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Taxation Law

Taxation Law

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Published by Winston Abajero

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Published by: Winston Abajero on Oct 22, 2012
Copyright:Attribution Non-commercial


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BIR: Bank Deposits Secrecy
Violation (2000)

A taxpayer is suspected not to have declared
his correct gross income in his return filed for
1997. The examiner requested the
Commissioner to authorize him to inquire into
the bank deposits of the taxpayer so that he
could proceed with the net worth method of
investigation to establish fraud. May the
examiner be allowed to look into the
taxpayer's bank deposits? In what cases may
the Commissioner or his duly authorized
representative be allowed to inquire or look
into the bank deposits of a taxpayer? (5%)


No. as this would be violative of Republic Act
No. 1405, the Bank Deposits Secrecy Law. The
Commissioner of Internal Revenue or his duly
authorized representative may be allowed to
inquire or look into the bank deposits of a
taxpayer in the following cases: a) For the
purpose of determining the gross estate of a


Where the taxpayer has filed an
application for compromise of his tax liability
by reason of financial incapacity to pay such
tax liability. (Sec. 6 (F), NIRC of 1997]


73 of 73


Where the taxpayer has signed a


authorizing the Commissioner or his duly
authorized representatives to Inquire into the


BIR: Secrecy of Bank Deposit
Law (2003)

X dies in year 2000 leaving a bank deposit of
P2,000,000.00 under joint account with his
associates in a law office. Learning of X's death
from the newspapers, the Commissioner of
Internal Revenue wrote to every bank in the
country asking them to disclose to him the
amount of deposits that might be outstanding
in his name or jointly with others at the date of
his death. May the bank holding the deposit
refuse to comply on the ground of the Secrecy
of Bank Deposit Law? Explain. (8%)


No. The Commissioner of Internal Revenue has
the authority to inquire into bank deposit
accounts of a decedent to determine his gross
estate notwithstanding the provisions of the
Bank Secrecy Law. Hence, the banks holding
the deposits in question may not refuse to
disclose the amount of deposits on the ground
of secrecy of bank deposits. (Section 6(F) of
the 1997 Tax Code). The fact that the deposit
is a joint account will not preclude the
Commissioner from inquiring thereon because
the law mandates that if a bank has knowledge
of the death of a person, who maintained a
bank deposit account alone, or jointly with
another, it shall not allow any withdrawal from
the said deposit account, unless the
Commissioner has certified that the taxes
imposed thereon have been paid. (Section 97
of the 1997 Tax Code). Hence, to be able to
give the required certification, the inclusion of
the deposit is imperative, which may be made
possible only through the inquiry made by the

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