TAXATION REMEDIES

TAXATIONLAW2
Saturday
TAXATION REMEDIES OF THE GOVERNMENT
December 12
The remedies of the Government

TAXATION REMEDIES has been
allowed, in every age and country, for
the collection by the government of its
revenues. They have been considered a
matter of State necessity.The existence
of the government depending on regular
collection must, as an object of primary
importance, be insured. With this
objective in mind, promptness in
collection is always desirable, if not
imperative.
* Justice Japar Dimaampao, Tax Principles and Remedies
NEWS
December12,Saturday
WHERE IT STARTS
-ASSESSMENT
CONCEPT OF
ASSESSMENT
Assess means to impose
a tax; to charge with a
tax; to declare a tax to
be payable; to apportion
a tax to be paid or
contributed, to fix a rate;
to fix or settle a sum to
be paid by way of tax; to
set, fix or charge a
certain sum to each
What is it?
An assessment is the
notice to the effect that
the amount therein
stated is due from a
taxpayer as a tax witha
demand for payment of
thesamewithinastated
periodoftime.
CIRv.CTA,27SCRA1159
For its validity, an assessment

must
comply
with
the
following requisites:
(1) The taxpayer shall be
informed in writing of the
law and the facts on which
the assessment is made
[Sec. 228, NIRC]
(2) An assessment contains
not only a computation of
tax liabilities, but also a
demand for payment within
a prescribed period [CIR v.
PASCOR]
(3) An assessment must be
served on and received by
the taxpayer [CIR v.
PASCOR]
Assessment precedes collection except

when the unpaid tax is a tax due per
return as in the case of a self-assessed
income tax under the pay-as-you-file
system in which case collection may be
instituted without need od assessment
pursuant to Section 56 of the NIRC.
NEWS
December12,Saturday
Section
56.
Payment
and
Assessment of Income Tax for
Individuals and Corporations
(A) Payment of Tax(1) In General.- The

total amount of tax
imposed by this Title
shall be paid by the
person subject thereto
at the time the return
is filed.xxx
(2)
Installment
payment- When the tax
due is in excess of Two
Thousand
Pesos
(P2,000.00),
the
When are
made?
installments
1.First installment shall be paid at the time

the time return in filed
2.Second installment shall be on or before
July 15 following the close of the calendar
year.
If any installment is not paid on or
before the date fized for its payment, the
whole amount becoms due and payable
with delinquency penalties.
Who has the burden of proof in preassessment proceedings?

The burden of proof is on the taxpayer for there is
a presumption of correctness on the part of the
CIR. Otherwise, the finding of the CIR will be
conclusive and the CIR will assess the taxpayer.
If the taxpayer does not controvert, such finding
is conclusive, even if the CIR is wrong .
NEWS
December12,Saturday
What is a Letter of
Authority (LA)?
It
is
an
official
document
that
empowers a Revenue
Officer
(RO)
to
examine
and
scrutinize a taxpayers
books of accounts and
other
accounting
records, in order to
determine
the
taxpayers
correct
How
is
conducted?
Assessment
1.Issuance of a letter of authority

2. Audit stage
3. Issuance of notice of informal conference
4. Informal conference
5. Issuance
notice
of
preliminary
assessment
6. Issuance of formal letter of demand and

assessment notice
When must an LA be served?

Itmustbeservedtothetaxpayerwithin30daysfrom
its date of issuance; otherwise, it shall become null
and void. The taxpayer shall then have the right to
refuse the service of this LA, unless the LA is
revalidated.
NEWS
December12,Saturday
What are the cases which

need not be covered by a
valid LA?
1. Cases involving
civil or criminal tax
fraud which fall under
the jurisdiction of the
tax fraud division of
the
Enforcement
Services; and
2.
Policy
cases
under audit by the
Special Teams in the
National Office (RMO
How
is
conducted?
Assessment

2. Audit stage
5. Issuance
notice
of
preliminary
assessment

assessment notice
How is LA revalidated? How often can

itberevalidated?
Revalidated
through
the
issuance of a new LA. It can be
revalidated only once, if issued by
the Regional Director; twice, if
issued by the CIR. The suspended
LA(s) must be attached to the
new issued LA. (RMO 38-88)
NEWS
December12,Saturday
How many times can a taxpayer be

subjected
to
examination
and
inspection for the same taxable year?
General Rule: Only once per taxable year.
Exceptions:
1. When the CIR determines that Fraud,
irregularities, or mistakes were committed by
the taxpayer;
2. When the taxpayer himself requests for the Reinvestigation or re-examination of his books of
accounts and it was granted by the
commissioner;
3. When there is a need to verify the taxpayers
Compliance with withholding and other internal
revenue taxes as prescribed in a Revenue
Memorandum
Order
issued
by
the
Commissioner;
4. When the taxpayers Capital gains tax liabilities
must be verified; and
5. When the Commissioner chooses to exercise his
power to obtain information relative to the
examination of other taxpayers (Secs. 5 and 235,
NIRC)
How
is
conducted?
Assessment

2. Audit stage
5. Issuance
notice
of
preliminary
assessment

assessment notice
Within what period should a RO

conduct an audit?
A RO is allowed only 120 days
to conduct the audit and submit
the
required
report
of
investigation from the date of
receipt of a LA by the taxpayer. If
the RO is unable to submit his
final report of investigation within
NEWS
December12,Saturday
Within how many days must the

taxpayer respond to the NIC?
The taxpayer have 15 days from the date of
hisreceipttoexplainhisside.
What is the effect if taxpayer fails to

respondtotheNIC?
If the taxpayer fails to respond within
15 days from date of receipt of the NIC, he
shall be considered in default, in which case,
the Revenue District Officer or the Chief of
the Special Investigation Division of the
Revenue Regional Office, or the Chief of
Division in the National Office, as the case
may be, shall endorse the case with the least
possible delay to the Assessment Division of
the Revenue Regional Office or to the CIR or
his duly authorized representative, as the
case may be, for appropriate review and
issuance of a deficiency tax assessment, if
warranted. (Sec 3.1.1, RR 12-99)
How
is
conducted?
Assessment

2. Audit stage
3. Issuance
conference
of
notice
of
informal
5. Issuance
notice
of
preliminary
assessment

assessment
What
is notice
a Notice for Informal
Conference(NIC)?
It is a written notice informing a taxpayer that the

findings of the audit conducted on his books of accounts
and accounting records indicate that additional taxes or
deficiency assessments have to be paid. If, after the
culminationofanaudit,aROrecommendstheimposition
of deficiency assessments, this is communicated by the
Bureau to the taxpayer concerned during an informal
conferencecalledforthispurpose.
NEWS
December12,Saturday
What matters are taken up during

informal conference?
1. Discussion on the merits
of the assessment
2. Attempt of the taxpayer to
convince the examiner to
conduct a reinvestigation
and/or re-examination
3. Evaluate if submission of
the waiver of the statute
of limitations is necessary
because evaluation may
extend beyond 3 years
4. Taxpayer to advise the
examiner if position paper
will be submitted
How
is
conducted?
Assessment

