
law
shall
only
be
imposed
upon
conviction.
Moreover,
as
facts
would
demonstrate,
TP
did
voluntarily
entered
into
a
compromise
and
such
penalties
being
an
imposition
based
upon
mutual
agreement
or
consent
by
TP,
cannot
be
compulsorily
imposed
to
those
who
do
not
agree
to
its
imposition.
RIGHTS
AND
REMEDIES
OF
THE
TAXPAYER
UNDER
THE
NATIONAL
INTERNAL
REVEUE
CODE
I.
AMEND
TAX
RETURN
Sec.
6(A),
NIRC,
last
paragraph
Any
return,
statement
of
declaration
filed
in
any
office
authorized
to
receive
the
same
shall
not
be
withdrawn:
the
same
may
be
modified,
changed,
or
amended:
1. Provided,
That
within
three
(3)
years
from
the
date
of
such
filing
,
2. Provided,
further,
That
no
notice
for
audit
or
investigation
of
such
return,
statement
or
declaration
has
in
the
meantime
been
actually
served
upon
the
taxpayer.
Rev.
Mem.
Cir.
No.
40-2003,
July
3,
2003
LN
being
served
by
the
Bureau
upon
taxpayers
who
were
found
to
have
under-declared
their
sales
or
purchases
through
the
Third
Party
Information
Program
can
be
considered
a
notice
of
audit
or
investigation
which
would
in
effect
disqualify
the
taxpayers
concerned
from
amending
any
return
which
is
the
subject
of
such
audit
or
investigation.
Rohm
Apollo
Semiconductor
Phil.
v.
CIR,
CTA
E.B.
No.
59
Although
TP
is
allowed
to
amend
its
returns,
the
amendment
so
allowed
does
not
extend
as
to
give
support
to
TPs
allegation
in
its
pleadings
that
are
contradictory
to
the
existing
evidence
on
record.
II.
PROTEST
ASSESSMENT
A.
Procedure
Bianca
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3B
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II-Atty.
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27
Rev.
Regs.
No.
12-85,
Nov.
27,
1985
Sec.
3,
Rev.
Regs.
No.
12-99,
Sept.
6,
1999
SECTION
318.
Due
Process
Requirement
in
the
Issuance
of
a
Deficiency
Tax
Assessment.
SECTION
3.
Due
Process
Requirement
in
the
Issuance
of
a
Deficiency
Tax
Assessment.
3.1
Mode
of
procedure
in
the
issuance
of
a
deficiency
tax
assessment:
3.1.1
Preliminary
Assessment
Notice
(PAN).
If
after
review
and
evaluation
by
the
Commissioner
or
his
duly
authorized
representative,
as
the
case
may
be,
it
is
determined
that
there
exists
sufficient
basis
to
assess
the
taxpayer
for
any
deficiency
tax
or
taxes,
the
said
Office
shall
issue
to
the
taxpayer
a
Preliminary
Assessment
Notice
(PAN)
for
the
proposed
assessment.
It
shall
show
in
detail
the
facts
and
the
law,
rules
and
regulations,
or
jurisprudence
on
which
the
proposed
assessment
is
based.
1.
If
the
taxpayer
fails
to
respond
within
fifteen
(15)
days
from
date
of
receipt
of
the
PAN,
he
shall
be
considered
in
default,
in
which
case,
a
Formal
Letter
of
Demand
and
Final
Assessment
Notice
(FLD/FAN)
shall
be
issued
calling
for
payment
of
the
taxpayer's
deficiency
tax
liability,
inclusive
of
the
applicable
penalties.
2.
If
the
taxpayer,
within
fifteen
(15)
days
from
date
of
receipt
of
the
PAN,
responds
that
he/it
disagrees
with
the
findings
of
deficiency
tax
or
taxes,
an
FLD/FAN
shall
be
issued
within
fifteen
(15)
days
from
filing/submission
of
the
taxpayers
response,
calling
for
payment
of
the
taxpayer's
deficiency
tax
liability,
inclusive
of
the
applicable
penalties.
***So
in
both
cases,
FAN/FLD
shall
issue
3.1.2
Exceptions
to
Prior
Notice
of
the
Assessment.
Pursuant
to
Section
228
of
the
Tax
Code,
as
amended,
a
PAN
shall
not
be
required
in
any
of
the
following
cases:
(i)
When
the
finding
for
any
deficiency
tax
is
the
result
of
mathematical
error
in
the
computation
of
the
tax
appearing
on
the
face
of
the
tax
return
filed
by
the
taxpayer;
or
(ii)
When
a
discrepancy
has
been
determined
between
the
tax
withheld
and
the
amount
actually
remitted
by
the
withholding
agent;
or
(iii)
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
quarter
or
quarters
of
the
succeeding
taxable
year;
or
(iv)
When
the
excise
tax
due
on
excisable
articles
has
not
been
paid;
or
(v)
When
an
article
locally
purchased
or
imported
by
an
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
above-cited
cases,
a
FLD/FAN
shall
be
issued
outright.
3.1.3
Formal
Letter
of
Demand
and
Final
Assessment
Notice
(FLD/FAN).
The
Formal
Letter
of
Demand
and
Final
Assessment
Notice
(FLD/FAN)
shall
be
issued
by
the
Commissioner
or
his
duly
authorized
representative.
The
FLD/FAN
calling
for
payment
of
the
taxpayer's
deficiency
tax
or
taxes
shall
state
the
facts,
the
law,
rules
and
regulations,
or
jurisprudence
on
which
the
assessment
is
based;
otherwise,
the
assessment
shall
be
void.
3.1.4
Disputed
Assessment.
The
taxpayer
or
its
authorized
representative
or
tax
agent
may
protest
administratively
against
the
aforesaid
FLD/FAN
within
thirty
(30)
days
from
date
of
receipt
18
RR
18-2013
deleted
the
informal
conference
Bianca
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II-Atty.
Bello
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thereof.
The
taxpayer
protesting
an
assessment
may
file
a
written
request
for
reconsideration
or
reinvestigation
defined
as
follows:
(i)
Request
for
reconsideration
refers
to
a
plea
of
re-evaluation
of
an
assessment
on
the
basis
of
existing
records
without
need
of
additional
evidence.
It
may
involve
both
a
question
of
fact
or
of
law
or
both.
(ii)
Request
for
reinvestigation
refers
to
a
plea
of
re-evaluation
of
an
assessment
on
the
basis
of
newly
discovered
or
additional
evidence
that
a
taxpayer
intends
to
present
in
the
reinvestigation.
It
may
also
involve
a
question
of
fact
or
of
law
or
both.
The
taxpayer
shall
state
in
his
protest:
(i) the
nature
of
protest
whether
reconsideration
or
reinvestigation,
specifying
newly
discovered
or
additional
evidence
he
intends
to
present
if
it
is
a
request
for
reinvestigation,
(ii) date
of
the
assessment
notice,
and
(iii) the
applicable
law,
rules
and
regulations,
or
jurisprudence
on
which
his
protest
is
based,
otherwise,
his
protest
shall
be
considered
void
and
without
force
and
effect.
If
there
are
several
issues
involved
in
the
FLD/FAN
but
the
taxpayer
only
disputes
or
protests
against
the
validity
of
some
of
the
issues
raised,
1. The
assessment
attributable
to
the
undisputed
issue
or
issues
shall
become
final,
executory
and
demandable;
2. and
the
taxpayer
shall
be
required
to
pay
the
deficiency
tax
or
taxes
attributable
thereto,
in
which
case,
a
collection
letter
shall
be
issued
to
the
taxpayer
calling
for
payment
of
the
said
deficiency
tax
or
taxes,
inclusive
of
the
applicable
surcharge
and/or
interest.
