tax remedies under the nirc [repaired]

7/25/2019 Tax Remedies Under the Nirc [Repaired]

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BIR COLLECTION GOAL

2016RMO 2-2016 sets the collection goal ofthe BIR this 20016

2.025 Trillion

21 inc!easeCo"#a!e$ to the collection goal of 201%

1&6'( T!illionCollection goal fo! Iloilo Cit) this 2016

a"o*nts to40+ Billion


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+hat is ta,ation-It is a "o$e .) /hich a goe!n"ent "aee,actions fo! !een*e in o!$e! to s*##o!tthei! e,istence an$ ca!!) o*t thei! legiti"ate

o.ectie&It is the "ost #e!asie an$ the st!ongest ofall the #o/e!s of the goe!n"ent&

Ta,es a!e the life.loo$ of the goe!n"ent3/itho*t /hich3 it cannot s*.sist&


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Taxation is t! "!str#$ti%! &o'!r 'i$

int!r(!r!s 'it t! &!rsonal an" &ro&!rt)ri*ts o( t! &!o&l! an" ta!s (ro, t!, a&ortion o( t!ir &ro&!rt) (or t! s#&&ort o(t! *o%!rn,!nt.4

5aseo Realt) De& Co!#& s& Co*!t of A##eals

Taxation so#l" ! !x!r$is!" 'it $a#tionto ,ini,i! t! in/#r) to t! &ro&ri!tar)ri*ts o( a tax&a)!r. It ,#st ! !x!r$is!"(airl) !#all) an" #ni(or,l) l!st t! tax

$oll!$tor ill t! 3!n tat la)s t! *ol"!n!**s. In or"!r to ,aintain t! *!n!ralli$s tr#st an" $on"!n$! in t!*o%!rn,!nt tis &o'!r ,#st ! #s!"/#stl) an" not tr!a$!ro#sl). Ro,as ) Cia s& CTA3 28 9CRA 2'6


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GO:ERN;ENT RE;EDIE9

TA


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GO:ERN;ENT RE;EDIE9

o'!rs o( t! BIR 7S!$. 28To assess an$ collect all nationalinte!nal !een*e ta,es3 fees an$ cha!ges

To enfo!ce fo!feit*!es3 >nes an$#enaltiesTo e,ec*te *$g"ents in all cases$eci$e$ in its fao! .) the ta, co*!t an$

o!$ina!) co*!tsTo a$"iniste! s*#e!iso!) an$ #olice#o/e!s confe!!e$ *#on it .) la/


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BIR ORGANI?ATIONAL 9TRUCTURE

9ATIO9A: O;;I


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5o/e!s of the Co""issione!

of Inte!nal Reen*e5o/e! to inte!#!et ta, la/s an$ $eci$eta, cases @9ec& (

5o/e! to o.tain info!"ation an$ tos*""on an$ e,a"ine @9ec& %5o/e! to "ae assess"ents an$ in*i!einto .an $e#osits @9ec& 6A*tho!it) to $elegate #o/e! @9ec& 'D*t) to ens*!e #!oision an$$ist!i.*tion of fo!"s3 !ecei#ts3 etc& @9ec&F


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5o/e! to inte!#!et ta, la/s

an$ $eci$e ta, cases @9ec& (The CIR has the EXSI?E A9D ORI=I9A:*!is$iction toInte!#!et the #!oisions of the NIRC an$ othe!ta, la/s3 s*.ect to !eie/ .) the 9ec!eta!) ofinanceDeci$e

Dis#*te$ assess"ents

Ref*n$s of inte!nal !een*e ta,es3 fees3#enalties

Othe! "atte!s a!ising f!o" the NIRC3 s*.ectto !eie/ .) the CTA


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A gene!al inte!#!etatie !*le iss*e$ .)the CIR "a) .e !elie$ *#on .) ta,#a)e!s

f!o" the ti"e the !*le is iss*e$ *# to its!ee!sal .) the Co""issione! o! thisCo*!t&

CIR & 9an Ro*e3 G&R& No& 1F'(F%3 e.!*a!) 123 2018


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5o/e! to o.tain info!"ation an$

to s*""on an$ e,a"ine@9ec& %The CIR is a*tho!iJe$ .) la/ to $o a/hole host of things in

Asce!taining the co!!ectness of an)!et*!n3 o!;aing a !et*!n /hen none has .een"a$e3 o!Collecting an) s*ch lia.ilit)3 o!Eal*ating ta, co"#liance3 o!In $ete!"ining the lia.ilit) of an)#e!son fo! ta,


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The CIR is a*tho!iJe$ toE,a"ine an) $oc*"ent /hich "a) .e!eleant o! "ate!ial to an in*i!)KO.tain info!"ation f!o" a thi!$ #a!t) in!elation to an inestigation o! a*$it of a

ta,#a)e!K9*""on the ta,#a)e! o! an) #e!sonhol$ing !eco!$s of the ta,#a)e! to a##ea!.efo!e the CIR an$ #!o$*ce $oc*"ents

Tae testi"onies of the #e!son conce!ne$KCa*se BIR e"#lo)ees to canass a!o*n$an$ in*i!e on #e!sons /ho "a) .e lia.le fo!an) inte!nal !een*e ta,


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The la/ allo/s the BIR access to all!eleant o! "ate!ial !eco!$s an$ $ata inthe #e!son of the ta,#a)e!& In fact3 the

BIR can acce#t $oc*"ents /hich cannot.e a$"itte$ in a *$icial #!ocee$ing/he!e the R*les of Co*!t a!e st!ictl)o.se!e$

itness .) Design & CIR3 G&R& No& 1''F23Octo.e! 1'3 200F


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TA< A99E99;ENT B= THIRD 5ART=

