21.

First statement: The extra-judicial settlement of the taxpayer's

criminal liability and the amount of the suggested compromise
penalty shall conform to the schedule of compromise penalties
provided under Revenue Memorandum Order No. 19-2007 or as
revised.
Second statement: 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.
a. True, True c. True, False
b. False, False d. False, True
Answer: A
22. The income tax return for the calendar year 2003 was due for filing
on April 15, 2004. The tax due was P100,000. The taxpayer
voluntarily filed his tax return without notice from the BIR only on
June 30, 2004.
Question 1 -How much \Vas the surcharge?
a. P 50,000.00 c. P 20,000.00
b. P 25,000.00 d. None
Question 2 - How much vvas the interest on delinquency?
a. P 5,194.07 c. P 4,155.24
b. P 4,166.66 d. None.
Question 3- How much was the total amount due?
a. P 130,194.07 c. P 129,155.24
b. P129,166.66 d. None of the choices
Question 1: Answer: B
Question 2: Answer: C
Question 3: Answer: C
Reference: Section 5.1, Revenue Regulations No. 12-99
Tax per return
Add: Surcharge for late filing and
payment of tax (25'/o x P1 00,000) P 25,000.00
Interest on delinquency
(April 15 to June 30, 2004) 4 155.24
Total amount due
Computation of interest
April 15 to June 15 (2 months)
(PlOO,OOO X 20% X 2/ 12)
June 15 to June 30 (15 days)
(PlOO,OOO X 20% X 15/365)
Total
P100,000.00
29 155.24
Pl_29__J_55.::!4
p 3,333.33
821.91
p 4.155.24
305
Chapter 21: Additions to Tax
23. The taxpayer's 2003 percentage tax return is required to be filed
through the authorized agent bank under the jurisdiction of ROO
East Makati. Without prior authorization from the Commissioner,
the taxpayer files the return and pays the tax through an authorized
agent bank under the jurisdiction of ROO Oavao City on April 15,
2004. The tax due and paid per return is P100,000.
Question 1 -How much is the surcharge?
a. P50,000.00 c. P 20,000.00
b. P25,000.00 d. None
Question 2 - How much is the interest on delinquency/ deficiency?
a. P20,000.00 c. P6,666.67
b. PlO,OOO.OO d. None
Question 3- How much is the amount still due?
a. P145,000.00 c. P 31,666.67
b. P125,000.00 d. P 25,000.00
Question 1: Answer: B
Question 2: Answer: D
Question 3: Answer: D
Reference: Section 5.2, Revenue Regulations No. 12-99
Tax per return
Add: Surcharge for filing with a wrong venue
(PlOO,OOO X 25%) .
Total
Less: Amount already paid
Amount still due
p
p
100,000
25.000
125,000
100 000
24. The taxpayer did not file his income tax return for the calendar year
1997 which was due for filing on April 15, 1998. He was notified by
the BIR of his failure to file the tax return, for which reason, he filed
his tax return and paid the tax, only after the said notice, on
306
June 30, 1999. The tax due per return was P100,000.
How much is the total amount due excluding suggested compromise
for late filing and late payment of the tax?
a. P199, 155.24 c. P149, 155.24
b. P174, 155.24 d. None of the choices
-------------
Chapter 21: Additions to Tax
Answer: B
Reference: Section 5.3, Revenue Regulations No. 12-99
Income tax due per return
Add: Surcharge for willful neglect to file
the return and late payment of
tax (Pl 00.000 X 50'%)
p 100,000.00
p 50,000.00
Interest in delinquency 24 155.24 74 155.24
Total amount due
Computation of interest
April 15, 1998 to April 15, 1999 ( 1 year)
(P100,000 X 20%,)
April 15, 1999 to ,June 15, 1999 (2 months)
(PlOO,OOO X 20/c, X 2/ 12)
,June 15, 1999toJune30, 1999(15days)
(PlOO,OOO X 20'/r, X 15/365)
Total
p 20.000.00
3,333.33
821.91
25. (Adapted) Taxpayer filed on time his income ta.x return for calendar
year 1997 and paid PlOO,OOO on April 15, 1998. Upon pre-audit of
his return, it was disclosed that he erroneously computed the tax
due. The correct amount of tax due was Pl20,000. The taxpayer
was assessed for deficiency income tax in a letter of demand and
assessment notice issued on June 30, 1999.
Question 1 -How much was the surcharge?
a. P 50,000.00 c. P 20,000.00
b. P 25,000 d. None.
Question 2 - How much was the interest on deficiency?
a. P 4,831.05 c. P 24,155.25
b. p 4,833.33 d. p 28,986.30
Question 3 - How much vvas the total amount still due?
a. P 124,831.05 c. P 24,833.33
b. P104,831.05 d. P 24,831.05
307
Chapter 21: Additions to Tax
Question 1: Answer: D
Question 2: Answer: A
Question 3: Answer: D
Reference: Section 5.4, Revenue Regulations No. 12-99
Tax due per assessment
Tax per return
Deficiency income tax
Add: Interest on deficiency
(Aprill5, 1998 to ,June 30, 1999)
Amount still due
Computation o( interest
April 15, 1998 to April 15, 1999 (1 year)
(P20,000 X 20%)
April15, 1999 to June 15, 1999 (2 months)
(P20,000 X 20% X 2/ 12)
,June 15, 1999 to June 30, 1999 (15 days)
(P20,000 X 20% X 15/365)
Total
p 120,000.00
100 000.00
p 20,000.00
4,831.05
p 4,000.00
666.67
164.38
26. (Adapted) ABC Corporation filed its income tax return for calendar
year 1997 and paid its income tax on time shown thereunder,
amounting to PlOO,OOO. Said taxpayer was investigated.
308
Upon verification of its accounting records, it was disclosed that its
deduction from gross income of representation expenses in the
amount of P200,000 did not meet all the statutory requisites for
deductibility. The corporation was duly notified of the said
discrepancy through a Preliminary Assessment Notice. Based on the
35'Yo income tax rate on corporations applicable in the year 1997,
the income tax due after investigation amounted to P170,000 after
deduction of income tax paid per return filed, the basic deficiency
income tax amounted to P70,000, excluding penalties. Failing to
protest on time against the preliminary assessment notice, a formal
letter of demand and assessment notice was issued on May 31, 1999,
requiring payment of the assessment not later than June 30, 1999.
Question 1 - How much was the surcharge?
a. P 50,000.00 c. P 17,500.00
b. P 25,000.00 d. None
Question 2- How much was the interest on deficiency?
a. P 24,155.25 c. P 16,908.67
b. P 16,916.66 d. None
Question 3- How much was the total amount still due?
a. P 124,155.25 c. P 86,908.67
b. P116,916.66 d. P 70,000.00
-------------------------~-