If
there
are
several
issues
involved
in
the
disputed
assessment
and
the
taxpayer
fails
to
state
the
facts,
the
applicable
law,
rules
and
regulations,
or
jurisprudence
in
support
of
his
protest
against
some
of
the
several
issues
on
which
the
assessment
is
based,
1. the
same
shall
be
considered
undisputed
issue
or
issues,
in
which
case,
the
assessment
attributable
thereto
shall
become
final,
executory
and
demandable;
2. and
the
taxpayer
shall
be
required
to
pay
the
deficiency
tax
or
taxes
attributable
thereto
and
a
collection
letter
shall
be
issued
to
the
taxpayer
calling
for
payment
of
the
said
deficiency
tax,
inclusive
of
the
applicable
surcharge
and/or
interest.
For
requests
for
reinvestigation,
the
taxpayer
shall
submit
all
relevant
supporting
documents
in
support
of
his
protest
within
sixty
(60)
days
from
date
of
filing
of
his
letter
of
protest,
otherwise,
the
assessment
shall
become
final.
The
term
relevant
supporting
documents
refer
to
those
documents
necessary
to
support
the
legal
and
factual
bases
in
disputing
a
tax
assessment
as
determined
by
the
taxpayer.
The
sixty
(60)-day
period
for
the
submission
of
all
relevant
supporting
documents
shall
not
apply
to
requests
for
reconsideration.
Furthermore,
the
term
the
assessment
shall
become
final
shall
mean
the
taxpayer
is
barred
from
disputing
the
correctness
of
the
issued
assessment
by
introduction
of
newly
discovered
or
additional
evidence,
and
the
FDDA
shall
consequently
be
denied.
If
the
taxpayer
fails
to
file
a
valid
protest
against
the
FLD/FAN
within
thirty
(30)
days
from
date
of
receipt
thereof,
the
assessment
shall
become
final,
executory
and
demandable.
No
request
for
reconsideration
or
reinvestigation
shall
be
granted
on
tax
assessments
that
Bianca
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have
already
become
final,
executory
and
demandable.
If
the
protest
is
denied,
in
whole
or
in
part,
by
the
Commissioners
duly
authorized
representative,
the
taxpayer
may
either:
(i) appeal
to
the
Court
of
Tax
Appeals
(CTA)
within
thirty
(30)
days
from
date
of
receipt
of
the
said
decision;
or
(ii) (ii)
elevate
his
protest
through
request
for
reconsideration
to
the
Commissioner
within
thirty
(30)
days
from
date
of
receipt
of
the
said
decision.
***No
request
for
reinvestigation
shall
be
allowed
in
administrative
appeal
and
only
issues
raised
in
the
decision
of
the
Commissioners
duly
authorized
representative
shall
be
entertained
by
the
Commissioner.
If
the
protest
is
not
acted
upon
by
the
Commissioners
duly
authorized
representative
1. Request
for
reconsideration
-
within
one
hundred
eighty
(180)
days
counted
from
the
date
of
filing
of
the
protest;
2. Request
for
reinvestigation
within
180
days
counted
from
date
of
submission
by
the
taxpayer
of
the
required
documents
within
sixty
(60)
days
from
the
date
of
filing
of
the
protest
in
case
of
a
request
for
reinvestigation
***The
taxpayer
may
either:
(i) appeal
to
the
CTA
within
thirty
(30)
days
after
the
expiration
of
the
one
hundred
eighty
(180)-day
period;
or
(ii) (ii)
await
the
final
decision
of
the
Commissioners
duly
authorized
representative
on
the
disputed
assessment.
If
the
protest
or
administrative
appeal,
as
the
case
may
be,
is
denied,
in
whole
or
in
part,
by
the
Commissioner,
the
taxpayer
may
appeal
to
the
CTA
within
thirty
(30)
days
from
date
of
receipt
of
the
said
decision.
Otherwise,
the
assessment
shall
become
final,
executory
and
demandable.
***A
motion
for
reconsideration
of
the
Commissioners
denial
of
the
protest
or
administrative
appeal,
as
the
case
may
be,
shall
not
toll
the
thirty
(30)-day
period
to
appeal
to
the
CTA.
If
the
protest
or
administrative
appeal
is
not
acted
upon
by
the
Commissioner
within
one
hundred
eighty
(180)
days
counted
from
the
date
of
filing
of
the
protest,
the
taxpayer
may
either:
(i)
appeal
to
the
CTA
within
thirty
(30)
days
from
after
the
expiration
of
the
one
hundred
eighty
(180)-day
period;
or
(ii)
await
the
final
decision
of
the
Commissioner
on
the
disputed
assessment
and
appeal
such
final
decision
to
the
CTA
within
thirty
(30)
days
after
the
receipt
of
a
copy
of
such
decision.
It
must
be
emphasized,
however,
that
in
case
of
inaction
on
protested
assessment
within
the
180-day
period,
the
option
of
the
taxpayer
to
either:
(1)
file
a
petition
for
review
with
the
CTA
within
30
days
after
the
expiration
of
the
180-day
period;
or
(2)
await
the
final
decision
of
the
Commissioner
or
his
duly
authorized
representative
on
the
disputed
assessment
and
appeal
such
final
decision
to
the
CTA
within
30
days
after
the
receipt
of
a
copy
of
such
decision,
are
***mutually
exclusive
and
the
resort
to
one
bars
the
application
of
the
other.
3.1.5
Final
Decision
on
a
Disputed
Assessment
(FDDA).
The
decision
of
the
Commissioner
or
his
duly
authorized
representative
shall
state
the
Bianca
Mendoza/ALS
3B
2016/Tax
II-Atty.
Bello
30
(i)
facts,
the
applicable
law,
rules
and
regulations,
or
jurisprudence
on
which
such
decision
is
based,
otherwise,
the
decision
shall
be
void
and
(ii)
that
the
same
is
his
final
decision.
3.1.6
Modes
of
Service.
The
notice
(PAN/FLD/FAN/FDDA)
to
the
taxpayer
herein
required
may
be
served
by
the
Commissioner
or
his
duly
authorized
representative
through
the
following
modes:
(i)
The
notice
shall
be
served
through
personal
service
by
delivering
personally
a
copy
thereof
to
the
party
at
his
registered
or
known
address
or
wherever
he
may
be
found.
A
known
address
shall
mean
a
place
other
than
the
registered
address
where
business
activities
of
the
party
are
conducted
or
his
place
of
residence.
In
case
personal
service
is
not
practicable,
the
notice
shall
be
served
by
substituted
service
or
by
mail.
(ii)
Substituted
service
can
be
resorted
to
when
the
party
is
not
present
at
the
registered
or
known
address
under
the
following
circumstances:
1. The
notice
may
be
left
at
the
partys
registered
address,
with
his
clerk
or
with
a
person
having
charge
thereof.
***
Should
the
party
be
found
at
his
registered
or
known
address
or
any
other
place
but
refuse
to
receive
the
notice,
the
revenue
officers
concerned
shall
bring
a
barangay
official
and
two
(2)
disinterested
witnesses
in
the
presence
of
the
party
so
that
they
may
personally
observe
and
attest
to
such
act
of
refusal.
The
notice
shall
then
be
given
to
said
barangay
official.
Such
facts
shall
be
contained
in
the
bottom
portion
of
the
notice,
as
well
as
the
names,
official
position
and
signatures
of
the
witnesses.
2. If
the
known
address
is
a
place
where
business
activities
of
the
party
are
conducted,
the
notice
may
be
left
with
his
clerk
or
with
a
person
having
charge
thereof.
3. If
the
known
address
is
the
place
of
residence,
substituted
service
can
be
made
by
leaving
the
copy
with
a
person
of
legal
age
residing
therein.