LETTER NOTICE

The e,a"ination co*l$ .e "a$e th!o*gh theta, !et*!ns3 !e#o!ts3 an$ s*."issions of othe!ta,#a)e!s /ho" the s*.ect ta,#a)e!s ha$t!ansacte$ /ithNo!"all) coe!s allegations fo! $e>cienc)inco"e ta, lia.ilities3 al*e a$$e$ ta, o!#e!centage ta, lia.ilities

R;O No& 18M2012 $ate$ ;a!ch 23 2012#!oi$es g*i$elines3 #!oce$*!es an$ "ini"iJe#!ocessing ti"e of han$ling LNs


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Thi!$M#a!t) info!"ation$ata "atching #!og!a"sReconciliation of Listing fo!Enfo!ce"ent 9)ste" 9*""a!) List of

9ales an$ 5*!chases @TR9MRELIE R;ONo& 80M2008B*!ea* of C*sto"s Data 5!og!a" @TR9MBOC R;O 8(M200(

Ta, Reconciliation 9)ste" @TR9MLN R;O 2FM200'3 as f*!the! a"en$e$ .)R;O No& 'M2010


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5o/e! to "ae

assess"ents an$ in*i!einto .an $e#osits @9ec& 6

A&E,a"ination of !et*!ns an$assess"ent of ta, $*e ail*!e to >le a !et*!n shall not#!eent the Co""issione! f!o"

a*tho!iJing the e,a"ination of an)ta,#a)e!


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An) !et*!n3 state"ent of $ecla!ation>le$ shall NOT .e +ITHDRA+N

5!oi$e$ +ithin 8 )ea!s f!o" the $ateof s*ch >ling3 the sa"e "a) .e a&;o$i>e$3

.&Change$3 o!c&A"en$e$

5!oi$e$3 f*!the! NO notice fo! AUDIT

o! IN:E9TIGATION of s*ch !et*!n3state"ent o! $ecla!ation has .eenact*all) se!e$ *#on the ta,#a)e!


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A&Assess"ent on B!st !%i"!n$!

otainal!4 a##lies Ta, !e#o!t !e*i!e$ .) la/ fo! the#*!#ose of assess"ent is notaaila.le3 o!

Ta, !e#o!t is inco"#lete o! f!a*$*lent

The la/ allo/s the BIR access to all!eleant o! "ate!ial !eco!$s an$ $ata

in the #e!son of the ta,#a)e!&


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A&A*tho!it) to con$*ct Inento!)Mtaing3s*!eillance an$ #!esc!i.e #!es*"#tieg!oss sales an$ !ecei#ts1O!$e! inento!)Mtaing2Con$*ct s*!eillance3 if the!e is

!eason to .eliee that ta,#a)e! is not$ecla!ing his co!!ect inco"e85!esc!i.e a "ini"*" a"o*nt of g!oss!ecei#ts /hen

@a ta,#a)e! faile$ to iss*e !ecei#ts an$inoicesK@. The!e is !eason to .eliee that the.oos of acco*nts $o not co!!ectl)

!eect $ecla!ations


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I&A*tho!it) to in*i!e into .an $e#osit

acco*nts an$ othe! !elate$ info!"ationhel$ .) >nancial instit*tions

Ban $e#osits can .e e,a"ine$ onl) in thefollo/ing instances

A $ece$ent to $ete!"ine his g!oss estateK An) ta,#a)e! /ho has >le$ an a##lication

fo! co"#!o"ise .ase$ on >nancialinca#acit)K o!

5*!s*ant to an inte!national conention o!ta, ag!ee"ent3 /hich the 5hili##ines is asignato!) @RA 10021


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;a) .an $e#osits .e $isclose$ .) aco""e!cial .an to the Co""issione! of

Inte!nal Reen*e3 in connection /ith ata, inestigation .eing con$*cte$ .)!een*e ocials3 /itho*t iolating the!eleant .an sec!ec) la/s-


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No3 the!e a!e onl) 8 instances /he!einthe CIR "a) in*i!e into the .an

$e#osits of a ta,#a)e!& Disclos*!e in!elation /ith a ta, inestigation is not oneof the instances allo/e$ .) la/&


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In case a ta,#a)e! >les an a##lication to

co"#!o"ise the #a)"ent of his ta,lia.ilities on his clai" that his >nancial#osition $e"onst!ates a clea! ina.ilit) to#a) the ta, assesse$3 his a##lication shall

not .e consi$e!e$ *nless an$ *ntil he'ai%!s in 'ritin*his #!iilege *n$e! RA1(0%3 RA 6(26&

+aie! shall constit*te the a*tho!it) ofthe Co""issione! to in*i!e into the.an $e#osits of the ta,#a)e!&


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Re*est fo! s*##l) of ta, info!"ation

f!o" a fo!eign ta, a*tho!it)R.A. 10021 @ A$t to allo' t! !x$an*! o(in(or,ation ) BIR on tax ,att!rsS!$. 2& An) gene!al o! s#ecial la/

not/ithstan$ing3 an$ fo! the #*!#ose of co"#l)ing/ith the #!oisions on e,change of info!"ationcontaine$ in ta, t!eaties3 CIR is a*tho!iJe$ too.tain an) info!"ation3 incl*$ing .*t not li"ite$ to.an $e#osits an$ othe! !elate$ info!"ation hel$