2. Audit stage
5. Issuance
notice
of
preliminary
assessment

assessment notice
What is the purpose of Informal

Conference(IC)?
It is to afford the taxpayer the opportunity to
presenthiscase.
NEWS
December12,Saturday
is
What are the requirements of How
conducted?
a valid PAN?
1. In writing; and
2. Should inform the taxpayer of the
law and the facts on which the
assessment is made (Sec. 228,
NIRC)
Note: This is to give the taxpayer the opportunity to
refute the findings of the examiner and give a
more accurate and detailed explanation
regarding the assessments. The absence of any
of the requirements shall render the assessment
void.
Within what period must the

taxpayer respond to PAN?
If the taxpayer disagrees with
the findings stated in the PAN, he
has 15 days from receipt of the PAN,
to file a written reply contesting the
proposed assessment. Failure to
respond within 15 days will render
taxpayer in default and assessment
notice will be issued to him (RR 12-
Assessment

2. Audit stage
5. Issuance of preliminary assessment
notice
assessment notice
What is a PreAssessment Notice

(PAN)?
It is a communication issued by the
Regional Assessment Division, or any other
concerned BIR Office, informing a taxpayer
whohasbeenauditedofthefindingsoftheRO,
followingthereviewofthesefindings.
NEWS
December12,Saturday
Who issues the FAN?

It shall be issued by the Commissioner
orhisdulyauthorizedrepresentative.
How
is
conducted?
Assessment

2. Audit stage
In what form shall the

FAN be and what should
it contain?
1. Inwriting;and
2. Shall state the facts, the law, rules
and regulations, or jurisprudence on
which the assessment is based,
otherwise, the FAN shall be void.
(Sec. 228, NIRC; Sec. 3.1.4 RR 12
99)

5. Issuance
notice
of
preliminary
assessment
6. Issuance of formal letter of demand

and assessment notice
What is a Notice of Assessment/Formal

Letter of Demand (FAN)?
It is a declaration of deficiency taxes
issued to a taxpayer who fails to respond to a
PAN within the prescribed period of time, or
whose reply to the PAN was found to be
withoutmerit.
NEWS
December12,Saturday
CIR V. ATLAS CONSOLIDATED

MINING CORPORATION
HELD: Assessments are

prima facie presumed
correct and made in good
faith. Contrary to the
theory of ACMDC, it is
the taxpayer and not BIR
who has the duty of
proving otherwise. It is
an elementary rule in the
absence of proof of any
irregularities
in
the
performance of official
duties, an assessment
will not be disturbed.
Verily, to present proof of
When is an assessment
deemed made?
Assessment is deemed made only
when the collector of internal revenue
releases, mails, or sends such notice to
the taxpayer. A revenue officers Affidavit
merely contained a computation of
respondents tax liability. It did not state a
demand or a period for payment. Worse, it
was addressed to the justice secretary,
not to the taxpayers.
Meaning of Best Evidance

The best evidance envisaged in Section 16 of
the 1977 NIRC (now Sec. 6 of present NIRC)
includes the corporate and accounting records of
the taxpayer who is the subject of the
assessment process, the accounting records of
other taxpayers in the same line of business,
inlcuding their gross profit and net profit sales.
NEWS
December12,Saturday
Best evidence obtainable Are taxes self-assessing?

General Rule: Taxes are generally self-assessing
[Sec 6(B), NIRC]
and do not require the issuance of an assessment
The CIR shall assess the
proper tax on the best
evidence obtainable when:
(a) the taxpayer fails to
submit the required returns,
statements
reports
and
other documents;
(b) there is a reason to
believe that any such report
is
false,
incomplete
or
erroneous.
However
the
best
evidence obtainable does not
include mere photocopies of
records/documents. Original
records must be used rather
notice in order to establish the tax liability of a

taxpayer.
Exceptions:
1.
2.
3.
4.
5.
Improperly Accumulated Earnings Tax (Sec. 29,

NIRC)
When the taxable period of a taxpayer is
terminated (Sec. 6 [D], NIRC)
In case of deficiency tax liability arising from a
tax audit conducted by the BIR (Sec. 56 [B],
NIRC)
Tax lien (Sec. 219, NIRC)
Dissolving corporation (Sec. 52 [c], NIRC)
ASSESSMENT
BASED
ESTIMATE: 50% Rule
ON
If there is showing that expenses have been incurred but

the exact amount thereof cannot be ascertained due to
absence of documentary evidence, it is the duty of the
BIR to make an estimate of deduction that may be
allowable in computing the taxpayers taxable income
bearing heavily against the taxpayer whose inexactitude is
of his own making. That disallowance of 50% of the
taxpayers claimed deduction is valid.
NEWS
December12,Saturday
WHAT
ARE
REMEDIES
OF
GOVERNMENT?
THE What is distraint?

THE It is a remedy whereby the collection of
1.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 (Sec. 205)
2.Civil or criminal action
(Sec. 205)
3.Compromise (Sec. 204)
the tax is enforced on the goods,

chattels, or effects of the taxpayer
including other personal property of
whatever character as well as stocks and
other securities, debts, credits, bank
accounts, and interest in the rights to
personal property.
What is levy?
It is seizure of real properties 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.
NEWS
December12,Saturday
WHAT
ARE
REMEDIES
OF
GOVERNMENT?
THE When is distraint and levy

THE not available?
chattels,
or
effects,
property (Sec. 205)
(Sec. 205)
It bears to stress, however, that the

remedy of distraint and levy shall not be
availed of where the amount of the tax
involved is not more than one hundred
pesos (P100.00).
What is their nature?

Both remedies are summary in nature
and either may be pursued in the
discretion of the authorities charged with
the collection of tax independently , or
simultaneously with civil and criminal
action once the assessment becomes
final and demandable.
(Central Cement Corp. v. CIR, CTA
Case No. 4312)
NEWS
December12,Saturday
WHAT
ARE
REMEDIES
OF
GOVERNMENT?
THE What are the types of

THE distraint?
chattels,
or
effects,
property (Sec. 205)
(Sec. 205)
1. Constructive
2. Actual
When may constructive

distraint be applied?
1. When delinquent taxpayer is retiring from
business subject to tax;
2. When delinquent taxpaper is intending to
leave Philippines or to remove his
property therefrom or to hide or conceal
his property;
3. When taxpayer is intending to perform
any act intending to obstruct proceedings
for collecting the tax due or which may be
due from him.
NEWS
December12,Saturday
WHAT
ARE
REMEDIES
OF
GOVERNMENT?
THE
THE
chattels,
or
effects,
property (Sec. 205)
(Sec. 205)
What are specific cases when CD

may be effected?
1. Taxpayer has a record of Leaving the
Philippines at least twice a year, unless such
business is justified and/or connected with
his trade, business or profession;
2. Taxpayer applying for Retirement from
business has a huge amount of assessment
pending with the BIR;
3. Taxpayer has record of Transferring his bank
deposits and other personal properties in
the Phil. to any foreign country except if
taxpayer is a banking institution;
4. Taxpayer uses Aliases in bank accounts
other than the name for which he is legally
and/or popularly known;
5. Taxpayer keeps Bank deposits and other
properties under the name of other persons,
whether or not related to him, and the same
are not under any lawful fiduciary or trust
capacity;
6. There is big amount of Undeclared income
known to the public and to the BIR and there
is a strong reason to believe that the
taxpayer will hide or conceal his property;
7. BIR receives Complaint or information
pertaining to undeclared income (of big
amount) and such is supported by
NEWS
December12,Saturday
WHAT
ARE
REMEDIES
OF
GOVERNMENT?
THE What are the types of