4. If
no
person
is
found
in
the
partys
registered
or
known
address,
the
revenue
officers
concerned
shall
bring
a
barangay
official
and
two
(2)
disinterested
witnesses
to
the
address
so
that
they
may
personally
observe
and
attest
to
such
absence.
The
notice
shall
then
be
given
to
said
barangay
official.
***Such
facts
shall
be
contained
in
the
bottom
portion
of
the
notice,
as
well
as
the
names,
official
position
and
signatures
of
the
witnesses.
Disinterested
witnesses
refers
to
persons
of
legal
age
other
than
employees
of
the
Bureau
of
Internal
Revenue.
(iii)
Service
by
mail
is
done
by
sending
a
copy
of
the
notice
by
registered
mail
to
the
registered
or
known
address
of
the
party
with
instruction
to
the
Postmaster
to
return
the
mail
to
the
sender
after
ten
(10)
days,
if
undelivered.
A
copy
of
the
notice
may
also
be
sent
through
reputable
professional
courier
service.
If
no
registry
or
reputable
professional
courier
service
is
available
in
the
locality
of
the
addressee,
service
may
be
done
by
ordinary
mail.
The
server
shall
accomplish
the
bottom
portion
of
the
notice.
He
shall
also
make
a
written
report
under
oath
before
a
Notary
Public
or
any
person
authorized
to
administer
oath
under
Section
14
of
the
NIRC,
as
amended,
setting
forth
the
manner,
place
and
date
of
service,
the
name
of
the
person/barangay
official/professional
courier
service
company
who
received
the
same
and
such
other
relevant
information.
The
registry
receipt
issued
by
the
post
office
or
the
official
receipt
Bianca
Mendoza/ALS
3B
2016/Tax
II-Atty.
Bello
31
issued
by
the
professional
courier
company
containing
sufficiently
identifiable
details
of
the
transaction
shall
constitute
sufficient
proof
of
mailing
and
shall
be
attached
to
the
case
docket.
Service
to
the
tax
agent/practitioner,
who
is
appointed
by
the
taxpayer
under
circumstances
prescribed
in
the
pertinent
regulations
on
accreditation
of
tax
agents,
shall
be
deemed
service
to
the
taxpayer.
B.
Notice
of
Informal
Conference
Bank
of
the
Phil.
Islands
v.
CIR,
CTA
Case
No.
6593,
Aug.
31,
2004
TP
received
a
PAN
regarding
deficiency
DST
and
withholding
taxes.
He
now
claims
that
the
non-observance
of
the
sections
of
Revenue
Regulations
No.
12-85
violated
its
right
to
due
process.
Petitioner
admitted
that
it
received
a
PAN
then
duly
protested
and
requested
for
a
reconsideration
or
reinvestigation.
BIR
then
issued
FAN
and
demand
notices.
thereof.
But
petitioner
cannot
claim
denial
of
due
process
nor
allege
procedural
defects
with
respect
to
the
subject
deficiency
documentary
stamp
tax
assessment
and
not
with
regard
to
the
deficiency
withholding
tax
assessment
that
was
cancelled
as
they
were
only
in
one
notice.
Moreover,
failure
to
issue
notice
for
an
informal
conference
does
not
invalidate
the
assessments.
Revenue
Regulations
No.
12-85
does
not
provide
so
nor
does
Section
319
of
the
Tax
Code
that
its
implementation.
C.
Preliminary
Assessment
Notice
(PAN)19
-
***for
protest
you
use
respond
or
reply
Sec.
228,
NIRC
TP
shall
respond
within
15
days
otherwise
he
shall
be
considered
in
default,
in
which
a
formal
demand
and
assessment
shall
be
issued
to
him.
If
TP
files
reply
disagreeing
with
PAN,
FAN
and
FLD
shall
be
issued.
Pier
8
Arrastre
and
Stevedoring
Services
v.
CIR,
CTA
Case
No.
3789,
Aug.
1,
1991
Failure
to
appear
and/or
present
evidence
during
PAN
stage
or
even
during
the
protest
period
does
not
mean
a
waiver
of
right
to
present
evidence
to
dispute
the
assessment
Such
failure
is
not
equivalent
to
an
implied
admission
of
the
correctness
of
the
tax
assessment
It
is
only
when
TP
fails
to
files
a
timely
protest
on
the
FAN
or
fails
to
timely
appeal
the
denial
of
the
protest
would
the
assessment
become
final,
unappealable,
and
executor
thereby
negating
the
TPs
right
to
present
evidence
precisely
because
the
right
to
dispute
assessment
has
prescribed
and
the
court
can
no
longer
acquire
jurisdiction
over
the
same
1.
Exceptions
Sec.
228(a)
to
(e),
NIRC
(a)
When
the
finding
for
any
deficiency
tax
is
the
result
of
mathematical
error
in
the
computation
of
the
tax
as
appearing
on
the
face
of
the
return;
or
(b)
When
a
discrepancy
has
been
determined
between
the
tax
withheld
and
the
amount
actually
remitted
by
the
withholding
agent;
or
(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
quarter
or
quarters
of
the
succeeding
taxable
year;
or
(d)
When
the
excise
tax
due
on
exciseable
articles
has
not
been
paid;
or
(e)
When
the
article
locally
purchased
or
imported
by
an
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.
19
Atty
Bello,
PAN
is
now
merely
a
token
reply
FAN/FLD
will
still
issue.
Bianca
Mendoza/ALS
3B
2016/Tax
II-Atty.
Bello
32
2.
Effect
of
Failure
to
Receive
PAN
CIR
v.
Menguito,
G.R.
No.
167560,
Sept.
17,
2008
While
the
lack
of
a
post-reporting
notice
and
pre-assessment
notice
is
a
deviation
from
the
requirements
under
Revenue
Regulation
No.
12-85,
the
same
cannot
detract
from
the
fact
that
formal
assessments
were
issued
to
and
actually
received
by
respondents
in
accordance
with
Section
228
of
the
National
Internal
Revenue
Code.
It
should
be
emphasized
that
the
stringent
requirement
that
an
assessment
notice
be
satisfactorily
proven
to
have
been
issued
and
released
or,
if
receipt
thereof
is
denied,
that
said
assessment
notice
have
been
served
on
the
taxpayer,
applies
only
to
formal
assessments,
but
not
to
post-reporting
notices
or
pre-assessment
notices.
The
issuance
of
a
valid
formal
assessment
is
a
substantive
prerequisite
to
tax
collection
Due
process
requires
that
it
must
be
served
on
and
received
by
the
taxpayer
Hence,
the
lack
of
such
notices
inflicts
no
prejudice
on
the
taxpayer
for
as
long
as
the
latter
is
properly
served
a
formal
assessment
notice
CIR
v.
Metro
Star
Superama,
G.R.
No.
185371,
Dec.
8,
2010
WON
FAN
is
sufficient?
NO.
Indeed,
Section
228
of
the
Tax
Code
clearly
requires
that
the
taxpayer
must
first
be
informed
that
he
is
liable
for
deficiency
taxes
through
the
sending
of
a
PAN.
He
must
be
informed
of
the
facts
and
the
law
upon
which
the
assessment
is
made.
The
law
imposes
a
substantive,
not
merely
a
formal,
requirement.
The
sending
of
a
PAN
to
taxpayer
to
inform
him
of
the
assessment
made
is
but
part
of
the
due
process
requirement
in
the
issuance
of
a
deficiency
tax
assessment,
the
absence
of
which
renders
nugatory
any
assessment
made
by
the
tax
authorities.
The
use
of
the
word
shall
in
subsection
3.1.2
describes
the
mandatory
nature
of
the
service
of
a
PAN..