.) >nancial instit*tions3 as "a) .e !e*i!e$ to!es#on$ to a !e*est .) a t!eat) co*nt!)&S!$. & Once info!"ation is gathe!e$3 BIR islie/ise a*tho!iJe$ to *se3 fo! ta, assess"ent3

e!i>cation3 a*$it an$ enfo!ce"ent #*!#oses3 s*ch


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S!$. 5& Inco"e ta, !et*!ns of s#eci>c ta,#a)e!s

s*.ect of a !e*est fo! e,change of info!"ation .)a fo!eign ta, a*tho!it) shall .e o#en fo! ins#ection*#on the o!$e! of the 5!esi$ent of the 5hil3 *n$e!!*les an$ !eg*lations #!esc!i.e$ .) the 9ec!eta!) of

inance&S!$. 6& An) info!"ation !eceie$ .) fo!eign ta,a*tho!it) f!o" BIR shall .e t!eate$ as a.sol*tel)con>$ential in nat*!e an$ shall .e $isclose$ onl) to#e!sons o! a*tho!ities3 incl*$ing co*!ts an$

a$"inist!atie .o$ies3 inole$ in the assess"ento! collection of3 the enfo!ce"ent o! #!osec*tion in!es#ect of3 o! the $ete!"ination of a##eals in!elation to3 the ta,es coe!e$ .) s*ch conentions

o! ag!ee"ents&

Reen*e Reg*lation No& 10M2010Oct 63 2010


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=es3 R&A& 10021 has a"en$e$ the NIRC toallo/ the CIR to in*i!e into the .an

$e#osits *#on !e*est of a fo!eign ta,inga*tho!it)&


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A*tho!it) to $elegate #o/e! @9ec& '

5o/e!s that cannot .e $elegate$1&To !eco""en$ the #!o"*lgation of!*les an$ !eg*lations .) the 9ec!eta!) ofinanceK

2&To iss*e !*lings of >!st i"#!ession o! to!ee!se3 !eoe o! "o$if) an) e,isting!*ling of the B*!ea*K8&To co"#!o"ise o! a.ate an) ta,

lia.ilit) .*t if 5%003000 o! less3 she can$elegate(&To assign o! !eassign oce! toesta.lish"ents /e!e e,cise ta, a!ticlesa!e #!o$*ce$ o! e#t


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TA< A99E99;ENTIt is an ocial action .) an a$"inist!atieoce! to $ete!"ine the ta, $*e of theta,#a)e!

It consists ofCo"#*tation of the a"o*nt of ta, that"*st .e #ai$ .) the ta,#a)e!Co*#le$ /ith a $e"an$ to #a) the ta,/ithin a s#eci>e$ #e!io$ of ti"e


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Re"e$ies of the

GO:ERN;ENT

A99E99;ENTCOLLECTION


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IND9 O A99E99;ENT

1.S!l(-ass!ss,!nt /hen ta,#a)e!co"#*tes his o/n lia.ilit)3 >les his !et*!n3an$ #a) the ta, .ase$ on his

co"#*tation @9ec& %6PaQ

2.D!$i!n$) ass!ss,!nt occ*!s *#on$iscoe!) of the BIR that the selfM

assess"ent /as eithe! $e>cient3 o! /henno !et*!n /as "a$e .) the ta,#a)e! @9ec&%6P.Q


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5o/e! to iss*e an assess"ent is /ith the

CIR& Ho/ee!3 he can a*tho!iJe an)!een*e oce! to con$*ct anassess"ent&

The!e "*st .e a clea! g!ant of a*tho!it).efo!e a $elegate$ !een*e oce! cancon$*ct an assess"ent& The g!ant ise".o$ie$ in a Lette! of A*tho!it)&

The #e!io$ o! )ea! coe!e$ fo!assess"ent sho*l$ .e s#eci>call)in$icate$ in the Lette! of A*tho!it)&


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The !een*e e,a"ine! /ent .e)on$ the a*tho!it)confe!!e$ .) LOA& A LOA a*tho!iJes o! e"#o/e!s a$esignate$ !een*e oce! to e,a"ine3 e!if) an$sc!*tiniJe a ta,#a)e!s .oos an$ !eco!$s in !elation to hisinte!nal !een*e ta, lia.ilit) fo! a #a!tic*la! #e!io$& TheLOA3 the e,a"ine!s /e!e a*tho!iJe$ to e,a"ine 9on)s.oo of acco*nts an$ othe! acco*nt !eco!$s fo! the #e!io$1' an$ *ne!i>e$ #!io! )ea!s&4 Ho/ee!3 CIRs .asis

fo! $e>cienc) at fo! 1' /as 1F& The) acte$ /itho*ta*tho!it) in a!!iing at the $e>cienc) at assess"ent& Itsho*l$ .e consi$e!e$ /itho*t fo!ce an$ eSect a n*llit)&

A LOA sho*l$ coe! ta,a.le #e!io$ not e,cee$ing 1 )ea!&

The #!actice of iss*ing LOA coe!ing a*$it of *ne!i>e$#!io! )ea!s4 is #!ohi.ite$&

CIR s& 9on) 5hili##ines3 Inc&CTA 03 ;a) 1'3 200'


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Ta,#a)e!s shall .e info!"e$ in /!iting ofthe la/ an$ the facts on /hich theassess"ent is "a$eK othe!/ise3 theassess"ent shall .e oi$& @9ec& 22F

The la/ !e*i!es that the legal an$fact*al .ases of the assess"ent .estate$ in the fo!"al lette! of $e"an$ an$

assess"ent notice3 not in an) othe!$oc*"ent o! #a#e! iss*e$ .) the CIR&


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Notices "a) .e se!e$ in the follo/ing"o$es

1&5e!sonal se!ice @$elie!) to no/n

a$$!essK2&9*.stit*te$ se!ice @leaing notice /ithso"eone at ta,#a)e!s no/n a$$!essK