THE distraint?
chattels,
or
effects,
property (Sec. 205)
(Sec. 205)
1. Constructive
2. Actual
How is constructive
effected?
distraint
It is effected by requiring the taxpayer

or any person having possession of the
property:
1. To sign a receipt covering the
property distrained;
2. To obligate himself to preserve it
intact and unaltered; and
3. Not to dispose of it without the
What if a taxpayer or person having
express authority of the CIR.
possession of property refuses or
fails to sign?
The officer shall:
1. Prepare a list of such property; and
2. Leave a copy of such list in the
premises where the property is located,
in the presence of 2 witnesses.
NEWS
December12,Saturday
WHAT
ARE
REMEDIES
OF
GOVERNMENT?
THE
THE
chattels,
or
effects,
property (Sec. 205)
(Sec. 205)
How is actual distraint effected?

Upon failure to pay the delinquent tax at
the time required, the proper officer shall
seize and distraint any goods, chattels, or
effects, and the personal property, including
stocks and other securities, debts, credits,
bank accounts and interests in and rights to
personal property of the taxpayer in sufficient
quantity to satisfy the tax, expenses of
distraint and the cost of the subsequent sale.
Who is authorized to issue the

warrant of distraint?
1.CIRorhisdulyauthorizedrepresentativeifthe
amountinvolvedisinexcessofP1million;or
2.RevenueDistrictOfficeriftheamountinvolved
isP1millionorless.(Sec.207[A],NIRC)
NEWS
December12,Saturday
WHAT
ARE
REMEDIES
OF
GOVERNMENT?
THE
THE
chattels,
or
effects,
property (Sec. 205)
(Sec. 205)
What is the procedure that

must be observed in effecting
actual distraint?
1. Commencement of distraint proceedings by the
CIR or his duly authorized representatives or by
therevenuedistrictofficerasthecasemaybe;
2. Service of warrant of distraint upon taxpayer or
uponanypersoninpossessionoftheproperty;
3. Postingofnoticeinnotlessthan2publicplacesin
the municipality or city and notice to taxpayer
specifying the time and place of sale and the
articlesdistrained;
4. Sale at public auction to be held not less than 20
days after notice to the owner or possessor of the
propertyandpublicationorpostingofsuchnotice;
5. Dispositionofproceedsofthesale;
6. Residueoverandabovewhatisrequiredtopaythe
entire claim, including expenses,shallbe returned
totheownerofthepropertysold.
December12,Saturday
To whom is the warrant of

distraint served?
1.As to tangible goods:
a. The owner or person in
possession;or
b.
Someone
of
suitable age and discretion at the
dwelling or place of business of such
person.
2. As to stocks and/or securities:
a. Upon the taxpayer; and
b. President, manager, treasurer or
other responsible officer of the
corporation.
3. As to debts/credits:
a. Upon the person owing the debt;
or
b. The person having control over
the credit or his agent.
4. As to bank accounts:
a. Upon the taxpayer and
b. The president, manager, treasurer
or other responsible officer of the
NEWS
What are the rules governing the
sale?
1.The sale must be held at the time and
place stated in the notice.
2.It may be conducted by the Revenue
Officer or through a licensed commodity
or stock exchange.
3.If the sale is conducted by the Revenue
Officer, it must be a public auction and
the property shall be sold to the highest
bidder for cash.
4.If the sale is through a licensed
commodity or stock exchange, it must be
with the approval of the CIR.
5.In case of stocks and other securities,
the officer making the sale shall execute
a bill of sale, which shall be delivered to
the buyer and to the corporation,
company or association which issued the
stocks or other securities. Upon receipt
of the copy of the bill of sale, an entry of
transfer should be made in the company
or
associations
book
and
a
corresponding certificate of stock shall
be issued if required.
6.Any residue over and above what is
NEWS
December12,Saturday
WHAT
ARE
REMEDIES
OF
GOVERNMENT?
THE When may levy be

THE made?
1.Distraint
of
personal
chattels,
or
effects,
real
property
and
interest in or rights to
real property (Sec. 205)
(Sec. 205)
1. Itmaybemadebefore,simultaneouslyorafterthe
distraintofpersonalpropertyofthesametaxpayer.
How is levy on real

propertyeffected?
It may be effected by serving upon the
taxpayer a written notice of levy in the form of a
dulyauthenticatedcertificatepreparedbyRevenue
DistrictOfficercontaining:[DNA]
1. Description of the property upon which
levyismade;
2.Nameofthetaxpayer;
3.Amountoftaxandpenaltydue.
NEWS
December12,Saturday
WHAT
ARE
REMEDIES
OF
GOVERNMENT?
THE What
are
the
THE procedures for levy of
real property?
1.Distraint
of
personal
chattels,
or
effects,
real
property
and
(Sec. 205)
1. Preparation of a duly authenticated certificate

which shall operate with force of a legal
executionthroughoutthePhilippines.
2. Serviceofthewrittennoticetothe:
a.Delinquenttaxpayer,or
b. If he is absent from the Philippines, to his
agentorthemanagerofthebusinessinrespectto
whichtheliabilityarose,or
c.Iftherebenone,theoccupantoftheproperty;
d. The Registry of Deeds of the place where the
propertyislocatedshallalsobenotified;
3.Advertisementofthetimeandplaceofsalewithin
20daysafterthelevybypostingofnoticeandby
publicationforthreeconsecutiveweeks.
4.Saleatapublicauction.
5.Dispositionofproceedsofsale.
6.Residuetobereturnedtotheowner.
NEWS
December12,Saturday
WHAT
ARE
REMEDIES
OF
GOVERNMENT?
THE
THE
1.Distraint
of
personal
chattels,
or
effects,
real
property
and
(Sec. 205)
May the taxpayer redeem

his property after the
consummation of the sale?
Yes, within 1 year from the date
of sale, the taxpayer or anyone for
him, may pay to the Revenue District
Officer the total amount of the
following:
1. Public taxes;
2. Penalties;
3. Interest from the date of
delinquency to the date of sale; and
4. Interest on said purchase price
at the rate of 15% per annum from
the date of sale to the date of
redemption.
Note: If the property was forfeited in favor
of the government, the redemption price
shall include only the taxes, penalties and
interest plus costs of sale no interest on
purchase price since the Government did
not purchase the property, for it was
NEWS
December12,Saturday
WHAT
ARE
REMEDIES
OF
GOVERNMENT?
THE
THE
1.Distraint
of
personal
chattels,
or
effects,
property (Sec. 205)
(Sec. 205)
What is a civil action as a