Thus,
for
its
failure
to
send
the
PAN
stating
the
facts
and
the
law
on
which
the
assessment
was
made
as
required
by
Section
228
of
R.A.
No.
8424,
the
assessment
made
by
the
CIR
is
void.
***CIR
v
Menguito
contrary
to
CIR
v
Metro
Star
Superama?
NO.
RA
No.
8424
has
already
amended
the
provision
of
Section
229
on
protesting
an
assessment.
The
old
requirement
of
merely
notifying
the
taxpayer
of
the
CIRs
findings
was
changed
in
1998
to
informing
the
taxpayer
of
not
only
the
law,
but
also
of
the
facts
on
which
an
assessment
would
be
made.
Otherwise,
the
assessment
itself
would
be
invalid.
The
regulation
then,
on
the
other
hand,
simply
provided
that
a
notice
be
sent
to
the
respondent
in
the
form
prescribed,
and
that
no
consequence
would
ensue
for
failure
to
comply
with
that
form.
D.
Final
Assessment
Notice
-
***for
FAN,
you
use
protest
SEC.
228.
TP
to
file
a
protest
within
30
days,
otherwise
the
assessment
shall
become
final,
executor
and
demandable
E.
Requirement
to
Inform
Taxpayer
of
Factual
and
Legal
Basis
of
Assessment20
Sec.
228,
NIRC
-
The
taxpayers
shall
be
informed
in
writing
of
the
law
and
the
facts
on
which
the
assessment
is
made;
otherwise,
the
assessment
shall
be
VOID.
CIR
v.
Reyes,
G.R.
No.
159694,
Jan.
27,
2006
20
Notes
from
class:
What
is
the
minimum
requirement
for
informing
TP
of
facts
and
law?
In
writing.
At
what
stage?
During
FAN/FLD/detail
of
discrepancy
(required?
Yes.
Enron
case)
****Though
not
written
in
the
law,
TP
also
has
the
obligation
to
assert
the
facts
and
laws
of
the
protest
because
what
is
required
of
him
is
not
only
the
timely
filing
of
the
protest
but
he
must
also
be
able
to
indicate
the
errors
and
be
able
to
substantiate
such
contentions.
Bianca
Mendoza/ALS
3B
2016/Tax
II-Atty.
Bello
33
Void.
Merely
notifying
the
TP
of
the
BIRs
findings
without
informing
the
TP
of
factual
and
legal
basis
is
insufficient.
To
be
simply
informed
in
writing
of
the
investigation
being
conducted
and
of
the
recommendation
for
the
assessment
of
the
estate
taxes
due
is
nothing
but
a
perfunctory
discharge
of
the
tax
function
of
correctly
assessing
a
TP.
The
act
cannot
be
taken
that
the
TP
already
knew
the
law
and
the
facts
on
which
the
assessment
is
based.
CIR
v.
Enron
Subic
Power
Corp.,
G.R.
No.
166387,
Jan.
19,
200921
Void.
The
legal
and
factual
bases,
were
however,
not
indicated.
Even
though
they
were
furnished
with
the
copy
of
the
audit
working
papers,
these
were
not
a
valid
substitute
for
the
mandatory
notice
in
writing
of
the
legal
and
factual
bases.
The
law
requires
that
the
legal
and
factual
bases
of
the
assessment
be
stated
in
the
formal
letter
of
demand
and
the
assessment
notice.
Australasia
Cylinder
Corp.
v.
CIR,
CTA
Case
No.
6014,
Aug.
14,
2002
Void.
The
demand
letter
was
devoid
of
factual
as
well
as
legal
bases
that
would
enlighten
anyone,
this
court
included,
on
how
and
why
the
assessment
was
reached.
The
computation
made
by
the
respondent
lacked
any
support
and
did
not
state
the
basis
either
in
fact
or
in
law
for
the
disallowances
made.
Neither
did
the
assessment
notice
nor
the
demand
letter
explain
why
the
total
tax
credits
ofP776,671.36
was
not
recognized
by
the
respondent.
Abbot
Laboratories
v.
CIR,
CTA
Case
No.
5718,
Feb.
16,
2001
Void.
CIR
must
not
only
inform
the
TP
of
the
law
but
more
importantly
the
surrounding
circumstance
supporting
the
assessment,
for
it
is
only
through
a
detailed
appraisal
of
its
basis
that
the
TP
may
be
able
to
dispute
the
imposition
or
agree
with
it.
PNZ
Marketing
v.
CIR,
CTA
Case
No.
5726,
Dec.
14,
2001
Valid.
The
assessment
notice,
while
vague
at
first
glance
is
subsequently
cured
by
the
demand
letter
that
shows
the
legal
and
factual
basis
relied
upon
in
issuing
the
assessment.
The
demand
letter
contains
the
reasons
why
a
deficiency
income
tax
assessment
was
issued
against
TP.
Factual
and
legal
basis
embodied
in
the
FDL
attached
to
the
FAN
complies
with
Sec
228.
Sevilla
v.
CIR,
CTA
Case
No.
6211,
Oct.
4,
2004
Valid.
Even
though
BIR
did
not
provide
the
specific
provision
of
the
NIRC
or
other
internal
revenue
laws
as
bases
for
the
assessments
but
by
indicating
the
kind
of
tax
the
TP
were
liable
was
a
substantial
compliance
with
the
requirements
of
Sec
228.
And
in
this
case,
the
TP
was
able
to
intelligently
argue
its
case
and
elucidate
the
reasons
for
the
assessment
so
he
cant
contradict
himself
by
asserting
that
it
was
not
informed
of
the
laws
and
facts
of
the
assessment.
Further,
the
TP
had
already
been
informed
during
the
preliminary
stage
of
the
bases
for
the
assessment,
he
could
not
now
insist
it
was
not
informed.
FMF
Development
Corp.
v.
CIR,
CTA
Case
No.
6153,
March
20,
2003
Valid.
Words
"not
necessary",
"unsupported"
and
"unaccounted"
followed
by
the
specific
provision
of
the
Tax
Code
violated
is
sufficient
to
inform
the
petitioner
of
the
factual
and
legal
basis
of
the
assessment
issued.
Said
notations
were
likewise
indicated
in
the
income
tax
demand
letter
which
was
attached
to
the
deficiency
income
tax
assessment
notice.
This
is
particularly
true
where,
prior
to
the
issuance
of
the
same,
several
informal
conferences
were
held
to
afford
the
taxpayer
the
opportunity
to
present
his
side
and
be
informed
of
the
basis
of
the
deficiency
assessment.
These
lead
to
the
logical
conclusion
that
the
petitioner
21
In
this
case,
CIR
merely
itemized
the
deductions
disallowed
and
included
these
in
the
gross
income
and
imposed
preferential
rate
of
5%
on
some
items
categorized
by
Enron
as
cost.
It
also
sent
TP
its
audit
working
papers.
Bianca
Mendoza/ALS
3B
2016/Tax
II-Atty.
Bello
34
had
prior
knowledge
of
the
cause
of
disallowances
and/or
unaccounted
income.
The
intrinsic
validity
of
the
assessment
notice
should
be
given
more
weight
rather
than
its
form
or
extrinsic
features.
Subic
Power
Corp.
v.
CIR,
CTA
Case
No.
6059,
May
8,
2003
Valid.
If
the
taxpayer
is
able
to
intelligently
argue
its
case
and
elucidate
the
reasons
for
the
assessment,
as
in
this
case,
then
it
cannot
contradict
itself
by
asserting
that
it
was
not
informed
of
the
law
and
facts
on
which
the
assessment
was
made.
In
whatever
form
and
manner,
as
long
as
the
taxpayer
is
informed
of
how
the
assessment
was
arrived
at,
then
Section
228
has
not
been
violated.