8&9e!ice .) "ail&


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If the ta,#a)e! >les an a"en$e$ !et*!n/hich is s*.stantiall) $iSe!ent f!o" theo!iginal !et*!n3 the #e!io$ of #!esc!i#tionof the !ight to iss*e the $e>cienc)

assess"ent sho*l$ .e $o#nt!" (ro,t! lin* o( t! a,!n"!" r!t#rn3 an$not the o!iginal !et*!n&

CIR s& 5hoeni, Ass*!ance Co&3 Lt$&3G!& No& LM1'2'3 ;a) 203 16%


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If the ta,#a)e! >les a 'ron* r!t#rn3 it isas tho*gh he >le$ no !et*!n at all& This ist!*e een if all the necessa!) info!"ation/as !eecte$ in the e!!oneo*s !et*!n& In

sit*ations lie this3 the 10-)!ar&r!s$ri&ti%! &!rio"/ill a##l)&

B*t*an 9a/"ill3 Inc& & CA3

G!& No& LM206013 e.!*a!) 2F3 166


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5RE9ER:ATION O BOO9 AND ACCOUNT9AND OTHER ACCOUNTING RECORD9

;*st .e #!ese!e$ fo! 8 )ea!s @last $a)

#!esc!i.e$ .) la/ fo! assess"ent 9ec&28% of NIRC

Reen*e Reg*lation 1'M20183 9e#te".e! 2'32018

Inc!ease$ the #e!io$ fo! #!ese!ation of.oos f!o" 8 )ea!s to 10 )ea!s


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!a*$3 falsit) an$ the i"#osition of10M)ea! #e!io$

!a*$ is a *estion of fact an$ theci!c*"stances constit*ting f!a*$ "*st .eallege$ an$ #!oe$ in co*!t& !a*$ is

nee! lightl) to .e #!es*"e$ .eca*se it isa se!io*s cha!ge& Hence3 if f!a*$ is not#!oen3 the Goe!n"ent cannot *se the10M)ea! #e!io$ to "ae the assess"ent&

CIR & A)ala 9ec*!ities Co!#o!ation3G!& No& LM2(F%3 ;a!ch 813 1'6


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Clai"ing >ctitio*s e,#enses as

$e$*ctions is a #!oof of falsit) o! f!a*$ inthe inco"e ta, !et*!n&

Tan G*an & CTAG!& No& LM286'63 A#!il 2'3 16'+AI:ER of 5RE9CRI5TION @9ec&222

The ta,#a)e! an$ the goe!n"ent "a)

e,ten$ .) "*t*al ag!ee"ent in /!itingthe #!esc!i#tie #e!io$ fo! theassess"ent an$ collection of ta,es&

The !e*isites of ali$


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The !e*isites of ali$/aie!

1&The /aie! "*st .e in #!o#e! fo!"@R;O 20M0K

2&The /aie! "*st .e signe$ .) theta,#a)e! hi"self of his $*l) a*tho!iJe$!e#!esentatieK

Delegation of a*tho!it) "*st .e in

/!iting an$ $*l) nota!iJe$K8&The /aie! "*st .e $*l) nota!iJe$K


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1&The CIR o! the !een*e ocial a*tho!iJe$

.) hi" "*st sign the /aie! in$icating theBIRs acce#tance an$ ag!ee"ent to the/aie!& The $ate of s*ch acce#tance .) theBIR sho*l$ .e in$icate$K

2&Both the $ate of e,ec*tion .) the ta,#a)e!an$ the $ate of acce#tance .) the BIR sho*l$.e #!io! to the e,#i!ation of the #e!io$ of

#!esc!i#tion o! .efo!e the la#se of the #e!io$ag!ee$ *#on in case a s*.se*entag!ee"ent is e,ec*te$K


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Inte!est @9ec& 2(

in$s of inte!est1&Gene!al inte!est2&De>cienc) inte!est

8&Delin*enc) inte!estK an$(&E,ten$e$ #a)"ent inte!est&

Rate 20 #e! ann*"


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R*les on Assess"ent of the NIRC3 Ciil5enalties an$ Inte!est@RR 12M

Richie Rich fo!got to >le on A#!il 1%& He>le$ on *ne 80&

5enalties2% s*!cha!ge fo! late >ling20 gene!al inte!est f!o" $*e $ate *# toti"e #ai$

A"o*nt to .e #ai$TA< DUE9 2% s*!cha!ge 20inte!est


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Richie Rich is haing a acation3 he #ai$on A#!il 1% in Bo!aca)& He $i$ not .othe!to >le in Iloilo Cit) his !egiste!e$ RDO&

5enalties2% s*!cha!ge fo! /illf*l neglectNO INTERE9T #ai$ on ti"e

A"o*nt to .e #ai$

TA< DUE9 2% s*!cha!ge


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Richie Rich >le$ his !et*!n on A#!il 1% an$ #ai$5103000& He $i$nt ca!e *ntil a $e"an$ lette! /as

sent to hi" .) the BIR to #a) .) *ne 80& He #ai$ on*ne 80& U#on #!eMa*$it3 it /as $iscoe!e$ that the!e/as an e!!o! in co"#*tation& The co!!ect a"o*nt$*e is 5203000& He /as assesse$ $e>cienc) inco"eta, in a lette! $e"an$ an$ assess"ent notice3 the

telling hi" to #a) .) *ne 80& He $i$&

5enalties20 gene!al inte!est f!o" $*e $ate *# to ti"e#ai$

A"o*nt to .e #ai$TA< DUE9 20 inte!est


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C!i"inal action

No c!i"inal action fo! the !ecoe!) ofta,es shall .e >le$ /itho*t the a##!oalof the CIR