tax remedy?
For tax remedy purposes, these
are
actions
instituted
by
the
government
to
collect
internal
revenue taxes in the regular courts
after assessment by CIR has become
final and executory. It includes,
however, the filing by the government
of claims against the deceased
taxpayer with the probate court.
What are the two ways to enforce

civil liability through civil actions?
1. Byfilingacivilcaseforcollectionofasum
ofmoneywiththeproperregularcourt;or
2. 2. By filing an answer to the petition for
reviewfiledbytaxpayerwithCTA
NEWS
December12,Saturday
WHAT
ARE
REMEDIES
OF
GOVERNMENT?
THE
THE
1.Distraint
of
personal
chattels,
or
effects,
property (Sec. 205)
(Sec. 205)
When is a
resorted to?
civil
action
Itiscollectible:
1. When tax is assessed and the assessment
became final and executory because the taxpayer
fails to file a protest with the CIRwithin30days
fromreceipt.
2.Whenaprotestagainstassessmentisfiled
and a decision of the CIR was rendered but the
said decision became final, executory and
demandable for failure of the tax payer to appeal
the decision to the CTA within 30 days from the
receiptofthedecision.
3.Whentheprotestisnotacteduponbythe
CIR within 180 days from the submission of the
documents and the taxpayer failed to appeal with
theCTAwithin30daysfromthelapseofthe180
daysperiod.(Sec.228,NIRC)
NEWS
December12,Saturday
WHAT
ARE
REMEDIES
OF
GOVERNMENT?
THE
THE
1.Distraint
of
personal
chattels,
or
effects,
property (Sec. 205)
(Sec. 205)
When is a
resorted to?
civil
action
It is collectible:
1. When tax is assessed and the
assessment became final and executory
because the taxpayer fails to file a
protest with the CIR within 30 days from
receipt.
2.
When
a
protest
against
assessment is filed and a decision of the
CIR was rendered but the said decision
became
final,
executory
and
demandable for failure of the tax payer
to appeal the decision to the CTA within
30 days from the receipt of the decision.
3. When the protest is not acted
upon by the CIR within 180 days from
the submission of the documents and
the taxpayer failed to appeal with the
CTA within 30 days from the lapse of the
180 days period. (Sec. 228, NIRC)
Note: In the case of a false or fraudulent return
with intent to evade tax or of failure to file a
NEWS
December12,Saturday
WHAT
ARE
REMEDIES
OF
GOVERNMENT?
THE
THE
1.Distraint
of
personal
chattels,
or
effects,
property (Sec. 205)
(Sec. 205)
Where to file?
1. CTA - where
the principal
amount of taxes and fees, exclusive of
charges and penalties claimed is P1
million and above;
2. RTC, MTC, MeTC - where the
principal amount of taxes and fees,
exclusive of charges and penalties
claimed is less than P1 million.
(Sec. 7, R.A. 9282)
COURTS AMOUNT OF TAXES

INVOLVED
Municipal Trial Courts outside Metro Manila Amount does
notexceed300,000
MunicipalTrialCourtswithinMetroManilaAmountdoesnot
exceed400,000
RegionalTrialCourtsoutsideMetroManila300,001to999,999
RegionalTrialCourtswithinMetroManila400,001to999,999
NEWS
December12,Saturday
WHAT
ARE
REMEDIES
OF
GOVERNMENT?
THE
THE
1.Distraint
of
personal
chattels,
or
effects,
property (Sec. 205)
(Sec. 205)
Where to file?
1. CTA - where
the principal
amount of taxes and fees, exclusive of
charges and penalties claimed is P1
million and above;
2. RTC, MTC, MeTC - where the
principal amount of taxes and fees,
exclusive of charges and penalties
claimed is less than P1 million.
(Sec. 7, R.A. 9282)
COURTS&AMOUNTOFTAXES
INVOLVED
Municipal Trial Courts outside Metro Manila Amount does

notexceed300,000
MunicipalTrialCourtswithinMetroManilaAmountdoesnot
exceed400,000
RegionalTrialCourtsoutsideMetroManila300,001to999,999
RegionalTrialCourtswithinMetroManila400,001to999,999
NEWS
December12,Saturday
WHAT
ARE
REMEDIES
OF
GOVERNMENT?
THE
THE
1.Distraint
of
personal
chattels,
or
effects,
property (Sec. 205)
(Sec. 205)
What is the purpose of

filing a criminal action?
Criminal
complaint
is
instituted not to demand
payment but to penalize
taxpayer for the violation of
the NIRC.
What are the two

common crimes
punishable under the
NIRC?
1. Willful attempt to evade or
defeat tax (Sec. 254, NIRC)
2. Failure to file return, supply
correct and accurate information,
pay tax, withhold and remit tax
NEWS
December12,Saturday
WHAT
ARE
REMEDIES
OF
GOVERNMENT?
THE
THE
1.Distraint
of
personal
chattels,
or
effects,
property (Sec. 205)
(Sec. 205)
Does
acquittal
in
the
criminal action on tax
liability
exonerate
the
taxpayer from payment of
civil liability to pay tax?
No. Generally it is the criminal liability that would
give rise to the civil liability, but in tax cases the
criminal liability arises from the act of not paying
the tax due which occurred first. The basis of the
civil liability is not from the criminal liability but
from the act of not paying the tax. Thus, the
exoneration from criminal action will not
exonerate the taxpayer from its civil liability.
(Republic v. Patanao, GR L-22356, July 21, 1967)
What is the effect of

the subsequent
satisfaction of civil
liability?
The subsequent satisfaction of civil
liability by payment or prescription does not
NEWS
December12,Saturday
WHAT
ARE
REMEDIES
OF
GOVERNMENT?
THE
THE
1.Distraint
of
personal
chattels,
or
effects,
property (Sec. 205)
(Sec. 205)
May a criminal action be

filed despite the lapse of
the period to file a civil
action for collection of
taxes?
Yes, provided that the criminal
action is instituted within 5 years
from the commission of the
violation or from the discovery
thereof, whichever is later. Also
the
two
have
different
prescriptive periods and such
period would run independently
from each other.
Can there be subsidiary

imprisonment in case the
taxpayer is insolvent?
In case of insolvency on the part of the taxpayer,
subsidiaryimprisonmentcannotbeimposedasregards
NEWS
December12,Saturday
WHAT
ARE
REMEDIES
OF
GOVERNMENT?
THE
Is
assessment
THE necessary before a
1.Distraint
of
personal
chattels,
or
effects,
property (Sec. 205)
(Sec. 205)
taxpayer
may
be
prosecuted
for
willfully attempting in
any manner to evade
or
defeat
any
tax
imposed by the NIRC?
No,providedthereisaprimafacieshowingofa
willful attempt to evade taxes as in the
taxpayers failure to declare a specific item of
taxable income in his income tax returns. A
crime is complete when the violator has
knowingly and willfully filed a fraudulent
return with intent to evade and defeat the tax.
(Ungab v. Cusi, GR L4191924, May 30,
1980)
NEWS
December12,Saturday
WHAT
ARE
REMEDIES
OF
GOVERNMENT?
THE
THE
1.Distraint
of
personal
chattels,
or
effects,
property (Sec. 205)
(Sec. 205)
When can a suit to recover

tax based on false or
fraudulent
returns
be
instituted
A proceeding in court for the collection of the
taxassessedmaybefiledwithoutassessmentat
any time within ten (10) years after the
discovery of the falsity, fraud or omission.
Provided,thatinafraudassessmentwhichhas
become final and executor, the fact of fraud
shall be judicially taken cognizance of in the
civil or criminal action for the collection
thereof.[Sec.222,NIRC]
Distinguish between false return v.