Phil.
Mining
Service
Corp.
v.
CIR,
CTA
Case
No.
5725,
July
25,
2002
Valid.
The
BIR
sent
a
letter
to
TP
informing
the
latter
that
a
report
of
investigation
on
its
income
and
business
tax
returns
had
been
submitted
for
appropriate
action.
Attached
thereto
were
the
report
of
investigation
and
the
memorandum
of
RO
recommending,
among
others,
the
issuance
of
an
assessment
notice
for
the
alleged
deficiency
taxes.
The
attached
investigation
report
of
Revenue
Officer
contained
the
detailed
findings
made
by
the
latter,
the
facts
and
the
law
on
which
the
recommended
assessments
were
based.
Moreover,
in
its
protest
petitioner
was
able
to
effectively
contest
the
subject
assessments
and
submit
documents
to
support
its
claim
that
the
assessments
were
erroneous.
Oceanic
Wireless
Network
v.
CIR,
CTA
Case
No.
6111,
Nov.
3,
2004
Valid.
TP
was
able
to
protest
the
assessments
intelligently,
thereby
implying
that
it
had
actual
knowledge
of
the
factual
and
legal
bases
of
the
assessments.
The
fact
that
petitioner
was
furnished
the
computation
and
brief
explanation
of
the
how
the
assessment
for
deficiency
quarterly
income
tax
was
arrived
at,
the
requirement
under
Section
228
of
the
1997
Tax
Code
is
deemed
complied
with.
Petitioner
was
notified
of
the
specific
provision
of
law
on
which
the
assessment
was
based.
This
is
evident
in
the
Details
of
Discrepancies
wherein
Sections
75
and
76
(of
the
1997
Tax
Code)
were
written.
F.
Submission
of
Supporting
Documents22
Sec.
228,
NIRC
-
Within
sixty
(60)
days
from
filing
of
the
protest,
all
relevant
supporting
documents
shall
have
been
submitted
1.
Effect
of
Non-Compliance
Sec.
228,
NIRC,
4th
par.
-
otherwise,
the
assessment
shall
become
FINAL.
2.
What
Constitutes
Relevant
Supporting
Documents23
H.
Tambunting
Pawnshop,
Inc.
v.
CIR,
CTA
Case
No.
6238,
Oct.
8,
2004
Relevant
supporting
documents
mentioned
in
the
law
refers
to
such
documents
that
the
taxpayer
feels
would
be
necessary
to
support
his
protest
and
not
what
the
respondent
commissioner
feels
should
be
submitted,
otherwise,
petitioner
taxpayer
would
always
be
at
22
For
requests
for
reinvestigation,
the
taxpayer
shall
submit
all
relevant
supporting
documents
in
support
of
his
protest
within
sixty
(60)
days
from
date
of
filing
of
his
letter
of
protest,
otherwise,
the
assessment
shall
become
final.
The
term
relevant
supporting
documents
refer
to
those
documents
necessary
to
support
the
legal
and
factual
bases
in
disputing
a
tax
assessment
as
determined
by
the
taxpayer.
The
sixty
(60)-day
period
for
the
submission
of
all
relevant
supporting
documents
shall
not
apply
to
requests
for
reconsideration.
(RR
18-2013)
23
So
what
can
BIR
do
if
it
feels
the
relevant
supporting
documents
are
insufficient?
They
can
deny
the
protest
but
not
consider
it
as
a
failure
to
submit
such
documents.
Bianca
Mendoza/ALS
3B
2016/Tax
II-Atty.
Bello
35
the
mercy
of
the
BIR
that
may
require
production
of
such
documents
which
taxpayer
couldnt
produce.
CIR
v.
First
Express
Pawnshop
Co.,
Inc.,
G.R.
No.
172045-46,
June
16,
2009
The
term
relevant
supporting
documents
should
be
understood
as
those
documents
necessary
to
support
the
legal
basis
in
disputing
a
tax
assessment
as
determined
by
the
taxpayer.
The
BIR
can
only
inform
the
taxpayer
to
submit
additional
documents.
The
BIR
cannot
demand
what
type
of
supporting
documents
should
be
submitted.
Otherwise,
a
taxpayer
will
be
at
the
mercy
of
the
BIR,
which
may
require
the
production
of
documents
that
a
taxpayer
cannot
submit.
G.
Effect
of
Failure
to
File
Protest
Sec.
228,
NIRC
Such
assessment
may
be
protested
administratively
by
filing
a
request
for
reconsideration
or
reinvestigation
within
thirty
(30)
days
from
receipt
of
the
assessment
in
such
form
and
manner
as
may
be
prescribed
by
implementing
rules
and
regulations
[failure
to
do
this
=
final,
unappealable
and
executory]
Dayrit
v.
Cruz,
165
SCRA
571
(1988)
A
letter
asking
for
reconsideration
of
the
assessments
cannot
be
considered
as
one
disputing
the
assessments
because
TP
failed
to
substantiate
their
claim
that
the
deficiency
assessments
are
contrary
to
law.
TP
also
asked
for
30
days
to
submit
position
paper
which
he
failed
to
do,
thus
the
letter
of
request
for
reconsideration
is
nothing
but
a
mere
scrap
of
paper.
Further,
failure
to
file
said
position
paper
may
be
construed
as
an
abandonment
of
request
for
reconsideration.
The
act
of
the
CIR
to
institute
the
action
for
collection
may
be
considered
as
denial
thus
appealable
to
the
CTA.
III.
IN
CASE
OF
DENIAL
OF
PROTEST
OR
INACTION,
APPEAL
TO
CTA
A.
Scope
of
Jurisdiction
of
CTA/What
is
Appealable
to
CTA
Sec.
4,
2nd
par.,
NIRC
The
power
to
decide
disputed
assessments,
refunds
of
internal
revenue
taxes,
fees
or
other
charges,
penalties
imposed
in
relation
thereto,
or
other
matters
arising
under
this
Code
or
other
laws
or
portions
thereof
administered
by
the
Bureau
of
Internal
Revenue
is
vested
in
the
Commissioner,
subject
to
the
exclusive
appellate
jurisdiction
of
the
Court
of
Tax
Appeals.
Sec.
228,
NIRC
If
the
protest
is
denied
in
whole
or
in
part,
or
is
not
acted
upon
within
one
hundred
eighty
(180)
days
from
submission
of
documents,
the
taxpayer
adversely
affected
by
the
decision
or
inaction
may
appeal
to
the
Court
of
Tax
Appeals
within
thirty
(30)
days
from
receipt
of
the
said
decision,
or
from
the
lapse
of
one
hundred
eighty
(180)-day
period;
otherwise,
the
decision
shall
become
final,
executory
and
demandable.
Sec.
7,
Rep.
Act
No.
1125,
as
amended
by
Rep.
Act
No.
9282
Sec.
7.
Jurisdiction.
-
The
CTA
shall
exercise:
a.
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
in
relation
thereto,
or
other
matters
arising
under
the
National
Internal
Revenue
or
other
laws
administered
by
the
Bureau
of
Internal
Revenue;
2.
Inaction
by
the
Commissioner
of
Internal
Revenue
in
cases
involving
disputed
assessments,
refunds
of
internal
revenue
taxes,
fees
or
other
charges,
penalties
in
relations
thereto,
or
Bianca
Mendoza/ALS
3B
2016/Tax
II-Atty.
Bello
36
other
matters
arising
under
the
National
Internal
Revenue
Code
or
other
laws
administered
by
the
Bureau
of
Internal
Revenue,
where
the
National
Internal
Revenue
Code
provides
a
specific
period
of
action,
in
which
case
the
inaction
shall
be
deemed
a
denial;
3.
