Week 2:

Tax Administration Part I

Module 2
 Week 2: Tax Administration I

Learning Objectives:

1.Define Tax Administration

2.Give Tax Agencies
3.Enumerate the Power, Duties and
Responsibilities of Bureau of Internal
Revenue and its commissioner
4.Give meaning to Tax Credit Certificate
 Week 2: Tax Administration I

Learning Objectives:

5.Provide the efficient and effective

collection through Administrative
Provisions
6.Show the Tax Remedies and
Assessment Procedure;
7.Provide insights about the Collection of
Taxes
 Week 2: Tax Administration I

Tax Administration
It involves enforcement of taxes through
the following aspects of taxation
Assessment and Collection.
Tax The Department of Finance (DOF) is
the principal government office that
Administration handles the administration and

Agencies supervision of tax related matters.

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1. Bureau of Internal Revenue (BIR)

an agency of Department of Finance that
collects more than half of the total
revenues of the government.
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2. Bureau of Customs (BOC)

is responsible for regulating and
facilitating trade, assessment and
collecting import duties and taxes,
combating illegal trade and other forms
of customs fraud, and devising and
managing customs management systems
for trade facilitation.
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3. Land Transportation Commission

is responsible for all land transportation
in the Philippines, especially
implementing transportation laws, rules
and regulations.
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4. Duly and lawfully authorized collectors

duly accredited banks authorized by BIR,
BOC, TC, and LTC to collect taxes.
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5. Local Offices
• Provincial, city, municipal and barangay
treasurers
• Provincial and city and assessors
• Provincial and city board of assessment
appeals
• Central board of assessment appeals
Other Tax
Enforcers
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1. Secretary of Justice
has the authority to ascertain the validity
of the laws subject to review by the
Courts of Justice.
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2. Various Offices
• The courts
• Register of deeds
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3. Secretary of Finance
is in charge of the Department of Finance
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4. Commissioner of Internal Revenue

is the head of the Bureau of Internal
Revenue
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5. Commissioner of Customs
is the head of the Bureau of Customs
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6. Justices of the Court of Tax Appeals

expedite the disposition of tax-evasion
cases and decides other tax cases
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7. Deputy Commissioner of the BIR

assists the Commissioner of Internal
Revenue in carrying the powers and
duties of BIR
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8. Regional Directors and District Officers of BIR

administers and enforces internal
revenue laws including the assessment
and collection of all internal revenue
taxes
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9. Provincial, City and Municipal Treasurers

responsible for managing the revenue
and cash flow of the local government
unit
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10. Examiners and Collection Agents BIR & BOC

conducts the tax assessment as well as
collection of assessed tax deficiencies
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Chief Officials BIR Officers
•Commissioner of • Revenue Regional
Internal Revenue – Director
known as the BIR • Revenue District Officer
Commissioner • Revenue Examiners
• Division Chiefs
•Four (4) Deputy
Commissioners • BIR Collection Agents
 Week 2: Tax Administration I

Powers and Duties of the Bureau of Internal Revenue

1.To assess and collect all national
internal revenue taxes, fees, and
charges.
2.To enforce all forfeitures, penalties, and
fines connected with the assessment
and collection functions.
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Powers and Duties of the Bureau of Internal Revenue