fraudulentreturn
A false return is due to mistakes, carelessness or
ignoranceandafraudulentreturnisfiledwithintentto
evade taxes.Thefraudcontemplatedbylawisactual
and not constructive, and must amount to intentional
wrongdoing with the sole object of avoiding the tax.
[Aznarv.CTA(1974)]
December12,Saturday
WHAT
ARE
REMEDIES
OF
GOVERNMENT?
NEWS
THE Distinguish between a
Complaint
for
Tax
THE Evasion
and
Assessment.
1.Distraint
of
personal
chattels,
or
effects,
property (Sec. 205)
(Sec. 205)
The issuance of an assessment must be distinguished

fromthefilingofacomplaint.Beforeanassessmentis
issued, there is, by practice a preassessment notice
sent to the taxpayer. The taxpayer is then given a
chance to submit position papers and documents to
provethattheassessmentisunwarranted.IftheCIRis
unsatisfied,anassessmentisthensenttothetaxpayer
informing the latter specifically and clearly that an
assessment has been made against him or her. In
contrast,thecriminalchargedonotneedtogothrough
all these. The criminal charged is filed directly with
the DOJ. Thereafter, the taxpayer is notified that a
criminal case has been filed against him, not thatthe
commisioner has issued an assessment. It must be
stressedthatacriminalcomplaintisinstitutuednotto
demand payment but to penalize the taxpayer for
violationoftheTaxCode.
December12,Saturday
WHAT
ARE
REMEDIES
OF
GOVERNMENT?
NEWS
THE What is meant by
compromise?
THE
1.Distraint
of
personal
chattels,
or
effects,
property (Sec. 205)
(Sec. 205)
Itisanagreementbetweentwoormorepersons
who, amicably settle their differences on such terms
and conditions as they may agree on to avoid any
lawsuitbetweenthem.
It implies the mutual agreement by the parties
inregardtothethingorsubjectmatterwhichistobe
compromised.Itisacontractwherebytheparties,by
reciprocalconcessionsavoidlitigation.
Whenmustcompromisebemade?
1. CriminalcasesCompromisemustbemadeprior
tothefilingoftheinformationincourt.
2. CivilcasesBeforelitigationoratanystageofthe
litigation, even during appeal, although legal
proprietydemandsthatpriorleaveofcourtshould
beobtained.
NEWS
December12,Saturday
WHAT
ARE
REMEDIES
OF
GOVERNMENT?
THE
THE What
are
requisites
personal
compromise?
1.Distraint
of
chattels,
or
effects,
property (Sec. 205)
(Sec. 205)
the
for
1.Taxliabilityofthetaxpayer;
2. An offer of the taxpayer of an amount
tobepaidbyhim;and
3. The acceptance (the CIR or the
taxpayer) of the offer in the settlement of the
claim
Note: If the offer to compromise was rejected
bythetaxpayer,thecompromisepenaltycannot
be enforced thru an action in court, or by
distraint or levy.If the CIR wantsto enforcea
penalty he must file a criminal action in the
courts. (CIR v. Abad GR L19627, June 27,
1968)
NEWS
December12,Saturday
WHAT
ARE
REMEDIES
OF
GOVERNMENT?
THE
THE
1.Distraint
of
personal
chattels,
or
effects,
property (Sec. 205)
(Sec. 205)
What
cases
can be subject
to
compromise?
What
cases
cannot
be
subject
to
compromise?
1.Delinquentaccounts
1. Criminal tax Fraud cases,

confirmed as such by the
CIR or his duly authorized
representative.
2. 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.
3.
Cases which become
Final and executory after
final judgment of a court,
where
compromise
is
requested on the ground
of doubtful validity of the
assessment. 4. Estate tax
cases where compromise
is requested on the
ground
of
financial
incapacity
of
the
taxpayer.
5. Withholding tax cases,
unless
the
applicant
taxpayer invokes provisions

of law that cast doubt on the
2. Cases under Administrative

protestafterissuanceoftheFinal
Assessment Notice to the
taxpayer which are still pending
in the RO, RDO, Legal Service,
Large
Taxpayer
Service,
Collection Service, Enforcement
Service, and other offices in the
NationalOffice
3.Civiltaxcasesdisputedbefore
thecourts
4.Collectioncasesfiledincourts
5. Criminal violations except: a.
Those already filed in courts;
and b. Those involving criminal
taxfraud.(Sec.3,RR302002)
NEWS
December12,Saturday
WHAT
ARE
REMEDIES
OF
GOVERNMENT?
THE
THE
1.Distraint
of
personal
chattels,
or
effects,
property (Sec. 205)
(Sec. 205)
What are the

compromise?
grounds
for
1. Doubtfulvalidityofassessment;or
2. Financialincapacity
What are the requisites in

order for compromise based
on financial incapacity be
given due course?
1. Clearinabilitytopaythetax;and
2. Thetaxpayermustwaiveinwritinghisprivilegeof
thesecrecyofbankdepositunderRA1405orother
generalorspeciallaws,whichshallconstituteasthe
CIRs authority to inquire into said bank deposits
(Sec.6[F],NIRC)
Define compromise penalty.

It is a certain amount of money
paid in lieu of criminal prosecution
and cannot be imposed in the
absence of a showing that the
taxpayer consented thereto.
NEWS
December12,Saturday
WHAT
ARE
REMEDIES
OF
GOVERNMENT?
THE
THE
1.Distraint
of
personal
chattels,
or
effects,
property (Sec. 205)
(Sec. 205)
When
may
an
offer
to
compromise
a
delinquent
account
or
disputed
assessment on the ground of
reasonable doubt as to the
validity of the assessment be
accepted?
When:
1.The delinquent account or disputed
assessment is one resulting from a
jeopardy assessment.
2.The assessment seems to be arbitrary
in nature, appearing to be based on
presumptions and there is reason to
believe that it is lacking in legal and/or
factual basis.
3.The taxpayer failed to file an
administrative protest on account of
the alleged failure to receive notice of
assessment and there is reason to
believe that the assessment is lacking
in legal and/or factual basis.
4.The taxpayer failed to file a request for
NEWS
December12,Saturday
WHAT
ARE
REMEDIES
OF
GOVERNMENT?
THE
THE
1.Distraint
of
personal
chattels,
or
effects,
property (Sec. 205)
(Sec. 205)
When
may
an
offer
to
compromise
a
delinquent
account
or
disputed
assessment on the ground of
reasonable doubt as to the
validity of the assessment be
accepted?
When:
5. The taxpayer failed to elevate to the

