Equitable Recoupment
⁃ a tax claim or refund
⁃ may be used to settle ta liabilities
⁃ both taxes should arise on the
same transaction
⁃ not observe in our jurisdiction
Compensation (set-off)
⁃ does not take place in tax liability
⁃ In civil law this takes place when
both persons in their own right are
creditor and debtor to each other
⁃ but in taxation it is based on law
and not on contracts
⁃ the government and taxpayer are
not creditor and debtor to each
other
⁃ EXCEPTION:
⁃ Domingo vs Garnitos
⁃ when there is
ACTUAL
COMPROMISE
Taxpayer Suits
⁃ involves only direct and illegal
disbursement of public funds
derived from taxation
⁃ check bar question how to
strengthen your claim aside from
the fact that public funds are
illegally disbursed
Tax Amnesty
⁃ retroacts to past tax periods
Tax exemption
⁃ prospective
⁃ only civil liability
⁃ must be with concurrence of the
majority of the members of the
congress
IRRs
⁃ apply prospectively not
retroactively
⁃ must be in harmony with the
provisions of the law
⁃ construed strictly against the
government and in favor of the
taxpayer
Limitations
⁃ General or indirect
⁃ applies to all three powers
⁃ Specific or direct
⁃ applies only to taxation
power
⁃ no imprisonment for
nonpayment of poll tax or
community tax
⁃ but there is imprisonment
for nonpayment of income
tax
⁃ must be progressive
⁃ Section 4, Article 14 of the
Constitution
Systems of taxation
⁃ regressive
⁃ if the law adopts a
regressive system it does
not make it unconstitutional
because of the phrase “shall
involve” in the Constitution,
meaning it does not prohibit
adoption
⁃ progressive
⁃ proportional
PRELIM - JANUARY 7