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TAX DEFICIENCY A taxpayer is considered delinquent in the payment of his tax when (a) the self-assessed tax per return filed by the taxpayer on the prescribed date was not paid or partially paid; or (b) the deficiency tax assessed by the BIR became final and executory. Deficiency means : (1) the amount by which the tax imposed by law, as determined by the commissioner or his duly authorized representative exceeds the amount shown as the tax by the taxpayer on his return; or (2) if no amount is shown as the tax by the taxpayer upon his return or no tax return was filed, then the amount by which the tax was determined by the commissioner or his duly authorized representative exceeds the amount previously assessed (or collected without assessment) as a deficiency. Distinctions A delinquent tax can immediately be collected administratively through the issuance of a warrant of distraint and levy or by judicial action. A deficiency tax can likewise be collected through administrative and/or judicial process except that it has to go through the process of filing of a protest, etc. The filing of a civil action for the collection of the delinquent tax in the CTA or ordinary court is the proper remedy. An action for the collection of a deficiency tax with the CTA or ordinary court requires that the assessment become final and executory, otherwise the same may be dismissed for lack of jurisdiction. CIR vs. Island Garment Manufacturing Corp GR No L-46644 September 11, 1987 ASSESSMENT PROCESS (RR 12-99) (Sec. 228 NIRC) After the filing of the return of the taxpayer together with the payment of taxes. It is the duty of the government to ascertain the correctness of the returns filed and if there exists any deficiency or fraud in the said returns. The process by the government is as follows: 1. 2. 3. 3. Issuance of a valid Letter of Authority, Letter Notice, Tax Verification Notice Examination of Books, paper and records Sec.5 (B) and 6 (A) NIRC Subpoena powers Sec. 5(C) NIRC Notice of Informal Conference Sec. 3.1.1 Rev. Regs. No. 12-99 On matter that taxpayers and BIR agree payment may be made using the "Agreement Form". On other matter not in agreement, the process continues. Issuance of the Preliminary Assessment Notice (PAN) Taxpayer is given 15 days to contest, otherwise he is considered in default, this is done by a "REPLY" within 15 days. The REPLY is not mandatory and does not fully tackle the issues contained in the PAN. Exceptions to the use of PAN Sec. 228 NIRC Issuance of the Formal Assessment Notice (FAN) and letter of demand Requirements: Sec. 3.1.4 RR 12-99 State the facts, laws, rules and regulations which the assessment is based otherwise it is void. Sent by registered mail or by personal delivery, if using the latter, the same should be acknowledged in the duplicate copy with the following information: 1) name, 2) signature, 3) designation and authority, 4) date of receipt. PNZ Marketing vs. Corn. CTA Case No. 5726 Dec. 14, 2001 Artex dev Co vs. NLRC 187 SCRA 611 (opportunity to be heard)
otherwise.Protest by taxpayer of the FAN within thirty days otherwise the same becomes final and executory wherein the taxpayer can no longer contest the assessment. Revision of the Assessment in parts. CIR GR 168498 apr 24. . RR No. Assessment number v. 102 Phil 822 b. COLLECTION PROCESS The issuance of the Final Assessment Notice legally creates a tax liability of the taxpayer which is being demanded in the accompanying letter of demand. Statement of facts and law to support the protest.1. If the memo is filed before the lapse of 60 days or after the lapse of 60 days. If reinvestigation — newly discovered evidence which is to be presented. Distinction between a request for reconsideration and request for