CTA an adverse decision of the CIR, or
his authorized representative, in some
cases, within 30 days from receipt
thereof and there is reason to believe
that the assessment is lacking in legal
and/or factual basis.
6. Assessments made based on the Best
Evidence Obtainable Rule and there is
reason to believe that the same can be
disputed by sufficient and competent
evidence.
7. Assessment was issued within the
prescriptive period for assessment as
extended by the taxpayers execution
NEWS
December12,Saturday
WHAT
ARE
REMEDIES
OF
GOVERNMENT?
THE
When
THE compromise
1.Distraint
of
personal
chattels,
or
effects,
property (Sec. 205)
(Sec. 205)
must
be
entered into?
It must be entered into prior
to
the
institution
of
the
corresponding
criminal
action
arising out of a violation of the
provisions of the Tax Code. A
compromise can never be entered
into after final judgment because
by virtue of such final judgment
the Government had already
acquired a vested right. (Roviro v.
Amparo, G.R. L- 5482, May 5,
1982)
Note: A compromise validly entered into
between the CIR and the taxpayer prior to
the institution of the corresponding criminal
action arising out of a violation of the
NEWS
December12,Saturday
WHAT
ARE
REMEDIES
OF
GOVERNMENT?
THE Who may compromise

THE tax cases?
1.Distraint
of
personal
chattels,
or
effects,
property (Sec. 205)
(Sec. 205)
1. The CIR may compromise with

respect to criminal and civil cases
arising from violations of the NIRC as
well as the payment of any internal
revenue tax when:
a. A reasonable doubt as to the
validity of the claim against the
taxpayer exists provided that the
minimum compromise entered into is
equivalent to 40% of the basic tax; or
b. The financial position of the
taxpayer demonstrates a clear inability
to pay the assessed tax provided that
the minimum compromise entered into
is equivalent to 10% of the basic
assessed tax.
Note: In these instances, 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. (Sec. 204 [A], NIRC)
If the basic tax involves exceeds P1 million or when
NEWS
December12,Saturday
WHAT
ARE
REMEDIES
OF
GOVERNMENT?
THE Who may compromise

THE tax cases?
1.Distraint
of
personal
chattels,
or
effects,
property (Sec. 205)
(Sec. 205)
2. The Regional Evaluation Board

(REB) may compromise:
a. Tax assessments by revenue
officers involving basic deficiency
taxes of P500,000 or less; and
b. For minor criminal violations
(RR 7- 2001)
Note: The REB shall becomposed
of:
a. The Regional Director as
Chairman;
b.
The Assistant
Regional
Director;
c. Chief, Legal Division;
d. Chief, Assessment Division;
e. Chief, Collection Division;
NEWS
December12,Saturday
WHAT
ARE
REMEDIES
OF
GOVERNMENT?
THE What is the extent of

THE Commissioners power
1.Distraint
of
personal
chattels,
or
effects,
property (Sec. 205)
(Sec. 205)
to compromise criminal
violations?
1.Before the complaint is filed with
the Prosecutors Office full
discretion to compromise except
those involving fraud;
2.After the complaint is filed with
the Prosecutors Office but before
the information is filed with the
court can still compromise
provided that the prosecutor
gives his consent;
3.After the information is filed with
the court no longer permitted to
compromise with or without the
consent of the Prosecutor. (People
NEWS
December12,Saturday
WHAT
ARE
REMEDIES
OF
GOVERNMENT?
THE
Whatarethelimitationsonthe
THE
1.Distraint
of
personal
chattels,
or
effects,
property (Sec. 205)
(Sec. 205)
power to compromise a tax

liability?
1. Minimum compromise rate:
a. In case of financial incapacity,
10% of basic assessed tax
b. In other cases, 40% of basic
assessed tax
2. Subject to approval of Evaluation
Board:
a. When basic tax involved exceeds
P1,000,000
b. Where the settlement offered is
less than the prescribed minimum
rates. (Sec. 204, NIRC)
c. When the CIR is not authorized to
compromise
Note: The minimum compromise rate may be
less than the prescribed rates, as the case
may be, provided it is approved by the
NEWS
December12,Saturday
WHAT
ARE
REMEDIES
OF
GOVERNMENT?
THE
Whatarethelimitationsonthe
THE
1.Distraint
of
personal
chattels,
or
effects,
property (Sec. 205)
(Sec. 205)
power to compromise a tax

liability?
1. Minimum compromise rate:
a. In case of financial incapacity,
10% of basic assessed tax
b. In other cases, 40% of basic
assessed tax
2. Subject to approval of Evaluation
Board:
a. When basic tax involved exceeds
P1,000,000
b. Where the settlement offered is
less than the prescribed minimum
rates. (Sec. 204, NIRC)
c. When the CIR is not authorized to
compromise
Note: The minimum compromise rate may be
less than the prescribed rates, as the case
may be, provided it is approved by the
NEWS
December12,Saturday
WHAT
ARE
REMEDIES
OF
GOVERNMENT?
THE
THE
1.Distraint
of
personal
chattels,
or
effects,
property (Sec. 205)
(Sec. 205)
What is meant by abatement of

tax liability?
It is the cancellation of a tax
liability.
Differentiate compromise from
abatement.
Compromise involves a reduction of
the
taxpayers
liability,
while
abatement means that the entire
tax liability of the taxpayer is
cancelled.
When is the CIR authorized to
abate or cancel a tax liability?
1. The tax or any portion thereof
appears to be unjustly or
excessively assessed; or
2. The
administration
and
NEWS
December12,Saturday
WHAT
ARE
REMEDIES
OF
GOVERNMENT?
THE
THE
1.Distraint
of
personal
chattels,
or
effects,
property (Sec. 205)
(Sec. 205)
What are the instances when the tax

liabilities, penalties and/or interest
imposed on the taxpayer may be abated
on the ground that the imposition
thereof is unjust or excessive?
When:
1.The filing of the return/payment is made at
the Wrong venue.
2.The taxpayer fails to file the return and pay
the tax on time due to:
a. Substantial losses from prolonged labor
dispute;
b. Force majeure;
c. Legitimate business reverses.
Note: The abatement shall only cover the surcharge and
the compromise penalty and not the interest imposed
under Sec. 249, NIRC (also applicable in number 5) 3.
There is Late payment of the tax under meritorious
circumstances (i.e. Failure to beat bank cut-off time,
surcharge erroneously imposed.)
4. The assessment is brought about or

resulted from taxpayers non-compliance
with the law due to a difficult Interpretation
of said law.
5. The taxpayer fails to file the return and pay
the
correct
tax
on
time
due
to
Circumstances beyond his control.
NEWS
December12,Saturday
WHAT
ARE
REMEDIES
OF
GOVERNMENT?
THE
THE
1.Distraint
of
personal
chattels,
or
effects,
property (Sec. 205)
(Sec. 205)
What are the instances when

the tax liabilities, penalties
and/or interest imposed on the
taxpayer may be abated on the
ground that tax administration
and collection costs are more
than the amount sought to be
collected?
1.
Abatement
of
penalties
on
assessment confirmed by the lower
court but Appealed by the taxpayer to
a higher court.
2.
Abatement
of
penalties
on
Withholding tax assessment under
meritorious circumstances.
3.
Abatement
of
penalties
on
assessment
reduced
after
Reinvestigation but taxpayer is still
contesting reduced assessment.
4. Abatement of penalties on Delayed
NEWS
December12,Saturday
WHAT
ARE
REMEDIES
OF
GOVERNMENT?
THE What is meant by tax