Ac*ittal of ta,#a)e! in a c!i"inal case$oes not e,one!ate hi" f!o" ta, lia.ilit)

The c!i"e is co"#lete /hen the iolato!

has no/ingl) an$ /illf*l) >le$ af!a*$*lent !et*!n o! neglecte$ to >le a!et*!n /ith intent to ea$e the ta,


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+illf*l .lin$ness $oct!ine

A ta,#a)e! can no longe! !aise the$efense that the e!!o!s on thei! ta,!et*!ns a!e not thei! !es#onsi.ilit) o! thatit is the fa*lt of the acco*ntants the)

hi!e$&The onl) thing that nee$s to .e #!oen isthat the ta,#a)e! /as a/a!e of his

o.ligation to >le the ta, !et*!n .*t henee!theless ol*nta!il)3 no/ingl)3 an$intentionall) faile$ to >le the !e*i!e$!et*!ns&

5eo#le s& intana!3 an*a!) 163 2018


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5!esc!i#tion in C!i"inal Cases

5!esc!i#tie #e!io$ % )ea!s

ail*!e to !ef*sal to #a) ta,es $*e f!o"the se!ice of >nal notice an$ $e"an$ fo!

#a)"ent of the $e>cienc) ta,es

iling of false o! f!a*$*lent !et*!ns f!o"the $iscoe!) an$ instit*tion of *$icial

#!ocee$ings fo! its inestigation an$#*nish"ent


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CRI;INAL CA9E95a)"ent of ta, $*e afte! a##!ehensionshall not constit*te a ali$ $efense in an)#!osec*tion

9ec& 2%( to 9ec& 26F iolations .)ta,#a)e!s9ec& 26 to 9ec& 2'8 iolations .)

goe!n"ent oce!s9ec& 2'( to 2F0 othe! #enal #!oisions


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COLLECTIONThe goe!n"ent can onl) >le a

#!ocee$ing in co*!t to collect once theassess"ent has .eco"e fnal andunappealable@9ec& 208

E,ce#tion1&alse o! f!a*$*lent !et*!n /ith intent toea$e ta,2&ail*!e to >le a !et*!n

Collection "a) .e >le$ /itho*tassess"ent at an) ti"e /ithin 10 yearsf!o" the $iscoe!) of the falsit)3 f!a*$3 o!

o"ission& @9ec& 222PaQ


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Re"e$ies fo! Collection of ta,es

1.A",inistrati%! R!,!"i!s Dist!aint of #e!sonal #!o#e!t) Le) of !eal #!o#e!t)

Enfo!ce"ent of fo!feit*!e of #!o#e!t) Enfo!ce"ent of ta, lien Re*i!ing of >ling of .on$s Re*i!ing #!oof of >ling inco"e ta,

!et*!ns De#o!tation of aliens Ins#ection of .oos of acco*nts


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2. C#"i$ial R!,!"i!s

O!$ina!) ciil action C!i"inal action

Distraint seiJ*!e .) the goe!n"ent of

#e!sonal #!o#e!t)3 tangi.le o! intangi.le3to enfo!ce the #a)"ent of ta,es to .efollo/e$ .) its #*.lic sale if the ta,es a!enot ol*nta!il) #ai$


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70/119

:!%) a s*""a!) a$"inist!atie!e"e$)3 seiJ*!e of !eal #!o#e!t) toenfo!ce #a)"ent of ta,es

A /!itten notice of le)3 containing a$esc!i#tion of the #!o#e!t) *#on /hichle) is "a$e3 the na"e of the ta,#a)e!an$ the a"o*nts of the ta, an$ #enalt)

$*e f!o" the" is se!e$ *#on theta,#a)e!


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;or!(!it#r! a $iestit*!e o! #!o#e!t)/itho*t co"#ensation3 in conse*ence ofa $efa*lt o! oSense&


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R!#irin* t! lin* o( on"s "a) .e!e*i!e$ .) the BIR fo! iss*ance of ta,clea!ance

D!&ortation o( ali!ns an) alien /ho1&no/ingl) an$ f!a*$*lentl) ea$es the#a)"ent of an) inte!nal !een*e ta,K o!2&+illf*ll) !ef*ses to #a) s*ch ta, an$ its

accesso!) #enalties afte! the $ecision onthe ta, lia.ilit)


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Co"#!o"ise an$ a.ate"ent

A*tho!it) of CIR to co"#!o"ise an$a.ate ta, lia.ilities cannot .e $elegate$

E,ce#tion1&o! assess"ents iss*e$ .) the !egionaloces inoling .asic $e>cienc) ta,es of

5%003000 o! lessK an$2&;ino! c!i"inal iolations

Re"e$) to .oth the goe!n"ent an$ta,#a)e!


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Cases /hich "a) .e co"#!o"ise$ a!e

1&Delin*ent acco*ntsK2&5en$ing a$"inist!atie cases *n$e!a$"inist!atie #!otest afte! iss*ance of>nal assess"ent notice to the ta,#a)e!K8&Ciil ta, cases .eing $is#*te$ .efo!ethe co*!tsK(&Collection cases >le$ in co*!tsK

%&C!i"inal iolation M e,ce#t@a al!ea$) >le$ in co*!t@. inoling c!i"inal ta, f!a*$


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A.ate"ent an$ cancellation of ta,lia.ilit) @9ec& 20(

G!o*n$s

1&Ta,es o! an) #o!tion the!eof a##ea!s to

.e *n*stl) o! e,cessiel) assesse$K o!2&The a$"inist!ation an$ collection costsinole$ $o not *stif) the collection of

the a"o*nt $*e&


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5!esc!i#tie #e!io$ fo! collection