Chapter 21: Additions to Tax

Question 1: Answer: D
Question 2: Answer: C
Question 3: Answer: C
Reference: Section 5.4 Revenue Re ulations No. 12-99
Tax due per investigation
Tax per return
Deficiency income tax
Add: Interest on deficiency
(April 15, 1998 to .June 30, 1999)
Amount still due
Computation of in I Prest
April 15, 1998 to April 15, 1999 ( 1 year)
(P70,000 X 20'Yr,)
April15, 1999 to .June 15, 1999 (2 months)
(P70,000 X 20'Yo X 2/ 12)
,June 15, 1999 to June 30, 1999 ( 15 days)
(P70,000 X 20'Yr, X 15/365)
Total
p 170,000.00
100 000.00
p 70,000.00
16 908.67
p 86,908.67 ..
p 14,000.00
2,333.33
575.34
27. (Adapted) XYZ Corporation filed its income tax return for calendar
year 1997 with a net taxable income of P500,000. At the applicable
income tax rate of 35% for the year 1997, its income tax amounted to
Pl75,000. However, upon investigation, it was disclosed that its
income tax return w'as false or fraudulent because it did not report a
taxable income amounting to another P500,000. On its net income of
P1,000,000, per investigation, the income tax due is P350,000.
Deducting its payment per return filed, tbe deficiency, excluding
penalties, amounted to P175,000. [twas duly informed of this
finding through the Preliminary Assessment Notice. Failing to protest
on time against the preliminary assessment notice, a formal letter of
demand and assessment notice was issued on May 31, 1999 calling
for payment of the deficiency income tax on or before June 30, 1999.
Question 1 - How much \vas the surcharge?
a. P 175,000.00 c. P 43,750.00
b. P 87,500.00 d. None
Question 2 - How much was the interest on deficiency?
a. P 84,543.38 c. P 42,271.69
b. P 42,291.66 d. None
Question 3- How much was the total amount due?
a. P304, 771.69 c. P261 ,041.66
b. P262,500.00 d. P261,021.69