THE lien?
1.Distraint
of
personal
chattels,
or
effects,
property (Sec. 205)
(Sec. 205)
It is a legal claim or charge on property,

personal or real, established by law as a
sort of security for the payment of tax
Is
tax itself a lien?
obligations.
Tax is not a lien even upon the property
against which it is assessed, unless
expressly made so by statute.
What is the nature of tax

lien?
It is enforced as payment of tax,
interest, penalties, costs upon the entire
property and rights to property of the
taxpayer. However, to be valid against
any mortgagee, purchaser or judgment
creditor, notice of such lien has to be
filed by CIR with the Registry of Deeds.
(Sec. 219, NIRC)
Note: A valid assessment is required to be
NEWS
December12,Saturday
WHAT
ARE
REMEDIES
OF
GOVERNMENT?
THE When
is
THE applied?
1.Distraint
of
personal
chattels,
or
effects,
property (Sec. 205)
(Sec. 205)
tax
lien
1. With respect to personal property

Tax lien attaches when the taxpayer
neglects or refuses to pay tax after
demand and not from the time the
warrant is served (Sec. 219, NIRC)
2. With respect to real property from
What
happens
to
the
time of registration with the register
residue?
of deeds.
It is returned to the owner.

When
is
the
tax
lien
extinguished?
1.By payment or remission of the tax

2.By prescription of the right of
government to assess or collect
3.By failure to file notice of such tax lien
in the office of Register of Deeds
4.By destruction of property subject to
tax lien
5.By replacing it with a bond Note: A
buyer in an execution sale acquires
NEWS
December12,Saturday
WHAT
ARE
REMEDIES
OF
GOVERNMENT?
THE
THE
1.Distraint
of
personal
chattels,
or
effects,
property (Sec. 205)
(Sec. 205)
Distinguish lien from

distraint.
Lien
Distraint
Directed against what?

The property
subject to the tax
Need not to be
directed against the
property subject to
tax.
To whom directed?
The property itself
regardless of the
present owner of
the property
The property should

be presently owned
by the taxpayer
NEWS
December12,Saturday
WHAT
ARE
REMEDIES
OF
GOVERNMENT?
THE
THE
1.Distraint
of
personal
chattels,
or
effects,
property (Sec. 205)
(Sec. 205)
Define forfeiture.
It is the divestiture of property
without
compensation,
in
consequence of a default or
offense.
Sec. 224, NIRC
The forfeiture of chattels and
removable fixtures of any sort
shall be enforced by the seizure
and sale, or destruction, of the
specific forfeited property. The
forfeiture of real property shall
be enforced by a judgment of
condemnation and sale in legal
action or proceeding, civil or
criminal, as the case may
require.
NEWS
December12,Saturday
WHAT
ARE
REMEDIES
OF
GOVERNMENT?
THE
THE
1.Distraint
of
personal
chattels,
or
effects,
property (Sec. 205)
(Sec. 205)
What is the
forfeiture?
effect
of
Forfeiture transfers the title to the

specific thing from the owner to
the government. Also there would
no longer be any further levy for
such would be for the total
Can
there
further
satisfaction
of the be
tax due.
(Sec
distraint?
215, NIRC)
The remedy of distraint and levy may
be repeated if necessary until the full
amount of the tax delinquency due
including all expenses is collected from
the
taxpayer.
(Sec.
217,
NIRC)
Otherwise, a clever taxpayer who is
able to conceal most of the valuable
part of his property would escape
payment of his tax liability by
sacrificing an insignificant portion of his
holdings.
NEWS
December12,Saturday
WHAT
ARE
REMEDIES
OF
GOVERNMENT?
THE
THE What
1.Distraint
of
personal
chattels,
or
effects,
property (Sec. 205)
(Sec. 205)
are the rules

governing forfeiture?
1. If there is no bidder in the public
sale or if the amount of the highest
bid is insufficient to pay the taxes,
penalties and costs, the real
property shall be forfeited to the
government.
2. The Register of Deeds shall transfer
the title of forfeited property to the
Government without necessity of a
court order.
3. Within 1 year from the date of sale,
the property may be redeemed by
the delinquent taxpayer or any one
for him, upon payment of taxes,
penalties and interest thereon and
cost of sale; if not redeemed within
said period, the forfeiture shall
NEWS
December12,Saturday
WHAT
ARE
REMEDIES
OF
GOVERNMENT?
THE What is the nature of

THE civil penalties?
1.Distraint
of
personal
chattels,
or
effects,
property (Sec. 205)
(Sec. 205)
They are in addition to the tax

to be paid.
What is a surcharge or
surtax?
It is a civil penalty imposed by
law as an addition to the main
tax required to be paid. It is a
civil administrative sanction
provided as a safeguard for the
protection of the State revenue
and
to
reimburse
the
government for the expenses
of investigation and the loss
resulting from the taxpayers
fraud. A surcharge added to the
NEWS
December12,Saturday
WHAT
ARE
REMEDIES
OF
GOVERNMENT?
THE
What
THE
1.Distraint
of
personal
chattels,
or
effects,
property (Sec. 205)
(Sec. 205)
are
the
corresponding rates of
surcharges?
1.Twenty-five percent (25%) of the
amount due, in the following cases:
a. Failure to File any return and pay the tax due
thereon as required under the provisions of the
NIRC or rules and regulations on the date
prescribed ;
b. Failure to pay the deficiency tax within the Time
prescribed for its payment in the notice of
assessment ;
c. Unless otherwise authorized by the CIR, filing a
return with an internal revenue officer Other than
those with whom the return is required to be filed ;
d. Failure to Pay the full or part of the amount of
tax shown on any return required to be filed under
the provisions of the NIRC or rules and regulations,
or the full amount of tax due for which no return is
required to be filed, on or before the date
prescribed for its payment (Sec 248 [A], NIRC)
2. The penalty shall be fifty percent

(50%) of the tax or of the deficiency
tax, in the following cases: a. Willful
NEWS
December12,Saturday
WHAT
ARE
REMEDIES
OF
GOVERNMENT?
THE
THE
1.Distraint
of
personal
chattels,
or
effects,
property (Sec. 205)
(Sec. 205)
When is a return deemed false or

fraudulent?
A prima facie evidence of false or
fraudulent return arises when there
is: under-over
1. A substantial under declaration
of taxable sales, receipts or income;
or
2. A substantial overstatement of
deductions (Sec. 248, NIRC)
When is there a substantial
underdeclaration
of
taxable
sales, receipts or income?
When there is failure to report sales,
receipts or income in an amount
exceeding 30% of that declared per
return.
When is there a substantial
overstatement of deductions?
There is a substantial overstatement
NEWS
December12,Saturday
WHAT
ARE
REMEDIES
OF
GOVERNMENT?
THE
THE
1.Distraint
of
personal
chattels,
or
effects,
property (Sec. 205)
(Sec. 205)
Are there interests

addition to the tax?
to
be
paid
in
Yes, there shall be assessed and collected on any

unpaid amount of tax, interest at the rate of 20% per
annum, or such higher rate as may be prescribed by
rules and regulations, from the date prescribed for
payment until the amount is fully paid. (Sec. 249,
NIRC)
What is Deficiency Interest?