Decisions,
orders
or
resolutions
of
the
Regional
Trial
Courts
in
local
tax
cases
originally
decided
or
resolved
by
them
in
the
exercise
of
their
original
or
appellate
jurisdiction;
4.
Decisions
of
the
Commissioner
of
Customs
in
cases
involving
liability
for
customs
duties,
fees
or
other
money
charges,
seizure,
detention
or
release
of
property
affected,
fines,
forfeitures
or
other
penalties
in
relation
thereto,
or
other
matters
arising
under
the
Customs
Law
or
other
laws
administered
by
the
Bureau
of
Customs;
5.
Decisions
of
the
Central
Board
of
Assessment
Appeals
in
the
exercise
of
its
appellate
jurisdiction
over
cases
involving
the
assessment
and
taxation
of
real
property
originally
decided
by
the
provincial
or
city
board
of
assessment
appeals;
6.
Decisions
of
the
Secretary
of
Finance
on
customs
cases
elevated
to
him
automatically
for
review
from
decisions
of
the
Commissioner
of
Customs
which
are
adverse
to
the
Government
under
Section
2315
of
the
Tariff
and
Customs
Code;
7.
Decisions
of
the
Secretary
of
Trade
and
Industry,
in
the
case
of
nonagricultural
product,
commodity
or
article,
and
the
Secretary
of
Agriculture
in
the
case
of
agricultural
product,
commodity
or
article,
involving
dumping
and
countervailing
duties
under
Section
301
and
302,
respectively,
of
the
Tariff
and
Customs
Code,
and
safeguard
measures
under
Republic
Act
No.
8800,
where
either
party
may
appeal
the
decision
to
impose
or
not
to
impose
said
duties.
b.
Jurisdiction
over
cases
involving
criminal
offenses
as
herein
provided:
1.
Exclusive
original
jurisdiction
over
all
criminal
offenses
arising
from
violations
of
the
National
Internal
Revenue
Code
or
Tariff
and
Customs
Code
and
other
laws
administered
by
the
Bureau
of
Internal
Revenue
or
the
Bureau
of
Customs:
Provided,
however,
That
offenses
or
felonies
mentioned
in
this
paragraph
where
the
principal
amount
of
taxes
and
fees,
exclusive
of
charges
and
penalties,
claimed
is
less
than
One
million
pesos
(P1,000,000.00)
or
where
there
is
no
specified
amount
claimed
shall
be
tried
by
the
regular
Courts
and
the
jurisdiction
of
the
CTA
shall
be
appellate.
Any
provision
of
law
or
the
Rules
of
Court
to
the
contrary
notwithstanding,
the
criminal
action
and
the
corresponding
civil
action
for
the
recovery
of
civil
liability
for
taxes
and
penalties
shall
at
all
times
be
simultaneously
instituted
with,
and
jointly
determined
in
the
same
proceeding
by
the
CTA,
the
filing
of
the
criminal
action
being
deemed
to
necessarily
carry
with
it
the
filing
of
the
civil
action,
and
no
right
to
reserve
the
filling
of
such
civil
action
separately
from
the
criminal
action
will
be
recognized.
2.
Exclusive
appellate
jurisdiction
in
criminal
offenses:
a.
Over
appeals
from
the
judgments,
resolutions
or
orders
of
the
Regional
Trial
Courts
in
tax
cases
originally
decided
by
them,
in
their
respected
territorial
jurisdiction.
b.
Over
petitions
for
review
of
the
judgments,
resolutions
or
orders
of
the
Regional
Trial
Courts
in
the
exercise
of
their
appellate
jurisdiction
over
tax
cases
originally
decided
by
the
Metropolitan
Trial
Courts,
Municipal
Trial
Courts
and
Municipal
Circuit
Trial
Courts
in
their
respective
jurisdiction.
c.
Jurisdiction
over
tax
collection
cases
as
herein
provided:
1.
Exclusive
original
jurisdiction
in
tax
collection
cases
involving
final
and
executory
assessments
for
taxes,
fees,
charges
and
penalties:
Provided,
however,
That
collection
cases
where
the
principal
amount
of
taxes
and
fees,
exclusive
of
charges
and
penalties,
claimed
is
less
than
One
million
pesos
(P1,000,000.00)
shall
be
tried
by
the
proper
Municipal
Trial
Court,
Metropolitan
Trial
Court
and
Regional
Trial
Court.
2.
Exclusive
appellate
jurisdiction
in
tax
collection
cases:
24
If
the
protest
is
not
acted
upon
by
the
Commissioners
duly
authorized
representative
1. Request
for
reconsideration
-
within
one
hundred
eighty
(180)
days
counted
from
the
date
of
filing
of
the
protest;
2. Request
for
reinvestigation
within
180
days
counted
from
date
of
submission
by
the
taxpayer
of
the
required
documents
within
sixty
(60)
days
from
the
date
of
filing
of
the
protest
in
case
of
a
request
for
reinvestigation
Bianca
Mendoza/ALS
3B
2016/Tax
II-Atty.
Bello
38
Customs,
the
Secretary
of
Finance,
the
Secretary
of
Trade
and
Industry,
the
Secretary
of
Agriculture,
or
a
Regional
Trial
Court
in
the
exercise
of
its
original
jurisdiction
may
appeal
to
the
Court
by
petition
for
review
filed
within
thirty
days
after
receipt
of
a
copy
of
such
decision
or
ruling,
or
expiration
of
the
period
fixed
by
law
for
the
Commissioner
of
Internal
Revenue
to
act
on
the
disputed
assessments.
In
case
of
inaction
of
the
Commissioner
of
Internal
revenue
on
claims
for
refund
of
internal
revenue
taxes
erroneously
or
illegally
collected,
the
taxpayer
must
file
a
petition
for
review
within
the
two-year
period
prescribed
by
law
from
payment
or
collection
of
the
taxes.
Lascona
Land
Co.,
Inc.
v.
CIR,
CTA
Case
No.
5777,
Jan.
4,
2000
WON
after
the
30
days
after
the
180
days
rule,
the
assessment
becomes
final?
NO.
The
wordings
of
Section
228
of
the
Tax
Code
clearly
provide
that
it
is
only
the
decision
not
appealed
by
the
taxpayer
that
becomes
final,
executory
and
demandable.
In
cases
of
inaction,
TP
is
given
the
ff
options:
1. He
may
appeal
to
the
Court
of
Tax
Appeals
within
thirty
(30)
days
from
the
lapse
of
the
one
hundred
eighty
(180)
day
period
provided
for
under
the
said
section,
or
2.
He
may
wait
until
the
Commissioner
decides
on
his
protest
before
he
elevates
his
case.
TP
is
given
this
option
so
that
in
case
his
protest
is
not
acted
upon
within
the
180-day
period,
he
may
be
able
to
seek
immediate
relief
and
need
not
wait
for
an
indefinite
period
of
time
for
the
Commissioner
to
decide.
But
if
he
chooses
to
wait
for
a
positive
action
on
the
part
of
the
Commissioner,
then
the
same
could
not
result
in
the
assessment
becoming
final,
executory
and
demandable.
Rizal
Commercial
Banking
Corp.
v.
CIR,
G.R.
No.
168498,
April
24,
2007
Options
provided
in
Lacsona
are
MUTUALLY
EXCLUSIVE,
and
resort
to
one
bars
the
application
of
the
other.
In
this
case,
CIR
did
not
act
upon
the
disputed
assessment
within
180
days
from
date
of
submission
of
documents
so
TP
filed
a
petition
for
review
before
the
CTA.
However
the
same
was
filed
beyond
the
period
prescribed.
It
cant
file
an
appeal
before
the
CTA
beyond
the
period
on
the
pretext
that
the
assessment
has
not
been
acted
upon
by
the
CIR.