-_j
--------------
Chapter 21: Additions to Tax
Question 1: Answer: B
Question 2: Answer: C
Question 3: Answer: A
Reference: Section 5.4, Revenue Regulations No. 12-99
Deficiency income tax P175,000.00
Add: Surcharge for filing false or
fraudulent return (P175,000 X 50/c,) 87,500.00
Interest on deficiency
(April 15, 1998 to June 30, 1999) 42,271.69 129,771.69
Total amount due
Computation of interest
April15, 1998 to April 15, 1999 (1 year)
(P1 75,000 X 20%)
April16, 1999 to June 15, 1999 (2 months)
(P175,000 X 20% X 2/ 12)
June 15, 1999 to June 30, 1999 ( 15 days)
(P175,000 X 20% X 15/365)
Total
p 35,000.00
5,833.33
1 438.36
P_4:_?.271._62
28. (Adapted) Using the same data in the preceding number, assume
that the calendar year 1997 deficiency income tax assessment
against XYZ Corporation was not paid by June 30, 1999, the deadline
for payment of the assessment and assume further that this
assessment had already become final and collectible. The corporation
paid its tax assessment only by July 31, 1999.
310
Question 1 - How much was the surcharge?
a. P 152,385.85 c. P 60,954.34
b. P 76,192.92 d. None
Question 2- How much was the interest on deficiency?
a. P 5,079.53 c. P 5,000.00
b. P 5,009.95 d. None.
Question 3- How much was the total amount due excluding
suggested compromise penalty for late payment?
a. P462,237.07 c. P385,974.56
b. P386,044.14 d. P380,964.61
Chapter 21: Additions to Tax
Question 1: Answer: B
Question 2: Answer: A
Question 3: Answer: B
Reference: Section 5.5, Revenue Regulations No. 12-99
Total amount due P304,771.69
Add: Surcharge for late filing
(304,771.69 X 25%) P76,192.92
Interest on delinquency
(June 30; 1999 to July 31, 1999)
(304,771.69 X 20% X 1/12) 5 079.53 81,272.45
Total amount due P386 044.14
29. (Adapted) DEF Corporation due to financial incapacity, requested
that it be allowed to pay its income tax liability per return for
calendar year 1998, in the amount of Pl,OOO,OOO in four (4) monthly
installments, starting April 15, 1999. Its request had been duly
approved pursuant to Sec. 53 of the Tax Code.
Question 1 -How much was the amount due on April 15, 1999?
a. P262,500.00 c. P254, 166.67
b. P258,333.33 d. P250,000.00
Question 2- How much was the amount due on May 15, 1999?
a. P262,500.00 c. P254, 166.67
b. P258,333.33 d. P250,000.00
Question 3- How much was the amount due on June 15, 1999?
a. P2625,00.00 c. P254, 166.67
b. P258,333.33 d. P250,000.00
Question 4- How much was the amount due on April 15, 1999?
a. P262,500.00 c. P254, 166.67
b. P258,333.33 d. P250,000.00
311
Chapter 21: .Additions to Tax
312