reinvestigation i.R. Filing of an administrative protest by the taxpayer against the assessment a. Philippine Global Communication G. jurisprudence on which such decision is based. When does the CTA have jurisdiction? Lascona Realty Corp. the commissioner is given the 1 80 days to act upon the protest. Batangas Transportation Co. 9. the taxpayer is given 30 days to appeal to the Court of Tax Appeals (RA 9282 Expanded jurisdiction of the CTA). the decision shall be void. Itemized statement of findings which are agreed upon which should be paid immediately. the applicable law. 3. If there is no additional documents filed.6 RR 1299) 10. Rule 8 of the Revised Rules of the Court of Tax Appeals . 2006 1. ii. Collector vs. Must specify the following: i.2007 Section 3. If reconsideration — question of appreciation of the law 2. Issuance of a revised assessment (possibility) i. vs. CIR vs. Done within thirty days from receipt otherwise the assessment becomes final. Date of receipt of assessment number or demand letter 1. vi. 269 (c) NIRC 2. d. No. Comm CTA Case 61111. c. Denial of the Protest If the protest of the taxpayer is denied in whole or in part the same shall contain the following i. Nature of the request of whether it is for reconsideration or reinvestigation I.There are issues as to when the 180 day period begins to start. That the same is the final decision of the commisioner. Denial of the protest. (Sec. Oceanic Wireless Network vs. vii. 2004 8. State the facts. Itemized schedule of the adjustments to which the taxpayer does not agree to. 7. c. Sec. Taxable period covered iv. Upon the submission of documentary evidence or memorandum. Within 30 days from the denial of the Protest. Rule 4 and Section 3(a). b. 224 6. 12-85 Section 6 ii. Nov. 3. Submission of documentary evidence within sixty days of filing of protest. rules and regulations. RCBC vs. Cancellation of the entire assessment. The stages are as follows: 5. Sec. 167146 October 31. Comm. Complete name and address of taxpayer ii. CTA Case No. iii.
TAX REMEDIES (NATIONAL TAXES). lack of approval of commissioner is not a bar) Sec. taxpayer is barred from questioning the case) Sec. tobacco cases) G. 202-231) A. NIRC Republic vs. NIRC 1. 56 [A]  (when taxes are to be paid) Sec. 21. Meaning of Assessment/Deficiency 2. et. Bellosillo commissioner is not jurisdictional.) 20 SCRA 712 (criminal action does not People vs. NIRC Policies of decentralization 1. al.R.. June 5. CTA Rules to implement R.I. already prescribed. Patanao amount to a decision for unpaid taxes under the old nirc) 257 SCRA 200. Collection of tax liability 1. Oct. et. June 4. 7-2001 . 205-217 Sec. Deficiency Tax Assessment 1.al . 12-85 166 SCRA 608. 1997 Marcos vs. 13.2 Summary remedies Sec. distraint over seizure) 3. Forfeiture Secs. NIRC Rev Reg. CA. Compromise 4. prescriptive period had lapsed and had become final. 7. 1125 (CTA may issue an injuction) 16 SCRA 584 (when a case has Republic vs.1996 (fortune CIR. criminal actions need not have the computation of the tax due. NIRC 1. 204 (B).A. 224-226.3 Civil action & Criminal Actions Sec.4 Form & Mode of Proceedings 20 SCRA 32 (lack of approval of Arches vs. vs. NIRC RR No. 204 (A). it affects only the capacity of parties) G. NIRC Sec. 1999 (summary Republic vs. NIRC Sec. 205. Cusi filed in court. 220. Title VIII (Sec. Kinds of Tax Assessment Sec. Enriquez of tax lien. 130430 Dec. Remedies of the Government 1.1 No court injunction against tax collection rule Sec. 56 (B) (1) & (2). 1988 (superiority Sec. 2. CA. Salud Hizon proceedings on collection. 218. 222 (C). Lim Tian Teng. 120880. 228 (When assessment not necessary to collect taxes) TRO vs RA 9337 (still pending) 1.5 Cases 97 SCRS 877 (criminal actions are to be Ungab vs.R. No. Abatement/Cancellation B. No. NIRC Rule 12.