Any deficiency in the tax due, as the term is
defined in the NIRC, shall be subject to the
interest prescribed in subsec. A hereof, which
interest shall be assessed and collected from
the date prescribed for payment until the
amount is fully paid (Sec. 249, NIRC)
What is Delinquency Interest?

In case of failure to pay:
1.The amount of the tax due on any return required
to be filed; or
2.The amount of the tax due for which no return is
required; or
3.A deficiency tax, or any surcharge or interest
thereon on the due date appearing in the notice
and demand of the CIR.
There shall be assessed and collected on the
unpaid amount, interest at the rate prescribed in
subsec. A hereof until the amount is fully paid, which
NEWS
December12,Saturday
WHAT
ARE
REMEDIES
OF
GOVERNMENT?
THE
THE
1.Distraint
of
personal
chattels,
or
effects,
property (Sec. 205)
(Sec. 205)
Interest on extended payment

20% per annum on the tax or
deficiency tax or any part thereof
unpaid from the date of notice and
demand until it is paid if any person
required to pay the tax is:
(a)Qualified and elects to pay the tax
on installment but fails to pay the tax
or any installment or any part of such
amount or installment or before the
date prescribed for its payment; or
(b)Where
the
Commissioner
has
authorized an extension of time
within which to pay a tax or a
[249(D), NIRC]
NEWS
December12,Saturday
WHAT
ARE
REMEDIES
OF
GOVERNMENT?
THE
THE
1.Distraint
of
personal
chattels,
or
effects,
property (Sec. 205)
(Sec. 205)
Interest on extended payment

20% per annum on the tax or
unpaid from the date of notice and
demand until it is paid if any person
required to pay the tax is:
(a)Qualified and elects to pay the tax
on installment but fails to pay the tax
or any installment or any part of such
amount or installment or before the
date prescribed for its payment; or
(b)Where
the
Commissioner
has
authorized an extension of time
within which to pay a tax or a
[249(D), NIRC]
NEWS
December12,Saturday
THE STATUTE OF
LIMITATIONS
What
Fraud?
Fraud is
constitutes
a question of fact that

cannot be presumed but must be
sufficiently
established
.
Mere
understatement of the income in itself
does not constitute fraud. It must be
proven as a fact that there was intentional
and substantial understatement of tax
liability.
Fraud was likewise found to exist in a
case where there was substantial and
intentional overstatement of deductions or
exemptions, like the presence of fictitious
expenses which were claimed by the
taxpayer as deductions from gross
income.
What is the prima facie evidence of a

False or Fraudulent Return?
A substantial underdeclaration of taxable sales,
receipts, or income, or a substantial overstatement of
deductions, as determined by the CIR pursuant to the
rules and regulations promulgated by the Secretary of
Finance, shall constitute prima facie evidence of a false or
fraudulent return.
1. Underdeclaration of sales, receipts or
exceeding 30% of that declared per return
income
2. Overstatement of deductions by 30% of actual

deductions.
What is prescriptive period of the criminal

liability of one committing violations of the
Code?
All violations of any provision of this Code
shall prescribe in five years.
The prescriptive period shall commence
from the day of commission of violations, or if not
known at that time, from its discovery.
December12,Saturday
THE STATUTE OF
LIMITATIONS
Can the prescriptive
periods
be
suspended?
Yes.
If the CIR and the taxpayer have
agreed in writing to its assessment after

such time, the tax may be assessed within
the period agreed upon. This agreed
period may be extended by subsequent
written agreement made before the
expiration of the period previously agreed
upon (Sec. 222 [b]).
The waiver however must be executed
within the three-year period prescribed
under Section 203, otherwise said waiver
shall be ineffectual.
NEWS
What are other instances where the
prescriptive period is suspended?
1. When the CIR is prohibited from making
the assessment or beginning distraint or levy
or a proceeding in court and for sisty days
thereafter, such as when their is a pending
petition for review in the CTA from the
decision on the protested assessment, the
filing of such petition interrupts the running of
the prescriptive period for collection (Republic
vs. Ker & Co, 25 SCRA 208)
2.
When
taxpayer
requests
for
a
reinvestigation which is granted by the CIR
(CIR v. Suyoc Consolidate Mining, 104 Phil
819)
3. When the taxpayer cannot be located in the
address given by him in the return
4. When the warrant of distraint and levy is
duly served and no property could be located
5. When the taxpayer is out of the Philippines.

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TAXATION REMEDIES OF THE GOVERNMENT

The remedies of the Government

For its validity, an assessment

Assessment precedes collection except

(A) Payment of Tax(1) In General.- The

1.First installment shall be paid at the time

Who has the burden of proof in preassessment proceedings?

1.Issuance of a letter of authority

6. Issuance of formal letter of demand and

When must an LA be served?

What are the cases which

1.Issuance of a letter of authority

6. Issuance of formal letter of demand and

How is LA revalidated? How often can

How many times can a taxpayer be

1.Issuance of a letter of authority

6. Issuance of formal letter of demand and

Within what period should a RO

Within how many days must the

What is the effect if taxpayer fails to

1.Issuance of a letter of authority

6. Issuance of formal letter of demand and

It is a written notice informing a taxpayer that the

What matters are taken up during

1.Issuance of a letter of authority

6. Issuance of formal letter of demand and

What is the purpose of Informal

Within what period must the

1.Issuance of a letter of authority

What is a PreAssessment Notice

Who issues the FAN?

1.Issuance of a letter of authority

In what form shall the

3. Issuance of notice of informal conference

6. Issuance of formal letter of demand

What is a Notice of Assessment/Formal

CIR V. ATLAS CONSOLIDATED

HELD: Assessments are

Meaning of Best Evidance

Best evidence obtainable Are taxes self-assessing?

notice in order to establish the tax liability of a

Improperly Accumulated Earnings Tax (Sec. 29,

If there is showing that expenses have been incurred but

THE What is distraint?

the tax is enforced on the goods,

THE When is distraint and levy

It bears to stress, however, that the

What is their nature?

THE What are the types of

When may constructive

What are specific cases when CD

THE What are the types of

It is effected by requiring the taxpayer

How is actual distraint effected?

Who is authorized to issue the

What is the procedure that

To whom is the warrant of

THE When may levy be

How is levy on real

1. Preparation of a duly authenticated certificate

May the taxpayer redeem

What is a civil action as a