Professional Documents
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Remedies Available To Taxpayer Before and After Payment of Taxes
Remedies Available To Taxpayer Before and After Payment of Taxes
Appeal to the CTA Division within 30 days form receipt of decision on the protest
or from the lapse of 180 days due to inaction of the Commissioner otherwise it will
be final and executory.
Appeal to the CTA en Banc within 15 days from the receipt of the decision of CTA
dicision via petition for review.
Appeal to the SC within 15 days from the receipt of the decision of the CTA under
Rule 45.
Action to contest forfeiture of chattel, at any time before the sale or destruction
thereof;
Action for damages gainst RO by reason of any act done in the performance of his
office.
Injunction to be issued by the CTA if the collection may jeopardize the interest of
the govcernment or the taxpayer.
3. Substantive remedies.
General Rule: No court shall have the authority to grant an injunction to restrain the
collection of any national internal revenue tax, fee or charge imposed by the NIRC.
[Section 218, NIRC]
Exception: CTA may suspend or restrain the collection of the tax when, in its opinion,
the collection of the tax may jeopardize the interest of the government and/or the
taxpayer. [Section 11, RA 1125]
a. That the collection of the tax may jeopardize the interest of the government and/or
the taxpayer.
b. That the taxpayer is willing to deposit the amount equal to the taxes assessed or to
file a bond amounting to not more than twice the value of the tax being assessed.
c. That the CTA may issue an injunction only in the exercise of its appellate
jurisdiction.
For individual. It shall be filed on or before the 15 th day of April of each year
covering income for the preceding taxable year; except when April 15 falls on
Saturday, Sunday or non-working holidays, the return shall be filed in the next
working holiday and unless the Commissioner, in meritorious cases, grant a
reasonable extension of time for filing of ITR.
For corporation. A corporation may employ either calendar year or fiscal year as
basis for filing its ITR. Provided, that it will not change the accounting period
employed without prior approval of the Commissioner. The corporate quarterly
declaration shall be filed within 60 days following the close of each of the first 3
quarters of the taxable year.
Fiscal year.On or before the the 15th day of the 4th month following the close of the
fiscal year, as the case maybe.
1. Assessments are prima facie presumed correct and made in good faith.
a. Post-reporting notice or notice for an informal conference after the tax audit.
c. The taxpayers shall be informed in writing of the law and the facts upon
which the assessment is made.
a. Expenditure method
b. Percentage method
c. Unit and value method
Kinds of assessment
1. Self assessment
2. Deficiency assessment
4. Erroneous assessment
Self assessment
One in which the tax is assessed by the taxpayer himself.
The amount of tax is reflected in the tax return that is filed by him and the tax
assessed is paid at the time he files the return. This system of filing of return and
payment of tax is known as the pay-as-you-file system.
Deficiency assessment
This is an assessment made by the tax assessor himself whereby the correct amount of
the tax is determined after an examination or investigation is conducted.
The liability is determined and is thereafter assessed for the following reasons:
1. The amount ascertained exceeds that which is shown as the tax by the
taxpayer in his return;
This is an assessment wherein the tax assessor has no power to act at all. Erroneous
assessment
Erroneous assessment
This is an assessment wherein the assessor has the power to assess but errs in the exercise
of the power.
Deficiency is the amount still due and collectible from a taxpayer upon audit or
investigation while Delinquency is the failure of the taxpayer to pay the tax due on
the date fixed by law or indicated in the assessment notice or letter of demand.
The law allows the BIR access to all relevant or material records or data in the
person of the taxpayer. It places no limit or condition on the type or form or
medium by which the record subject of the order of the BIR is kept.(CIR vs. Hantex
Trading Co., Inc.)
The purpose of the law is to enable the BIR to get at the taxpayers records in
whatever form they may be kept. Ibid.
The Tax code does not provide for a prescriptive period for the collection of
taxes under sec 203.
1st View: 5 years from final assessment for normal assessment. (Sababan Taxation
Law review 2008 p. 182)
2nd View: Within 3 years form the isuuance of an assessment notice where there
was a return filed, for normal assessment.
20. What are the grounds for suspension of the running of prescriptive periods?
When the CIR is Prohibited from making the assessment or beginning the distraint
or levy or proceeding in court, and for 60 days thereafter.
When the taxpayer requests for a reinvestigation which is granted by the CIR.
When the taxpayer cannot be located in the address given by him in the return,
UNLESS he informs the CIR of any change in his address.
When the warrant of distraint or levy is duly served, and no property is located.