Ulep 316 SCRA 118 Exception Taxpayer period is terminated Tax Audits Tax Liens Dissolution b. Nov. May 21. Deficiency Assessment Sec. 1966 Republic vs. Inc. (D) & (E) Pay as you file Sec 56 [A]  1997 NIRC Self — assessing Republic vs Ricarte. Domingo L-18611 Jan. 1997 Assessments are not based on presumptions no matter how logical CIR vs. 1985 Tupaz vs. 2. 1992 Authority to assess may be delegated City Lumber vs. 12-99 Sec. Inc. Union Shipping Corp. 30. 120880.) Commissioner must state in a clear and unequivocal language the decision 185 SCRA 547. CIR 58 SCRA 519 a. 133 SCRA 765. vs. 1999 (on claims CIR vs. 1984 Advertising Assoc. 1962 (assessments cannot be based on mere presumptions) Assessment is discretionary on the part of the commissioner Meralco Securities vs. L-46893. CA. 29.R. Illegal and Void Assessment Sec. Antonio Tuason Inc.R.RR No.. 56 (B) (1) & (2). Benipayo GR No. 23. Dec. 228 Victorias Milling Co. Erroneous Assessment 3. CA for refund. G.R. CTA L-24213.80 (C). 173 SCRA 397 (incumbent upon the taxpayer to disprove the assessment. GR 128315 June 1999 Presumption of correctness of assessment Bonifacia Sy Po vs. No. Co. G. 23-00 What are tax assessments CIR vs. 12. 13656 Jan 13. No. 2-98 Sec. Pascor Realty & Dev. PRINCIPLES GOVERNING ASSESSMENTS RMC No. 13. 228 RR No. Dela Rama Investigative powers of the comm issioner Sec. 117254 Jan 21. Nov. Oct. 1990 CIR vs. Savellano L-36181 and L-36748. No. NIRC c.) Marcos vs. Self Assessment . CIR Fraud cases Aznar vs. 1964 Assessment must be delegated to the proper party L-21108. 28. 1968 d. June 5. vs. the period commences on the date of actual payment and not on the last day of filing. mar. 5 and 6 (F) NIRC G. CTA 164 SCRA 524 (presumption of correctness in assessments) CIR vs.
1965 CIR vs. CA 10 SCRA 738 RP vs. CIR GR L-19470 January 30.R. 1976 CIR vs.R.R. 203 & 222 NIRC BIR Unnumbered Ruling 1 . June 27. Disputable presumption: Duly directed and mailed letter is deemed received.4. 2858. 120880. G. CIR. Sec. 1961 Butuan Sawmill. 1959 16 SCRA 277.28. 1987 Boise Cascade Phils. 1999 CIR vs. G. March 30. Vs. Acevedo 22 SCRA 1356 26 SCRA 136 Sinforosa Alca vs.30 . Suyoc Consolidated mining prescription when it was the party asking for reinvestigation) 117 Phil. 112024 Jan 28. vs. 578 (1963) (period wherein Republic vs. 1999 (state cannot be put in estoppel by the mistake or errors of its agents. 117982. Abad G.R. Inc. 1997 (exception to the no estoppel rule in the interest of justice and fair play) CIR vs. 1999 5.R. CA G. 1997 CIR vs. period to start from the filing of the adjustment return and final payment of the tax. vs. CA & Nielson. 895 (1963) Comm. June 29. 1959 GR L22492 September 5. CIR Nava vs. GR 128315 June 1999 6. Inc. CA. CIR G. Prescription of Right to Assess. Co. no. Rascor GR 127777. No. L-12250. Feb 24. CIR 199 SCRA 824.07 addressed to SGV 1. Lopez reinvestigation was conducted to be deducted from prescriptive period. 