Professional Documents
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IRC Taxation
IRC Taxation
non-filing of Returns
a. a.1 Assessment
Fraud may be established by the
A. There shall be imposed, in addition to the Delinquency Interest and Deficiency Interest
tax required to be paid, a penalty equivalent to 25%
of the amount due, in the following cases: Sec. 249, NIRC
1. Failure to file any return and pay the tax (A) In GeneralThere shall be assessed and
due thereon as required under the collected on any unpaid amount of tax,
provisions of the Code or regulations on interest at the rate of 20% per annum, or
the date prescribed; or such higher rate as may be prescribed b
rules and regulations, from the date
2. Filing a return with an internal revenue prescribed for payment until the amount is
officer other than those with whom the fully paid.
return is required to be filed; or
(B) Deficiency Interest.Any deficiency in the
3. Failure to pay the deficiency tax within tax due shall be subject to the interest
the time prescribed for its payment in prescribed in Subsection (A) hereof, which
the notice of assessment; or interest shall be assessed and collected
from the date prescribed for its payment until
4. Failure to pay the full or part of the the full payment thereof.
amount of tax shown on any return
required to be filed under the provisions (C) Delinquency Interest. --- In case of failure to
of the Code or rules and regulations, or pay:
the full amount of tax due for which no
return is required to be filed, on or 1. the amount of the tax due on any return
before the date prescribed for its to be filed, or
payment.
2. the amount of the tax due for which no
B. In case of willful neglect to file the return return is required, or
or in case a false or fraudulent return is
willfully made, the penalty to be imposed 3. a deficiency tax, or any surcharge or
shall be 50% of the tax or of the deficient interest thereon on the due date
tax, in case any payment has been made on appearing in the notice and demand of
the basis of such return before the discovery the Commissioner, there shall be
of the falsity or fraud. assessed and collected on the unpaid
amount, interest at the rate of 20% per
Provided: that a substantial underdeclaration annum until the amount is fully paid
of taxable sales, receipts or income, r a which interest shall form part of the tax.
substantial overstatement of deductions, as
determined by the Commissioner pursuant Surcharge
to the rules and regulations to be
promulgated by the Secretary of Finance A surcharge of 50% or 25%,
shall constitute prima facie evidence of a respectively, on the tax or deficiency tax is
false or fraudulent return; imposed depending on whether the non-
filing or understatement of the tax liability is
Provided, further, that a failure to report willful or not. The computation of the
sales, receipts or income in an amount surcharge is on the tax proper and it is thus
exceeding 30% of that declared per return, exclusive of other surcharges and interest.