C.
What
Constitutes
Denial
of
Protest/Decision
on
Disputed
Assessment
1.
General
Rule:
FDDA
(Final
Demand
on
Disputed
Assessment)25
2.
Issuance
of
Revised
Assessment
Upon
Reinvestigation
Avon
Products
Mfg.,
Inc.
v.
CIR,
CTA
Case
No.
5908,
Jan.
20,
2005
Three
kinds
of
taxes
is
disputed.
Acting
upon
the
protest,
CIR
revised
the
assessment
and
only
demanding
the
other
two
taxes.
It
is
held
that
this
is
a
denial
because
in
the
wording
of
Sec
228:
denial
in
whole
and
in
part.
Since
there
was
already
part
denial,
it
is
appealable
to
the
CTA.
Atty.
Bello
said
this
applies
to
reduction
of
taxes
too
because
the
amount
still
demanded
is
the
denied
part
thus
could
be
brought
to
the
CTA.
3.
Final
Notice
Before
Seizure
CIR
v.
Isabela
Cultural
Corp.,
361
SCRA
71
(2001)
25
3.1.5
Final
Decision
on
a
Disputed
Assessment
(FDDA).
The
decision
of
the
Commissioner
or
his
duly
authorized
representative
shall
state
the
(i)
facts,
the
applicable
law,
rules
and
regulations,
or
jurisprudence
on
which
such
decision
is
based,
otherwise,
the
decision
shall
be
void
and
(ii)
that
the
same
is
his
final
decision.
Bianca
Mendoza/ALS
3B
2016/Tax
II-Atty.
Bello
39
Not
only
was
the
Notice
the
only
response
received,
its
contents
and
tenor
supported
the
theory
that
it
was
the
CIRs
final
act
regarding
the
request
for
reconsideration.
The
very
title
expressly
indicated
that
it
was
a
final
notice
prior
to
seizure
of
property.
The
letter
itself
clearly
stated
that
TP
was
being
given
this
last
opportunity
to
pay,
otherwise,
its
properties
would
be
subjected
to
distraint
and
levy.
4.
Final
Demand
Letter
CIR
v.
Ayala
Securities
Corp.,
70
SCRA
204
(1976)
The
letter
reiterated
the
demand
of
the
BIR
and
for
its
immediate
payment
is
tantamount
to
denial
of
protest
for
reconsideration
of
the
firm
stand
of
the
BIR
against
the
disputed
assessment.
This
being
said,
the
letter
amounted
to
a
decision
which
places
the
case
within
the
ambit
of
the
CTA.
Surigao
Electric
Co.
Inc.
v.
CTA,
57
SCRA
523
(1974)
The
letter
unquestionably
constitutes
the
final
action
taken
by
the
Commissioner
on
the
petitioner's
several
requests
for
reconsideration
and
recomputation.
In
this
letter,
the
Commissioner
not
only
in
effect
demanded
that
the
petitioner
pay
the
amount
but
also
gave
warning
that
in
the
event
it
failed
to
pay,
the
said
Commissioner
would
be
constrained
to
enforce
the
collection
thereof
by
means
of
the
remedies
provided
by
law.
The
tenor
of
the
letter,
specifically,
the
statement
regarding
the
resort
to
legal
remedies,
unmistakably
indicates
the
final
nature
of
the
determination
made
by
the
Commissioner
of
the
petitioner's
deficiency
franchise
tax
liability.
CTA
held
to
be
actions
appealable
to
the
CTA:
(a)
a
letter
which
stated
the
result
of
the
investigation
requested
by
the
taxpayer
and
the
consequent
modification
of
the
assessment;
(b)
letter
which
denied
the
request
of
the
taxpayer
for
the
reconsideration
cancellation,
or
withdrawal
of
the
original
assessment;
(c)
a
letter
which
contained
a
demand
on
the
taxpayer
for
the
payment
of
the
revised
or
reduced
assessment;
and
(d)
a
letter
which
notified
the
taxpayer
of
a
revision
of
previous
assessments.
5.
Filing
of
Collection
Suit
CIR
v.
Union
Shipping
Corp.,
185
SCRA
547
(1990)
Under
the
circumstances,
the
CIR,
not
having
clearly
signified
his
final
action
on
the
disputed
assessment,
legally
the
period
to
appeal
has
not
commenced
to
run.
Thus,
it
was
only
when
private
respondent
received
the
summons
on
the
civil
suit
for
collection
of
deficiency
income
that
the
period
to
appeal
commenced
to
run.
The
request
for
reinvestigation
and
reconsideration
was
in
effect
considered
denied
by
CIR
when
the
latter
filed
a
civil
suit
for
collection
of
deficiency
income.
At
that
moment,
the
case
is
appealable
to
the
CTA.
6.
Referral
to
Solictor
General
for
Collection
Republic
v.
Lim
Tian
Teng
Sons
&
Co.,
supra
The
Collector
of
Internal
Revenue
is
authorized
to
collect
delinquent
internal
revenue
taxes
either
by
distraint
and
levy
or
by
judicial
action
or
both
simultaneously.
The
only
requisite
before
he
can
collect
the
tax
is
that
he
must
first
assess
the
same
within
the
time
fixed
by
law.
And
in
the
case
of
a
false
or
fraudulent
return
with
intent
to
evade
the
tax
or
of
a
failure
to
file
a
return,
a
proceeding
in
court
for
the
collection
of
such
tax
may
be
begun
without
assessment.
In
fact,
there
was
a
final
and
executory
assessment
when
the
CIR
referred
the
matter
to
the
Solicitor
General
for
collection.
The
taxpayer
shouldve
filed
a
petition
for
review
with
the
CTA
from
that
moment
(Atty
Bello).
Bianca
Mendoza/ALS
3B
2016/Tax
II-Atty.
Bello
40
7.
Issuance
of
Warrant
of
Distraint
and
Levy
Central
Cement
Corporation
v.
CIR,
CTA
Case
No.
4312,
Sept.
1,
1993
TP
is
estopped
from
questioning
the
jurisdiction
of
the
CTA
as
it
never
well,
questioned
it,
and
TP
participated
in
the
trial
for
years.
In
the
case
at
bar
the
WDLS
were
issued
by
the
CIR
knowing
full
well
that
the
deficiency
assessments
were
under
protest.
Even
when
the
issuance
of
the
WDLS
was
objected
to
for
being
in
violation
of
NIRC,
CIR
did
not
lift
said
warrants.
It
is
by
the
CIRs
own
doing
that
the
administrative
remedies
available
to
TP
were
effectively
shut
down
thereby,
leaving
the
TP
with
no
recourse
but
to
seek
relief
from
this
Court.
CIR
v.
Algue,
Inc.,
158
SCRA
9
(1988)
It
is
true
that
as
a
rule
the
warrant
of
distraint
and
levy
is
"proof
of
the
finality
of
the
assessment"
and
renders
hopeless
a
request
for
reconsideration,"
being
"tantamount
to
an
outright
denial
thereof
and
makes
the
said
request
deemed
rejected."
But
there
is
a
special
circumstance
in
the
case
at
bar
that
prevents
application
of
this
accepted
doctrine.
The
proven
fact
is
that
four
days
after
the
private
respondent
received
the
petitioner's
notice
of
assessment,
it
filed
its
letter
of
protest.
This
was
apparently
not
taken
into
account
before
the
warrant
of
distraint
and
levy
was
issued;
indeed,
such
protest
could
not
be
located
in
the
office
of
the
petitioner.
It
was
only
after
Atty.
Guevara
gave
the
BIR
a
copy
of
the
protest
that
it
was,
if
at
all,
considered
by
the
tax
authorities.
During
the
intervening
period,
the
warrant
was
premature
and
could
therefore
not
be
served.