22. What are the instances wherein notice of Informal Conference may be dispensed with?
23. What are the instances wherein PAN may be dispensed with?
(a) When the finding for any deficiency tax is the result of mathematical error in
the computation of the tax as appearing on the face of the return; or
(b) When a discrepancy has been determined between the tax withheld and the
amount actually remitted by the withholding agent; or
(c) When a taxpayer who opted to claim a refund or tax credit of excess creditable
withholding tax for a taxable period was determined to have carried over and
automatically applied the same amount claimed against the estimated tax
liabilities for the taxable quarter or quarters of the succeeding taxable year; or
(d) When the excise tax due on exciseable articles has not been paid; or
(e) When the article locally purchased or imported by an exempt person, such as,
but not limited to, vehicles, capital equipment, machineries and spare parts, has
been sold, traded or transferred to non-exempt persons.
24. What are the legal requirements that must be complied with to claim the reward?
The cash reward of informers shall be subject to income tax, collected as a final
withholding tax, at the rate of 10%.
26. Differentiate tax refund and tax credit.
Tax Refund, taxpayer asks for the restitution of the money paid as tax whereas,
Tax Credit the taxpayer asks that the money so paid be applied to his existing tax
liability
Tax Refund the Two year period to file claim with the CIR starts after the payment
of the tax or penalty, on the other hand, Tax Credit, the 2 year period starts from
the date such credit was allowed.
(Sec. 76) a taxable corporation with excess quarterly income payments may apply
for either a tax credit or tax refund, but not both. Failure to indicate a choice,
however, will not bar a valid request for refund, should this option be chosen by
the taxpayer later on. Once the carry-over option is taken, actually or
constructively, it becomes irrevocable.
28. Discuss the administrative remedies of the government for the collection of delinquent
taxes under the NIRC.
Assessment
Collection
Levy of real property refers to the seizure of real property of the taxpayer by the
government in order to enforce payment of taxes.
1. Delinquent accounts
2. Cases under administrative protest after issuance of the FAN to the taxpayer
which are still pending
3. Civil tax cases disputed before the courts
4. Collection cases filed in courts
5. Criminal violations other than those already filed in court or those involving
criminal tax fraud
(1) A reasonable doubt as to the validity of the claim against the taxpayer
exists; or
(2) The financial position of the taxpayer demonstrates a clear inability to pay
the assessed tax.
The compromise settlement of any tax liability shall be subject to the following
minimum amounts:
For other cases, a minimum compromise rate equivalent to forty percent (40%) of
the basic assessed tax.
Where the basic tax involved exceeds One million pesos (P1,000.000) or where the
settlement offered is less than the prescribed minimum rates, the compromise
shall be subject to the approval of the Evaluation Board which shall be composed
of the Commissioner and the four (4) Deputy Commissioners.
34. What is the extent of the Commissioners power to compromise criminal violations?
All criminal violations may be compromised except: (a) those already filed in
court, or (b) those involving fraud.
As to the grounds:
Commisioner may Abate or Cancel a Tax Liability, when:the tax or any portion
thereof appears to be unjustly or excessively assessed; or the administration and
collection costs involved do not justify the collection of the amount due.
b.) Inaction by the Commissioner of Internal Revenue where the NIRC provides
a specific period of action
i. Cases involving disputed assessments, refunds of internal revenue
taxes, fees or other charges, penalties in relation thereto, or
ii. Other matters arising under the NIRC or other laws administered by
the BIR.
c.) Decisions of the Commissioner of Customs
i. Cases involving liability for customs duties, fees or other money
charges, seizure, detention or release of property affected, fines,
forfeitures or other penalties in relatin theret, or
ii. Other matters ariosing under the customs law or other laws
administered by the BOC.
d.) Decision of the Secretary of Finance on customs cases elevated to him
automatically for review from decisions of the Commissioner of
Customswhich are adverse to the govt.
e.) Decision of the Sec. of Trade and Industry
37. What is a large taxpayer for VAT, for Excise tax, for corporate income tax and for
Withholding tax?
'Large taxpayer' means a taxpayer who satisfies any of the following criteria;
(1) Value-Added Tax (VAT) - Business establishment with VAT paid or payable of at
least One hundred thousand pesos (P100,000) for any quarter of the preceding
taxable year;
(2) Excise tax - Business establishment with excise tax paid or payable of at least
One million pesos (P1,000,000) for the preceding taxable year;
(3) Corporate Income Tax- Business establishment with annual income tax paid or
payable of at least One million pesos (P1,000,000) for the preceding taxable year;
and
Tax lien is a legal claim or charge on property, either real or personal, as security
for the tax obligation while distraint applies only to personal properties.
39. Distinguish forfeiture from seizure.
When it shall come to the knowledge of the Commissioner that a taxpayer is:
Illustrate in diagram format the procedure for filing a protest start from payment or filing
of ITR.