COURSE OUTLINE FOR TAXATION 1 AND 2

I. GENERAL PRINCIPLES
A. Taxation and Taxes
1. Define Taxation
2. Different Aspects of phases of taxation
3. Definition of taxes
4. Classification of taxes
5. Taxes versus other imposition
B. Theory Philosophy of Taxation
1. The necessity theory
2. The benefit-protection theory
3. The lifeblood theory
4. Reciprocal duties of support and protection / symbiotic relationship
CASES:
1. Comm v. Pineda 21 SCRA 105
2. Vera v. Fernandez 89 SCRA 199
3. Comm. V. CTA 234 SCRA 348
4. CIR v. Alguo 158 SCRA 9
C. Co-equal Powers
1. Taxation v. Police Power
2. Taxation v. Eminent Domain
D. Nature of the taxing power
1. Inherent
2. Legislative
E. Scope and limitation of the taxing power
1. Scope
2. Limitation
A. INHERENT
1. Public Purpose of taxes
2. Non-delegability of the taxing power

3. Territoriality or the situs of taxation

4. Exemption of the government from taxes
5. International Comity
CASES:
1. Lutz v. Araneta 98 Phil. 148
2. Tio v. VRB 151 SCRA 827
3. Gomez v. Paloma 21 SCRA 827
4. Pascual v. Sec. of Public Works 110 Phil. 331
5. Pepsi-Cola v. Mun. of Tanauan 69 SCRA 460
B. CONSTITUTIONAL
1. Art. III, Sec. 1, 4, 5, 10, 20
2. Art. VI Sec. 24, 27(2), 28(1, 2, 3, 4), 29(2, 3)
3. Art. VII Sec. 5(2)b
4. Art. X Sec. 5
5. Art. XIV Sec. 4(3)
CASES:
1. Pepsi-Cola v. City of Butuan 24 SCRA 79
2. CIR v. CTA 298 SCRA 83
3. Sison Jr. v. Ancheta 130 SCRA 324
4. Tan v. Del Rosario, Jr. 237 SCRA 324
5. Punsalan v. City of Manila 95 SCRA 46
6. Tolentino v. Sec. of Finance 235 SCRA 630
7. Reyes v. Almanzor 196 SCRA 322
8. Abra Valley College, Inc. v. Aquino 162 SCRA 106
9. CTR v. CTA and Manila Golf and Country Club GR No. 47421

F. Purpose of Taxation
1. Primary or revenue
2. Secondary or non-revenue

G. Fundamental principle of a sound tax system

1. Fiscal adequacy
2. Theoretical Justice
3. Administrative Feasibility

H. Power of judicial review in taxation

I. Interpretation and construction of taxation

1. Tax laws
2. Tax Exemption
CASES:
1. Davao Gulf Lumber Corp. v. CIR 293 SCRA 76
2. Lincoln Phil. Co. v. CA 293 SCRA 92

J. Some Doctrines in Taxation

1. Prospectivity of Tax Laws
2. Imprescriptibility of taxes
CASES:
1. Comm. V. Ayala Securities Corp. & CTA L-29485
3. Double Taxation
a. Definition
b. Is double taxation prohibited in the Philippines?
c. Kinds
D. Relief from effects of double taxation
CASES:
1. Pepsi-Cola v. City of Batuan 24 SCRA 79
2. Comm. V. S.C. Johnson & Son 309 SCRA 87
3. People v. Mendaros 97 Phil. 958
4. Power to tax involves the power to destroy
5. Escape from taxation

a. Tax avoidance
b. Tax evasion
6. Doctrine of equitable recoupment
7. Set-off of taxes
CASES:
1. Francia v. IAC 162 SCRA 753
2. Domingo v. Garlitos 8 SCRA 443
3. Caltex Phil. Inc. v. COA 208 SCRA 726, 756
4. Republic v. Mambulao Lumber Co. 6 SCRA 622
8. Taxpayers Suit

II. REMEDIES IN TAXATION

A. Rule on No injunction to restrain tax collection
- Sec. 218 NIRC
B. Remedies of the government
-Assessment, levying
1. Tax lien
Cases:
1. CIR v. NIRC GR No. 74965
2. Republic of the Phil. v. Enrique 168 SCRA 608
2. Compromise
-Abatement
3. Distraint and levy
4. Civil Action
5. Criminal action
Cases:
1. CIR v. Pascor Realty & Dev. Corp. June 1999
2. Republic v. F

20 SCRA 212

3. PUS Tio Vargas v. CUS 97 SCRA 877

6. Forfeiture

7. Suspension of business operations

8. Enforcement of administrative fines

C. Prescriptive Periods
1. Rationale
2. Rules on prescription
3. Prescriptive period for assessment of taxes
4. Prescriptive period for collection of taxes
5. Grounds for suspension of the running of the statute of limitations

D. Taxpayers Remedies
1. Administrative
A. Before payment
- Protest
- Entering into a compromise
B. After payment
CASES:
1. CIR v. Jose Concepcion 22 SCRA 1058
2. Philex Mining Corp. v. CIR GR no. 120324
3. CIR v. CA & CIR GR no. 107434
4. CIR v. Philamlife 244 SCRA 440
2. Judicial
A. Civil action
B. Criminal action

III. TAXATION ADMINISTRATION AND ENFORCEMENT

A. Sources of tax laws
B. Agencies involved in tax administration
C. Powers and duties of the BIR
D. Principles governing tax assessments

Case:
1. CIR v. CA GR no. 115712
E. Means employed in the assessment of taxes

IV. THE COURT OF TAX APPEALS

A. Salient Features
B. Power of the CTA
C. Jurisdiction of the CTA
D. Whose decisions are appealable?
E. What decisions are appealable?
F. Thirty-day prescriptive period of appeal
G. Appeal from decisions of the CTA
CASES:
1. CIR v. union shipping corp. 185 SCRA 547
2. Surigao electric co. v. CTA 57 SCRA 523

V. INCOME TAXATION
A. Introduction
1. National Taxation
a. Two