1.

The Commissioner of Internal Revenue can inquire into the bank deposits of a taxpayer but
only to the extent provided by the Tax Code. His authority is granted only in the instances of
determining the gross estate of a decedent, substantiating the taxpayer’s claim of financial
incapacity to pay tax in an application for tax compromise and when information is requested by
a foreign tax authority pursuant to an international agreement entered into by the Philippines. It
doesn’t necessarily conflict with Republic Act 1405 or the Secrecy of Bank Deposits Law since
this power of the CIR is bestowed by a law (Tax Code) and it also does have its exceptions. For
example, in cases of financial incapacity, inquiry can proceed only if the taxpayer waives his
privilege under the Bank Deposit Secrecy Act.
2. The BIR is authorized to issue a warrant of garnishment against the bank account of a
taxpayer despite the pendency of his protest against the assessment with the BIR or appeal
with the Court of Tax Appeals. Garnishment is one of the remedies of the government and is a
legal procedure by which a creditor can collect what a debtor owes by reaching the debtor’s
property when it is in the hands of someone other than the debtor. It is not stated in the National
Internal Revenue Code that before the BIR can begin the collection procedures of the tax
assessed, the ruling on the protest must be done first. This is also anchored on the lifeblood
doctrine which states that prompt and certain availability of taxes are an imperious need.
3. a. Delinquent accounts may be compromised. The delinquent account or disputed
assessment is one resulting from a jeopardy assessment. Delinquent accounts with duly
approved schedule of installment payments cannot be compromised.
b. Cases under administrative protest, after issuance of the final assessment notice to the
taxpayer, which are still pending in the Revenue District Offices, Legal Service, Large Taxpayer
Service, Collection Service, Enforcement Service, and other offices in the National Office may
be compromised.
c. Criminal tax fraud cases confirmed as such by the CIR or his duly authorized representative
cannot be compromised.
d. Criminal violations already filed in court cannot be compromised.
e. Cases where Final reports of reinvestigation or reconsideration have been issued resulting to
reduction in the original assessment and the taxpayer is agreeable to such decision by signing
the required agreement form for the purpose, cannot be compromised.
4. The CIR may compromise the payment of any internal revenue tax, when a reasonable doubt
as to the validity of the claim against the taxpayer exists (Doubtful Validity) and the financial
position of the taxpayer demonstrates a clear inability to pay the assessed tax (Financial
Incapacity). The CIR is allowed to enter into a compromise only if the basic tax involved does
not exceed P1M and the settlement offered is not less than the prescribed percentages. For
cause of financial incapacity, a minimum compromise rate equivalent to 10% of the basic
assessed tax and for other cases, a minimum compromise rate equivalent to 40% of the basic
assessed tax.
5. The Commissioner may abate or cancel tax liability when the tax or any portion thereof
appears to be unjustly or excessively assessed and the administration and collection costs
involved do not justify the collection of the amount due.
6. An internal tax revenue is considered delinquent when self-assessed tax per return filed by
the taxpayer on the prescribed date was not paid at all or only partially paid or when deficiency
tax assessed by the BIR becomes final and executory and the taxpayer has not paid it within the
period given in the notice of assessment.
7. A taxpayer should file in writing with the Commissioner a claim for credit or refund within two
years after the payment of the tax or penalty.
8. A Commissioner can grant a refund or tax credit without a written claim in the cases when on
the face of the return upon which payment was made, such payment appears clearly to have
erroneously paid - the CIR may refund or credit the tax even without a written claim, or a return
filed showing an overpayment shall be considered as a written claim for credit or refund.

Multiple Choice
1. A
2. B
3. D
4. B
5. A
6. A
7. B
8. B
9. A
10. B
11. D
12. C