Advertising
Associates,
Inc.
v.
CA,
133
SCRA
765
(1984)
The
reviewable
decision
is
that
contained
in
the
CIRs
letter
and
not
the
WDLs.
No
amount
of
quibbling
or
sophistry
can
blink
the
fact
that
said
letter,
as
its
tenor
shows,
embodies
the
Commissioner's
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.
The
directive
is
in
consonance
with
this
Court's
dictum
that
the
Commissioner
should
always
indicate
to
the
taxpayer
in
clear
and
unequivocal
language
what
constitutes
his
final
determination
of
the
disputed
assessment.
That
procedure
is
demanded
by
the
pressing
need
for
fair
play,
regularity
and
orderliness
in
administrative
action.
D.
Period
to
Appeal/Effect
of
Failure
to
Appeal
Sec.
228,
last
par.,
NIRC
-
If
the
protest
is
denied
in
whole
or
in
part,
or
is
not
acted
upon
within
one
hundred
eighty
(180)
days
from
submission
of
documents,
the
taxpayer
adversely
affected
by
the
decision
or
inaction
may
appeal
to
the
Court
of
Tax
Appeals
within
thirty
(30)
days
from
receipt
of
the
said
decision,
or
from
the
lapse
of
one
hundred
eighty
(180)-day
period;
otherwise,
the
decision
shall
become
final,
executory
and
demandable.
Sec.
11,
Rep.
Act.
No.
1125,
as
amended
by
Rep.
Act.
No.
9282
SEC.
11.
Who
May
Appeal;
Mode
of
Appeal;
Effect
of
Appeal.
-
Any
party
adversely
affected
by
a
decision,
ruling
or
inaction
of
the
Commissioner
of
Internal
Revenue,
the
Commissioner
of
Customs,
the
Secretary
of
Finance,
the
Secretary
of
Trade
and
Industry
or
the
Secretary
of
Agriculture
or
the
Central
Board
of
Assessment
Appeals
or
the
Regional
Trial
Courts
may
file
an
appeal
with
the
CTA
within
thirty
(30)
days
after
the
receipt
of
such
decision
or
ruling
or
after
the
expiration
of
the
period
fixed
by
law
for
action
as
referred
to
in
Section
7(a)(2)
herein.
"Appeal
shall
be
made
by
filing
a
petition
for
review
under
a
procedure
analogous
to
that
provided
for
under
Rule
42
of
the
1997
Rules
of
Civil
Procedure
with
the
CTA
within
thirty
(30)
days
from
the
receipt
of
the
decision
or
ruling
or
in
the
case
of
inaction
as
herein
provided,
from
the
expiration
of
the
period
fixed
by
law
to
act
thereon.
A
Division
of
the
CTA
shall
hear
the
appeal:
Provided,
however,
That
with
respect
to
decisions
or
rulings
of
the
Central
Board
of
Assessment
Bianca
Mendoza/ALS
3B
2016/Tax
II-Atty.
Bello
41
Appeals
and
the
Regional
Trial
Court
in
the
exercise
of
its
appellate
jurisdiction
appeal
shall
be
made
by
filing
a
petition
for
review
under
a
procedure
analogous
to
that
provided
for
under
rule
43
of
the
1997
Rules
of
Civil
Procedure
with
the
CTA,
which
shall
hear
the
case
en
banc.
"All
other
cases
involving
rulings,
orders
or
decisions
filed
with
the
CTA
as
provided
for
in
Section
7
shall
be
raffled
to
its
Divisions.
A
party
adversely
affected
by
a
ruling,
order
or
decision
of
a
Division
of
the
CTA
may
file
a
motion
for
reconsideration
of
new
trial
before
the
same
Division
of
the
CTA
within
fifteens
(15)
days
from
notice
thereof:
Provide,
however,
That
in
criminal
cases,
the
general
rule
applicable
in
regular
Courts
on
matters
of
prosecution
and
appeal
shall
likewise
apply.
"No
appeal
taken
to
the
CTA
from
the
decision
of
the
Commissioner
of
Internal
Revenue
or
the
Commissioner
of
Customs
or
the
Regional
Trial
Court,
provincial,
city
or
municipal
treasurer
or
the
Secretary
of
Finance,
the
Secretary
of
Trade
and
Industry
and
Secretary
of
Agriculture,
as
the
case
may
be
shall
suspend
the
payment,
levy,
distraint,
and/or
sale
of
any
property
of
the
taxpayer
for
the
satisfaction
of
his
tax
liability
as
provided
by
existing
law:
Provided,
however,
That
when
in
the
opinion
of
the
Court
the
collection
by
the
aforementioned
government
agencies
may
jeopardize
the
interest
of
the
Government
and/or
the
taxpayer
the
Court
any
stage
of
the
proceeding
may
suspend
the
said
collection
and
require
the
taxpayer
either
to
deposit
the
amount
claimed
or
to
file
a
surety
bond
for
not
more
than
double
the
amount
with
the
Court.
"In
criminal
and
collection
cases
covered
respectively
by
Section
7(b)
and
(c)
of
this
Act,
the
Government
may
directly
file
the
said
cases
with
the
CTA
covering
amounts
within
its
exclusive
and
original
jurisdiction."
St.
Stephens
Association
v.
Collector
of
Internal
Revenue,
104
Phil.
314
(1958)
This
decision
becomes
final
thirty
days
after
your
receipt
hereof
unless
an
appeal
is
taken
to
the
Court
of
Tax
Appeals
within
the
same
period,
in
accordance
with
the
provision
of
Republic
Act
No.
1125.
From
the
above-quoted
statement
appearing
in
his
letter
of
July
11,
1955,
it
is
evident
that
the
respondent
Collector
himself
considered
said
letter
as
his
final
decision
in
the
case.
Prior
to
his
letter-decision
of
July
11,
1955,
then,
the
Collector
must
have
held
the
matter
under
advisement
and
considered
his
preceding
rulings
as
merely
tentative
in
character,
pending
his
final
determination
and
resolution
of
the
merits
of
the
arguments
of
fact
and
law
submitted
by
petitioners
in
support
of
their
requests
for
the
cancellation
and
withdrawal
of
the
assessment.
Roman
Catholic
Archbishop
of
Cebu
v.
Collector,
4
SCRA
279
(1962)
We
cannot
countenance
the
theory
that
would
make
the
commencement
of
the
statutory
30
day-period
solely
dependent
on
the
will
of
the
TP
and
place
the
latter
in
a
position
to
put
off
indefinitely
and
at
his
convenience
the
finality
of
the
tax
assessment.
To
hold
that
the
taxpayer
has
now
lost
the
right
to
appeal
from
the
ruling
on
the
disputed
assessment
but
must
prosecute
his
appeal
under
section
306
of
the
Tax
Code,
which
requires
a
taxpayer
to
file
a
claim
for
refund
of
the
taxes
paid
as
a
condition
precedent
to
his
right
to
appeal,
would
in
effect
require
of
him
to
go
through
a
useless
and
needless
ceremony
that
would
only
delay
the
disposition
of
the
case,
for
the
CIR
would
certainly
disallowed
the
claim
for
refund
in
the
same
way
as
he
disallowed
the
protest
against
the
assessment.
The
law
should
not
be
interpreted
as
to
result
in
absurdities.
Pantranco
v.
Blaquera,
107
Phil.
975
(1960)
TP
contends
the
period
spent
by
counsel
consulting
with
the
TP
should
be
deducted.
NO
the
30-day
appeal
period
is
jurisdictional
and
non-extendible.
As
to
the
ten-day
period
"for
consultation",
we
discover
no
authority
in
support
thereof.
Basa
v.
Republic,
138
SCRA
34
(1985)