Gen& R*le 5 years f!o" the $ate ofassess"ent

E,ce#tions1.;als! an" (ra#"#l!nt r!t#rn /ithintent to ea$e ta,es 10 )ea!s f!o"$iscoe!) /itho*t nee$ fo! #!io!assess"ent

2.;ail#r! or o,ission to l! a r!t#rn 10 )ea!s f!o" $iscoe!) /itho*t nee$ fo!assess"ent.Fai%!r in 'ritin*e,ec*te$ .efo!e the

%M)ea! #e!io$ e,#i!es


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RES


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9*s#ension of !*nning of stat*te of

li"itations @9ec& 228G!o*n$s

1&+hen the CIR is #!ohi.ite$ f!o" "aingan assess"ent o! .eginning $ist!aint an$le) o! a #!ocee$ing in co*!t an$ fo! 60$a)s the!eafte!

2&The ta,#a)e! !e*ests fo!!einestigation /hich is g!ante$ .) theCIR


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REI9?ESTI=ATIO9 RE


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1&+hen the ta,#a)e! cannot .e locate$ in

the a$$!ess gien .) hi" in the !et*!n>le$ *#on /hich a ta, is .eing assesse$o! collecte$

2&+hen the /a!!ant of $ist!aint an$ le)is $*l) se!e$ *#on the ta,#a)e!3 hisa*tho!iJe$ !e#!esentatie an$ no #!o#e!t)co*l$ .e locate$

8&+hen the ta,#a)e! is o*t of the5hili##ines

T5 >les a


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ILING OTA< RETURN

I99UANCE O5AN

BIR >n$s$e>cienc)

T5 has 1%

$a)s to!es#on$

I99UANCE OLDAN

T5 has

80$a)s to#!otest

5ROTE9TLETTER

T5 has 60 $a)sf!o" #!otest

lette! tos*."it

s*##o!ting$oc*"ents

@!einestigation

BIR Denial@!e#!esentatie

CIR

CTA

+ait fo! the

$ecision of BIR

80 $a)s f!o"the $enial o!

afte! 1F0$a)s ofinaction

Denial

a##eal


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Re"e$ies of the

TA


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DEINITION3 NATURE AND

EECT1.Tax Ass!ss,!nt @ a >n$ing .) the ta,a*tho!it) that the ta,#a)e! has not #ai$the co!!ect ta,es3 a /!itten notice to a

ta,#a)e! to the eSect that the a"o*ntstate$ is $*e as a ta, an$ containing a$e"an$ fo! the #a)"ent the!eof


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1.Tax A#"it @ a s)ste"atic !eie/ of anin$ii$*als o! an o!ganiJations acco*nt&

The #!ocess of e,a"ining3 going oe!3 o!sc!*tiniJing the .oos an$ !eco!$s of theta,#a)e!& It can onl) .e #e!fo!"e$ *#on aLette! of A*tho!it) iss*e$ .) the

Co""issione!

2.:!tt!r o( A#torit) M an ocial$oc*"ent that e"#o/e!s a !een*e oce!

to e,a"ine an$ sc!*tiniJe a ta,#a)e!s.oos of acco*nts an$ othe! acco*nting!eco!$s3 in o!$e! to $ete!"ine the ta,#a)e!sco!!ect inte!nal !een*e ta, lia.ilities


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1.r!-ass!ss,!nt noti$! @ aco""*nication iss*e$ .) the Regional

Assess"ent Diision3 o! an) conce!ne$ BIRoce info!"ing a ta,#a)e! /ho has .eena*$ite$ of the >n$ings of the Reen*eOce! follo/ing a !eie/ of these >n$ings

2.;inal ass!ss,!nt noti$! a noticegien to the ta,#a)e! .) the BIR info!"inghi" of the a"o*nt of $e>cienc) ta, fo!

/hich the ta,#a)e! is .eing assesse$ on the>n$ings of the BIR *#on fail*!e of theta,#a)e! to !es#on$ to a 5AN o! afte! ane,a"ination has .een con$*cte$


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1.C!o&ar") ass!ss,!nt ta, assess"ent"a$e .) an a*tho!iJe$ Reen*e Oce!

/itho*t the .ene>t of co"#lete o! #a!tiala*$it3 in light of the ROs .elief that theassess"ent an$ collection of a $e>cienc)ta, /ill .e eo#a!$iJe$ .) $ela) ca*se$ .)

ta,#a)e!s fail*!e to Co"#l) /ith a*$it an$ inestigation

!e*i!e"ents to #!esent his .oos ofacco*nts an$o! #e!tinent !eco!$sK o!

9*.stantiate all o! an) of the $e$*ctions3e,e"#tions o! c!e$its clai"e$ in his!et*!n


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1.D!$i!n$) an" "!lin#!n$)

DE:I9G>E9T DE;Ile$ .) theta,#a)e! on the

#!esc!i.e$ $ate /asnot #ai$ at all o!#a!tiall) #ai$

2&De>cienc) ta,assesse$ .) the BIR

.eca"e >nal an$e,ec*to!)

