II.

TAX REMEDIES PROPER

A. Tax Remedies1: (In general: administrative and Judicial)

*Exhaustion of administrative remedies is a must if provided for by law. Except:
1. when the question is purely judicial in nature
2. Evident disregard of due process
3. Action of the administrative body is patently illegal
a. Importance – They have been considered a matter of state necessity. The existence of the
government depending on the regular collection of revenue must, as an object of primary
importance, be insured. With this objective in mind, promptness in collection is always desirable, if
not imperative.
b. Classification (Overview)
1. Remedies in favor of the taxpayer: (AJ)
a. Administrative
i. Before payment
1) Petition or request for reconsideration or reinvestigation
2) Entering into a compromise
ii. After payment
1) Filing a claim for tax refund
2) Filing a claim for tax credit
b. Judicial
i. Civil Action
1) Appeal to the CTA
2) Action to contest forfeiture of chattel
3) Action for damages
ii. Criminal Action
1) Filing of criminal complaint against erring BIR officials and
employees

2. Remedies available to the government: (DCCTFC)

a. Distraint of personal property such as goods, chattels, or effects including stocks
and other securities, debts, credits, bank accounts and interest in and rights to
personal property, and levy upon real property and interest in or rights to real
property.
b. Civil – Action for Collection for sum of money.
c. Criminal actions – Prescriptive period for tax evasion cases, five years from the
last assessment. Where there is no assessment made, five (5) years from the date
of violation, if not discovered immediately. If discovery is made later, from the
institution of the case. (See 281 NIRC)
d. Compromise – Note: Criminal cases involving fraud cannot be subject to a
compromise. If the compromise exceeds 1 Million, the approval of the
Commissioner IR is required.

1
Its general concepts - Every tax payer has a right to a remedy for any actual wrong he may have suffered in the collection
of taxes.
 e. Tax Lien – is a legal claim or charge on property, either real or personal,
established by laws as a security in default of the payment of taxes.
f. Forfeiture
g. Civil Penalties – Interests/Surcharge

Distraint is a remedy whereby the collection of tax is enforced on the goods, chattels,
or effects of the taxpayer including personal property of whatever character as well
as stocks and other securities, debts, credits, bank accounts, and interest in and
rights to personal property.

Levy refers to the seizure of real property and interest in or rights to such properties
for the satisfaction of taxes due from the delinquent taxpayer. Levy can be made
before, simultaneously, or after the distraint of personal property.

Actual and Constructive Distraint – the commissioner may, to safeguard

the interest of the Government, may place under constructive distraint the
property of a delinquent taxpayer or any taxpayer who, in his opinion, is:

1. retiring from any business subject to the tax;

2. intending to leave the Philippines or to remove his property therefrom
or to hide or conceal his property;
3. intending to perform any act tending to obstruct the proceedings for
collecting the tax due or which may be due from him.

Constructive Distraint – Here, the owner is merely prohibited from disposing his
personal property.

Requisites for exercise of distraint and levy.

1. The taxpayer must be delinquent in payment;

2. There must be a subsequent demand for its payment;
3. The taxpayer must fail to pay the delinquent tax at the time required;
4. The period within which to assess or collect the tax has not yet prescribed.