GOVERNMENT REMEDIES:

ADMINISTRATIVE/SUMMARY

TAX LIEN
 Tax Lien
NIRC. 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.
 Tax Lien
NIRC. 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.
 Tax Lien
NIRC. 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.
 Tax Lien
NIRC 21. Sources of Revenue. - The following taxes, fees and charges are
deemed to be national internal revenue taxes:

(a) Income tax;

(b) Estate and donor's taxes;

(c) Value-added tax;

(d) Other percentage taxes;

(e) Excise taxes;

(f) Documentary stamp taxes; and

(g) Such other taxes as are or hereafter may be imposed and collected by the
Bureau of Internal Revenue.
 Tax Lien
NIRC. 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.
 Tax Lien
NIRC. 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.
 Tax Lien
NIRC. 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.
 Tax Lien
NIRC. 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.
 Tax Lien
NIRC. 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.
 Tax Lien
NIRC. 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.
 Tax Lien
NIRC. 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.
 Tax Lien
NIRC. 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.
 Tax Lien
Summary of NIRC 219.

Lien on all property of taxpayer arises when there is

1. Failure to pay any internal revenue tax

2. Demand by the BIR
3. Notice to any mortgagee, purchaser or judgment creditor (for
validity of lien against these persons)

Lien includes interest, penalties, and costs, and retroacts to the

date of assessment.
 Cases on tax lien
RP v Enriquez

In accordance with a judgment in favor of Genstar Corporation,

Deputy Sheriff Enriquez levied on execution and subsequently
auctioned 2 barges which were the subject of a warrant of distraint
and notice of seizure by the CIR.

Held: The claim of the government predicated on a tax lien is

superior to the claim of a private litigant predicated on a
judgment. The tax lien attaches not only from the service of the
warrant of distraint of personal property but from the time the tax
became due and payable.
 Cases on tax lien
CIR v. NLRC

For failure to pay deficiency taxes, BIR seized properties of Maritime Company
of the Philippines under warrants of distraint of personal property and levy of real
property. Among the properties were 6 barges.

Deputy Sheriff of Manila sold 4 of the barges in a public auction to satisfy a

judgment by the NLRC in favor of employees of the company.

Issue: WON taxes are preferred claims only with respect to the properties on
which they are due (NO.)

Taxes are preferred claims on ALL properties of the taxpayer.

 Cases on tax lien
HSBC v. Rafferty

Taxpayer Pujalte & Co assigned 2,000 railroad ties to HSBC to pay

a loan obtained by the company from the bank. HSBC had no
notice that Pujalte had deficiency taxes or of any lien on the
railroad ties.

BIR wanted to enforce its lien on the railroad ties.

Held: BIR cannot enforce the lien. HSBC had no notice of the lien.
 GOVERNMENT REMEDIES:
ADMINISTRATIVE/SUMMARY

INJUNCTION
 No injunction
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.

Exception:
When the all of the following conditions concur:
(1) It is an appeal to the CTA from a decision of the CIR, or Commissioner of
Customs or the RTC, provincial, city or municipal treasurer or the Secretary of
Finance, the case may be, AND
(2) In the opinion of the Court of Tax Appeals, the collection may jeopardize the
interest of the Government and/or the taxpayer. (Sec. 11, R.A. 1125 as amended
by R.A. 9282)

Requisite before availing of injunction

(1) Taxpayer has to deposit the amount claimed; OR
(2) File an injunction bond with the Court for not more than double the amount
(R.A. 1125/9282)
 No injunction
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.

Exception:
When the all of the following conditions concur:
(1) It is an appeal to the CTA from a decision of the CIR, or Commissioner of
Customs or the RTC, provincial, city or municipal treasurer or the Secretary of
Finance, the case may be, AND
(2) In the opinion of the Court of Tax Appeals, the collection may jeopardize the
interest of the Government and/or the taxpayer. (Sec. 11, R.A. 1125 as amended
by R.A. 9282)

Requisite before availing of injunction

(1) Taxpayer has to deposit the amount claimed; OR
(2) File an injunction bond with the Court for not more than double the amount
(R.A. 1125/9282)
 No injunction
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.

Exception:
When the all of the following conditions concur:
(1) It is an appeal to the CTA from a decision of the CIR, or Commissioner of
Customs or the RTC, provincial, city or municipal treasurer or the Secretary of
Finance, the case may be, AND
(2) In the opinion of the Court of Tax Appeals, the collection may jeopardize the
interest of the Government and/or the taxpayer. (Sec. 11, R.A. 1125 as amended
by R.A. 9282)

Requisite before availing of injunction

(1) Taxpayer has to deposit the amount claimed; OR
(2) File an injunction bond with the Court for not more than double the amount
(R.A. 1125/9282)
 No injunction
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.

Exception:
When the all of the following conditions concur:
(1) It is an appeal to the CTA from a decision of the CIR, or Commissioner of
Customs or the RTC, provincial, city or municipal treasurer or the Secretary of
Finance, the case may be, AND
(2) In the opinion of the Court of Tax Appeals, the collection may jeopardize the
interest of the Government and/or the taxpayer. (Sec. 11, R.A. 1125 as amended
by R.A. 9282)

Requisite before availing of injunction

(1) Taxpayer has to deposit the amount claimed; OR
(2) File an injunction bond with the Court for not more than double the amount
(R.A. 1125/9282)
 No injunction
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.

Exception:
When the all of the following conditions concur:
(1) It is an appeal to the CTA from a decision of the CIR, or Commissioner of
Customs or the RTC, provincial, city or municipal treasurer or the Secretary of
Finance, the case may be, AND
(2) In the opinion of the Court of Tax Appeals, the collection may jeopardize the
interest of the Government and/or the taxpayer. (Sec. 11, R.A. 1125 as amended
by R.A. 9282)

Requisite before availing of injunction

(1) Taxpayer has to deposit the amount claimed; OR
(2) File an injunction bond with the Court for not more than double the amount
(R.A. 1125/9282)
 No injunction
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.

Exception:
When the all of the following conditions concur:
(1) It is an appeal to the CTA from a decision of the CIR, or Commissioner of
Customs or the RTC, provincial, city or municipal treasurer or the Secretary of
Finance, the case may be, AND
(2) In the opinion of the Court of Tax Appeals, the collection may jeopardize the
interest of the Government and/or the taxpayer. (Sec. 11, R.A. 1125 as amended
by R.A. 9282)

Requisite before availing of injunction

(1) Taxpayer has to deposit the amount claimed; OR
(2) File an injunction bond with the Court for not more than double the amount
(R.A. 1125/9282)
 Injunction

Summary

General rule: no court can issue an injunction

Exception:
1. Appeal to the CTA
2. In the opinion of the CTA, collection will jeopardize interests of
the taxpayer and/or the Government
3. Taxpayer must deposit amount or file injunction bond
 Case on Injunction
Northern Lines Inc v CTA, CoC, CIR

Commissioner of Customs assessed and demanded compensating tax on 2

vessels of Northern Lines. Upon appeal by NL, CIR sustained the CoC. NL filed
with the CTA a petition for review with preliminary injunction. Injunction was
granted by the CTA. CTA ruled against NL.

NL contends that renovation of its delinquent accounts with the Reparations

Commission (owner and name under which the vessels were registered) made
the judgment of the CTA moot and academic.

Held: The contention deserves scant consideration. Taxes are the lifeblood of the
government; collection should not be enjoined except upon a clear showing of a
right to an exemption.