1&A"o*nt .) /hich the ta,i"#ose$ .) la/ e,cee$sthe a"o*nt sho/n as ta,.) the ta,#a)e! *#on his

!et*!nK o!2&If no a"o*nt is sho/ as

the ta, .) the ta,#a)e!*#on his !et*!n o! if no!et*!n is "a$e .) the

ta,#a)e!3 then the a"o*nt/hich the ta, as$ete!"ine$ .) the CIR o!!e#!esentatie e,cee$sthe a"o*nts #!eio*sl)assesse$


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DE:I9G>E9lingthe #!otest against theassess"ent an$ the $enialof s*ch #!otest .) the BIR

The >ling of a ciil action fo!the collection in theo!$ina!) co*!t is a #!o#e!!e"e$)

iling of a ciil action at theo!$ina!) co*!t fo! thecollection of a $e>cienc) ta,$*!ing #en$enc) of #!otest"a) .e the s*.ect of a

"otion to $is"iss9*.ect to a$"inist!atie#enalties s*ch as 2%s*!cha!ge3 inte!est an$co"#!o"ise #enalt)

Gene!all) not s*.ect to the2% s*!cha!ge altho*ghs*.ect to inte!est an$co"#!o"ise #enalt)


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5ROTE9TING AN A99E99;ENT

@RE;ED= BEORE 5A=;ENTSt!& on! Iss*ance of the 5!eli"ina!)Assess"ent Notice @5AN

Ta,#a)e! is gien 1% $a)s f!o" !ecei#t of 5AN to!es#on$

If he $oesnt !es#on$ @$efa*lt o!"al Lette!of De"an$ an$ inal Assess"ent Notice

@LDAN shall .e iss*e$ If he !es#on$s3 a LDAN /ill .e iss*e$

/ithin 1% $a)s f!o" the >lings*."ission ofthe ta,#a)e!s !es#onse


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5REMA99E99;ENT NOTICE

5-Da) :!tt!r 9igne$ .) the Reen*e Dist!ict Oce! Gies ta,#a)e! the o##o!t*nit) to e,#lain in

/!iting his #osition on the >n$ings of !een*eoce!sK othe!/ise3 >n$ings /ill .e consi$e!e$

as co!!ect an$ !e#o!t /ill .e fo!/a!$e$ toChief3 Assess"ent Diision15-Da) :!tt!r

9igne$ .) the Chief3 Assess"ent Diision o!Regional Di!ecto!

Gies ta,#a)e! the o##o!t*nit) to e,#lain in/!iting his #osition on the >n$ings of !een*eoce!sK othe!/ise3 >n$ings /ill .e consi$e!e$as co!!ect an$ AN /ill .e iss*e$


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The sen$ing of 5AN to ta,#a)e! to info!"hi" of the assess"ent "a$e is .*t #a!tof the $*e #!ocess !e*i!e"ent in theiss*ance of a $e>cienc) ta, assess"ent34

the a.sence of /hich !en$e!s n*gato!)an) assess"ent "a$e .) the ta,a*tho!ities

CIR & ;et!o 9ta! 9*#e!a"a3 Inc&3G!& No& 1F%8'13 Dece".e! F3 2010


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+hen a 5AN is not nee$e$ an$ LDANcan .e iss*e$ o*t!ight

1&An) $e>cienc) ta, is the !es*lt of,at!,ati$al !rror in t! $o,tation ofthe ta, ei$ent on the face of the !et*!n

2.Dis$r!&an$) .et/een the ta, /ithhel$ an$the a"o*nt act*all) !e"itte$ .) the /ithhol$ingagent8&Ta,#a)e! o#te$ to $lai, a r!(#n" or tax$r!"it (or !x$!ss $r!"ital! 'itol"in*

taxca!!ie$ it oe! an$ a*to"aticall) a##lie$ thea"o*nt clai"e$ against the esti"ate$ ta,lia.ilities fo! the ta,a.le *a!te! of thes*ccee$ing ta,a.le )ea!


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1&E,cise ta, $*e on e,cisa.le a!ticles hasnot .een #ai$

2&+hen an a!ticle locall) #*!chase o!

i"#o!te$ .) an e,e"#t #e!son has .eensol$3 t!a$e$ o! t!ansfe!!e$ to a nonMe,e"#t #e!son

RE5L= TO 5AN


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RE5L= TO 5ANFE9 TO ;I:E RE:H

+ithin 1% $a)s f!o" $ate of !ecei#t of 5AN E,tension o! f*!the! e,tension "a) .e !e*este$

f!o" BIR


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St!& t'o Iss*ance of the o!"al Lette!De"an$ an$ inal Assess"ent Notice

@LDAN:E=A: E;;EA9nal an$ e,ec*to!) Ta,#a)e! $oes not hae to #a) the $e>cienc) ta,

assess"ent3 .*t "!$i!n$) int!r!st sallstart to r#n (ro, "at! t! tax 'as "#! #&

to "at! o( &a),!nt B*siness of ta,#a)e! $oes not .eco"e illegal .)

!eason of nonM#a)"ent of $e>cienc) ta,3 *nlielocal .*siness ta,es


98/119

ESSE9TIA: REG>IREME9TS ;A9 7BIR ;ORM 1J.0K8 $ontains na,! a""r!ss

an" TI9L in" o( taxL &!rio" $o%!r!"L asi$ taxan" &!nalti!sL "at! tax ,#st ! &ai" ;A9 an" "!,an" l!tt!r ,#st stat! (a$ts la' or/#ris&r#"!n$!L ot!r'is! ass!ss,!nt is %oi" (CIRv. Enron Subic Power Corporation, G.R. No. 166387, Jan.1, !""#

Tax&a)!r 'as (airl) in(or,!" sin$! it 'as al!

to $at!*ori$all) !x&lain o' ass!ss,!nt $a,!ao#t ($o%e&o Power Co. v'. CIR#

A9 as a#"it s!!t #t "i" not !x&lain o'ass!ss,!nt 'as arri%!". D!,an" l!tt!r "i"not $ontain t! in(or,ation on la' an" (a$ts(PC) *+ri&ev Corp v'. CIR#

Si*n!" )