3. To execute judgments in all cases
decided in its favor by the Court of Tax
Appeals and the ordinary courts
4. To administer, supervise and affect
police powers authorized by the NIRC
and other laws.
 The annual registration fee is
P500 for every separate or
Administrative distinct establishment or place of
Provisions business, including facility types
where sales transactions occur.
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BIR Forms
1. BIR Form 1901
2. BIR Form 1902
3. BIR Form 1903
4. BIR Form 1904
5. BIR Form 1905
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Tax Returns Examples
• refers to a formal report prepared 1.BIR Form 1700
by the taxpayer or his agent in a
prescribed form showing an 2.BIR Form 1701
enumeration of taxable amounts
and description of taxable 3.BIR Form 1702
transactions, allowable deductions,
amount of tax and tax payable to the 4.BIR Form 1800
government. 5.BIR Form 1801
Certificate
of Payment
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Certificate of Payment
1. It shall be kept in plain view at the
place where the business is
conducted;
2. it shall be kept in the possession of
the holder thereof, and shall be
presented• demand of any. internal
revenue officer.
 These are procedures or actions
Tax available both to the government to
collect taxes and to the taxpayer to
Remedies avoid abuses in the payment of taxes.
 Week 2: Tax Administration I
Government Remedies Taxpayer’s Remedies
1.Assessment of tax 1.Assessment
2.Compromise 2.Compromise
3.Tax lien 3.Tax refund
4.Levy 4.Amendment of returns
5.Distraint
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Assessment
When the taxpayer earns income, he has
the responsibility to compute, file and pay
his tax to the BIR. Hence, the taxpayer
creates his tax liability even without the
government's assessment.
Kinds of
Assessment
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1. Self-Assessment
is made by the taxpayer himself reflecting
the amount of tax due in the ITR which he
has to pay at the lime of filing his tax
return.
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2. Prospective Assessment
informs the taxpayer about the findings
by the tax examiner regarding the
taxpayer's tax deficiency.
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3. Disputed Assessment
is being questioned by the taxpayer as to
its validity or legality and asks the same
to be cancelled.
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4. Final Assessment
was not disputed or properly appealed by
the taxpayer within the prescribed
period, and has become final and
executory.
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5. Deficiency Assessment
made by a tax assessor showing the
correct amount of tax after tax audit.
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6. Jeopardy Assessment
an assessment without the benefit of
complete or partial tax audit intended to
prevent the delay of the assessment and
collection of taxes cause by the taxpayer's
failure to comply with tax investigation
requirements and substantiate his
records with proper documents.
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7. Illegal or Void Assessment

made by a BIR officer without authority
or an assessment made in violation of law.
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Collection of Taxes
By nature, the government's power to
impose taxes carries with it the power to
enforce contribution. As the lifeblood of
the government, taxes are not optional
and the taxpayer thereof must make
payment promptly.
Collection of
Delinquent
Taxes
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1. Distraint of Personal Property

is the seizure by the government of
personal property (tangible or intangible)
to enforce the payment of taxes, followed
by its public sale if taxes accruing thereto
are not voluntarily paid.
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Constructive Distraint Actual Distraint
• prohibits the taxpayer • takes possession of the
from disposing his taxpayer's personal
personal property to property and sells the
enforce collection of taxes. same through public
auction to settle the latter's
unpaid tax liabilities.
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2. Levy of Real Property

is the seizure by the government of
immovable property in order to enforce
the payment of taxes. As in distraint, the
property may be sold at a public sale if,
after seizure, the taxes are not voluntarily
paid.
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3. Other Collection Remedies

1. Imposition of injunction;
2. Enforcement of tax lien;
3. Enforcement of forfeiture;
4. Entering into compromise of tax case;
5. Requiring the filing of bonds;
6. Requiring proof of filing of income tax
returns;
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3. Other Collection Remedies

7. Giving of rewards to informers;
8. making arrest, search and seizure;
9. Deportation of aliens;
10.Inspection of books of accounts;
11.Use of national tax register; and
12.Imposition of civil and criminal action.
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Tax Lien
is directed to the property subject to tax
regardless of the owner of the property,
irrespective of who is the possessor
thereof. It is enforced (a) by a seizure of
the property, and (b) by a sale of the
property.
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Forfeiture
When the sale of the articles confiscated
for consumption or use would be
injurious to the public health; the
Commissioner of Internal Revenue may
order that these be destroyed,
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Compromised
Compromise is a contract whereby the
parties, by reciprocal concessions, avoid
litigation or put an end to one already
commenced.
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Agreements to compromise
1.Delinquent accounts;
2.Cases under administrative protest
3.Civil tax cases
4.Collection cases
5.Criminal violations,
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Agreements not compromised

1.Withholding tax cases
2.Criminal tax fraud cases
3.Criminal violations
4.Delinquent accounts
5.Cases of reinvestigation or
reconsideration
6.Cases after final judgment of a court
7.Estate tax cases