2010 BAR EXAMINATION QUESTION

TAXATION LAW

12 September 2010

2 P.M 5 P.M.

INSTRUCTIONS This questionnaire is in TWO (2) PARTS: Part I with nine (9) questions (numbered I to IX), ontained in !i"e (#) $a%es& and Part II with nine (9) questions (numbered X to X'III), ontained in si( ()) $a%es, !or a tota* number o! e*e"en (++) $a%es, Write -our answers to Part I and Part II in the orres$ondin% $ortions indi ated in the boo.*et, /e%in -our answer to ea h numbered question on a se$arate $a%e& an answer to a sub0question1s under the same number ma- be written ontinuous*- on the same $a%e and su eedin% $a%es unti* om$*eted, Answer the questions dire t*- and on ise*-, 2o not re$eat the question, Write *e%ib*-, 3A42 I4 5O6R 4OT7/OO8 WIT3 T3IS 967STIO44AIR7 :OO2 ;6<8=== >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> CONCHITA CARPIO MORALES <3AIRP7RSO4 2?+? /AR 7XA@I4ATIO4S <O@@ITT77

P;7AS7 <37<8 T3AT T3IS S7T <O4TAI4S 7;7'74 (++) PA:7S (I4<;62I4: T3IS PA:7),

WAR4I4:: 4OT AOR SA;7 OR 64A6T3ORIB72 6S7

CIVIL LAW
PART I I

True or Fa !e. a, b, In i"i* ases in"o*"in% the o**e tion o! interna* re"enue ta(es, $res ri$tion is onstrued stri t*a%ainst the %o"ernment and *ibera**- in !a"or o! the ta($a-er, (+C) In rimina* ases in"o*"in% ta( o!!enses $unishab*e under the 4ationa* Interna* Re"enue <ode (4IR<), $res ri$tion is onstrued stri t*- a%ainst the %o"ernment, (+C) In rimina* ases where the <ourt o! Ta( A$$ea*s (<TA) has e( *usi"e ori%ina* Durisdi tion, the ri%ht to !i*e a se$arate i"i* a tion !or the re o"er- o! ta(es ma- be reser"ed, (+C) Pro eedin%s be!ore the <TA in the e(er ise o! its e( *usi"e ori%ina* Durisdi tion are in the nature o! tria* de novo, (+C) Eud%ments, reso*utions or orders o! the Re%iona* Tria* <ourt in the e(er ise o! its original Durisdi tion in"o*"in% rimina* o!!enses arisin% !rom "io*ations o! the 4IR< are a$$ea*ab*e to the <TA, whi h sha** hear the ases en banc, (+C) II a, b, , d, What is the Fall events testFG 7($*ain brie!*-, (2C) What is the Fimmediacy testFG 7($*ain brie!*-, (2C) What is the Frational basisF testG 7($*ain brie!*-, (2C) What is the e!!e t o! the e(e ution b- a ta($a-er o! a Fwai"er o! the statute o! *imitationsF on his de!ense o! $res ri$tionG (2C) What is the basis !or the om$utation o! business ta( on ontra tors under the ;o a* :o"ernment <odeG (2C) 3ow are retirin% businesses ta(ed under the ;o a* :o"ernment <odeG (2C) III I" On @ar h +?, 2?+?, <ontinenta*, In , re ei"ed a $re*iminar- assessment noti e (PA4) dated @ar h +, 2?+? issued b- the <ommissioner o! Interna* Re"enue (<IR) !or de!i ien - in ome ta( !or its ta(ab*e -ear 2??H, It !ai*ed to $rotest the PA4, The <IR thereu$on issued a !ina* assessment noti e (AA4) with *etter o! demand on A$ri* I?, 2?+?, The AA4 was re ei"ed b- the or$oration on @a- +?, 2?+?, !o**owin% whi h or on @a- 2#, 2?+?, it !i*ed its $rotest a%ainst it, The <IR denied the $rotest on the %round that the assessment had a*read- be ome !ina* and e(e utor-, the or$oration ha"in% !ai*ed to $rotest the PA4, Is the <IR orre tG 7($*ain, (#C) " 2oes the <ourt o! A$$ea*s ha"e the $ower to re"iew om$romise a%reements !or%ed b- the <ommissioner o! Interna* Re"enue and a ta($a-erG 7($*ain, (#C)