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100/119


101/119

The #!otest "*st state the follo/ing

1&Nat*!e of the #!otest @!econsi$e!ationo! !einestigationK

2&Date of the LDANK an$

8&A##lica.le !*les3 la/3 etc&

.If the #!otest lacs an) of these3 it shall.e consi$e!e$ ?OID an$ /itho*t fo!cean$ eSect

REG>EST ;OR REI9?ESTI=ATIO9


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REG>EST ;OR REI9?ESTI=ATIO9

9*."it all !eleant s*##o!ting $oc*"entsf!o" 60 $a)s f!o" the $ate of the >ling of hislette! of #!otest

5e!io$ to $eci$e CIR "*st $eci$e /ithin 1F0

$a)s f!o" the s*."ission of !eleant$oc*"ents

CIR "a) eithe! @a $en) o! @. inaction /ithin

1F0 $a)s f!o" >ling of #!otest@!econsi$e!ation o! s*."ission of ne/l)M$iscoe!e$ ei$ence /ithin 60 $a)s@!einestigation


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REMEDH O; TAXAHER I; ROTEST ISDE9IED

If #!otest is DENIED1&B) the


104/119

If CIR fails to act on the #!otest /ithin1F0 $a)s

1&A##eal to CTA /ithin 80 $a)s afte! thela#se of 1F0 $a) #e!io$K o!2&+ait fo! CIRs $ecision

O#tion is g!ante$ to the ta,#a)e!K hence3the CIR cannot state that the a##eal tothe CTA is late if the ta,#a)e! chooses to/ait fo! the >nal $ecision3 een if it is

.e)on$ the 1F0 $a) #e!io$& Lascona Lan$ Co& Inc& & CIR G&R& No&3 1'12%13 ;a!ch %3 2012


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106/119

CLAI;ING OR REUND AND

CREDIT O TA9D act*al !ei".*!se"ent ofthe ta,

TAX cation against an) s*" that "a) .e$*e an$ collecti.le f!o" the ta,#a)e!


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TAX RE;>9D TAX


108/119

Instan$!s '!n a $lai, (or r!(#n"

,a) ! a%ail!" o(

1&E!!oneo*sl) o! illegall) assesse$ o!collecte$ inte!nal !een*e ta,esK

2&5enalties i"#ose$ /itho*t a*tho!it)K o!

8&An) s*" allege$ to hae .een

e,cessie o! in an) "anne! /!ongf*ll)collecte$&


109/119

+hen to >le ile$ 'itin 2 )!arsafte!

the #a)"ent of ta, o! #enalt)Gene!al R*le T/oM)ea! #!esc!i#tie#e!io$ is ,an"ator)3 afte! the la#se ofthe t/oM)ea! #e!io$3 the!e can no longe!.e #!ocee$ings fo! !ef*n$

E,ce#tion1&+hen the ta,#a)e! an$ the goe!n"ent

ag!ee to /ait fo! the o*tco"e of a case


110/119

Gene!al R*le T/oM)ea! #!esc!i#tie#e!io$ !*ns f!o" the &a),!nt o( t!tax

E,ce#tion1&Oe!#ai$ #art!rl) $or&orat!

in$o,! tax afte! a >nal a$*st"ent!et*!n is acco"#lishe$2&Oe!#ai$ 'itol"in* tax!s en$ ofthe ta,a.le )ea!.lingof ta,#a)e!s >nal a$*st"ent !et*!n(&Ta, #ai$ in install,!nts $ate of

#a)"ent of the last install"ent


111/119

Ho/ to >le

1&iling a +RITTEN clai" fo! c!e$it o!!ef*n$

It "*st .e >le$ /ithin the #e!io$ 9*.stantie .asis in la/K an$ Doc*"ents to s*##o!t o! s*.stantiatethe clai"

+he!e to >le CIR @a$"inist!atie o! CTA @*$icial

ADMI9ISTRATI?E 9D7BIR8


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A !et*!n >le$ sho/ing oe!#a)"ent shall .econsi$e!e$ as a /!itten clai"

Doc*"ents to s*##o!t a clai" fo! !ef*n$ isnecessa!) .eca*se a c%ai/ 0or re0un&cre&it

parta2e' o0 t-e nature o0 an ee/ptionan$

is st!ictl) const!*e$ against the clai"ant&

CIR can !ef*n$ +ITHOUT a /!itten clai"/hen on the face of the !et*!n *#on /hich#a)"ent /as "a$e3 s*ch #a)"ent a##ea!sclea!l) to hae .een e!!oneo*sl) #ai$


113/119

C>DIle an a##eal /ith the CTA3 /itho*ta/aiting the $ecision of the CIR

RE;>9D OR


114/119

RE;>9D OR le$ if thes*" of the *a!te!l) ta, #a)"ents "a$e

$*!ing ta,a.le )ea! is 9OT EG>A: to thetotal ta, $*e of the enti!e ta,a.le inco"eof that )ea!

V*a!te!l) inco"e ta, #a)"ents is :ESSTHAN the ann*al inco"e ta, $*e 7GT ATD85a) the .alance of the ta, still $*e


115/119

V*a!te!l) inco"e ta, #a)"ents is

MORETHAN the ann*al inco"e ta, $*e7GT N ATD8 ta,#a)e! can eithe!

1&ile fo! a TAX RE;>9DK o!

2&Aail a TAX


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Ho/ to choose .) "a!ing the

co!!es#on$ing o#tion .o, #!oi$e$ in theinal A$*st"ent Ret*!n@AR

ail*!e to signif) ones intention in the

AR $oes not "ean o*t!ight .a!!ing of aali$ !e*est fo! a !ef*n$


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A?E A =REATDAH

ATTH. BRIA99A AH A.TE9E;RA9

tax remedies under the nirc [repaired]

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