d,

e,

e,

!,

"I /ased on the A!!ida"it o! the <ommissioner o! Interna* Re"enue (<IR), an In!ormation !or !ai*ure to !i*e in ome ta( return under Se tion 2## o! the 4ationa* Interna* Re"enue <ode (4IR<) was !i*ed b- the 2e$artment o! Eusti e (2OE) with the @ani*a Re%iona* Tria* <ourt (RT<) a%ainst XX, a @ani*a resident, XX mo"ed to quash the In!ormation on the %round that the RT< has no Durisdi tion in "iew o! the absen e o! a !orma* de!i ien - ta( assessment issued b- the <IR, Is a $rior assessment ne essar- be!ore an In!ormation !or "io*ation o! Se tion 2## o! the 4IR< ou*d be !i*ed in ourtG 7($*ain, (JC) "II What are the onditions that must be om$*ied with be!ore the <ourt o! Ta( A$$ea*s ma- sus$end the o**e tion o! nationa* interna* re"enue ta(esG (IC) "III What is the ru*e on a$$ea* !rom de isions o! the <o**e tor o! <ustoms in $rotest and seiKure asesG When is the de ision o! the <o**e tor o! <ustoms a$$ea*ab*e to the <ourt o! Ta( A$$ea*sG 7($*ain, (#C) I# On @a- +#, 2??9, ;a @an%a Tradin% <or$oration re ei"ed a de!i ien - business ta( assessment o! P+,#??,???,?? !rom the Pasa- <it- Treasurer, On Eune I?, 2??9, the or$oration ontested the assessment b- !i*in% a written $rotest with the <it- Treasurer, On O tober +?, 2??9, the or$oration re ei"ed a o**e tion *etter !rom the <it- Treasurer, drawin% it to !i*e on O tober 2#, 2??9 an a$$ea* a%ainst the assessment be!ore the Pasa- Re%iona* Tria* <ourt (RT<), a, b, Was the $rotest o! the or$oration !i*ed on timeG 7($*ain, (IC) Was the a$$ea* with the Pasa- RT< !i*ed on timeG 7($*ain, (IC) PART II # True or Fa !e. $1% ea&'( a, The Ta( <ode a**ows an indi"idua* ta($a-er to $a- in two equa* insta**ments, the !irst insta**ment to be $aid at the time the return is !i*ed, and the se ond on or be!ore Eu*- +# o! the same -ear, i! his ta( due e( eeds P2,???, #I #II

Aerremaro, In ,, a manu!a turer o! hand ra!ted shoes, maintains its $rin i$a* o!!i e in <ubao, 9ueKon <it-, It has bran hes1sa*es o!!i es in <ebu and 2a"ao, Its !a tor- is *o ated in @ari.ina <it- where most o! its wor.ers *i"e, Its $rin i$a* o!!i e in 9ueKon <it- is a*so a sa*es o!!i e, Sa*es o! !inished $rodu ts !or a*endar -ear 2??9 in the amount o! P+? mi**ion were made at the !o**owin% *o ations: i) ii) iii) <ebu bran h 2a"ao bran h 9ueKon <it- bran h Tota* 2#C +#C )?C +??C

Where shou*d the a$$*i ab*e *o a* ta(es on the shoes be $aidG 7($*ain, (IC) #III X5B Shi$$in% <or$oration is a bran h o! an internationa* shi$$in% *ine with "o-a%es between @ani*a and the West <oast o! the 6,S, The om$an-Ls "esse*s *oad and un*oad ar%oes at the Port o! @ani*a, a*beit it does not ha"e a bran h or sa*es o!!i e in @ani*a, A** the bi**s o! *adin% and in"oi es are issued b- the bran h o!!i e in @a.ati whi h is a*so the om$an-Ls $rin i$a* o!!i e, The <it- o! @ani*a ena ted an ordinan e *e"-in% a 2C ta( on %ross re ei$ts o! shi$$in% *ines usin% the Port o! @ani*a, <an the <it- :o"ernment o! @ani*a *e%a**- im$ose said *e"- on the or$orationG 7($*ain, (IC) #I" A inherited a two0store- bui*din% in @a.ati !rom his !ather, a rea* estate bro.er in the M)?s, A %rou$ o! Tibetan mon.s a$$roa hed A and o!!ered to *ease the bui*din% in order to use it as a "enue !or their /uddhist ritua*s and eremonies, A a e$ted the renta* o! P+ mi**ion !or the who*e -ear, The !o**owin% -ear, the <it- Assessor issued an assessment a%ainst A !or non0$a-ment o! rea* $ro$ertta(es, Is the assessor Dusti!ied in assessin% ALs de!i ien - rea* $ro$ert- ta(esG 7($*ain, (IC) #" #"I #"II #"III NOTHING FOLLOWS.