21 SCRA 17 Basilan Estates vs CIR 149 SCRA 351 (burden shifts to bir to prove Republic vs. Javier Jr. 1968 (state cannot be estopped by the neglect of its agents and officers) Visayan Cebu Terminal vs. Feb.) • exception CIR vs. receipt) Marcos vs. 120880. Inc. 107135. Ayala Securities 58 SCRA 519 Aznar vs. January 26. 4263. 27. 1999 Tupaz vs. No. 1997 Marcos vs. 56 (B) NIRC C.1 Cases 19 SCRA 790 Guagua Electric vs. No. Feb 23. Pascor Realty & Dev. CIR L-19530 and 19444. BF Goodrich CTA Case No. 1965 Phil Bank of Corn vs. Collector L-12100 & L-11812. Lim De Yu G. sison Bisaya Land Transportation Co vs. May 27.. 104171. October 1. 1999 CIR vs. Prescription of Right to Assess and Collect Taxes 1. 1967 Basilan Estates.R. vs CTA 70 SCRA 204. R No. 1993 Carnation Phils. 575. June 5. Collector 104 Phil 819 (taxpayer cannot claim CIR vs. No. Republic vs. NO ESTOPPEL AGAINST THE GOVERNMENT CIR vs. Assessment and payment of deficiency tax. No. 1991 CIR vs.) 117 Phil 892. CA GR No. 31. Feb. July 31. 128315. June 5. CIR G. vs. Feb 6.R. Secs. L-19627. CA. No. CTA Case No. Ulep . May 19. Mar. Bautista G. Inc.
Sec. NIRC 3. 17. May 21. CTA Case No. CA. vs. NIRC 3. Feb. GR No. CIR . Wyeth Suaco Laboratories inc. Aquino. 1991 CIR vs. Inc. 27. 1986 138 SCRA 34.1 Cases Delta Motors Co. Judicial Remedies 4. 1989 Gibbs vs. August 30.2. CIR/CC CTA Case 3891. CA. Sept. 5777 Jan 4.1966 CIR vs.R. 25.1 Cases Aguinaldo Industries Co. Sec 203 & 222. Republic Marcos vs. June 5. 1991 CIR vs. 10 SCRA 773 Palanca vs. Union Shipping Corp. CA 204 SCRA 957. CIR. 228. Prescription of Right to Collect. Remedies of the Taxpayer 1. 1982 Abra Valley College vs. march 16. Jan. 13. August 5. vs. Dec.1 4. Algue 158 SCRA 9. April 19. Remedies before payment of the tax 1. Hon. Procter & Gamble PMC 4. Nov. 1988 160 SCRA 560. NIRC Sec. Ltd. 185 SCRA 547. Feb. TMX Sales. 3782.2. 3378. CIR 112 SCRA 136.1 Cases CIR vs. Wander Phils. 1988 CIR vs. 2. 12-85 Case No. 1986 CIR vs. CIR Basa vs. 1991 CIR vs. vs. CIR 4 SCRA 263 Republic vs. NIRC. 30. Taxpayers defenses against the assessment 2.1 RA 9282 Expanding the jurisdiction of the Court of Tax Appeals 4. Capitol Subd. Inc. 2000 Sec.2 CTA Jurisdiction (revised CTA jurisdiction contained in RA 9282) 4.1 Cases Bermejo vs. Procter & Gamble PMC 204 SCRA 377. Suspension of Prescriptive Period. 1985 G. Sison 7 SCRA 824 Repuplic vs. 120880. 1991 CIR vs. July 21. 1705 CIR vs.. & CA204 SCRA 184. 20. Corp.. 96 Chemphil Mfg. May 21. 1997 Lascona Land vs. Citytrust & CTA. 1988 CIR vs. 1994 CC & CIR vs. Dec.2. 223. 29. 2. Ker & Co. June 15.2 What decision are appealable? When should the appeal to the CTA be made? CTA Case no. 204 & 229. Remedies after payment of tax 3.. 106611. 1991 3. 1990 D. RR No. Ablaza 108 Phils.. 1992 Citibank. December 2. CA & Planters GR 82618. L-39086. Collector 87 Phil. 18 SCRA 207 Sept. No. NY vs. 160 SCRA 573. vs. & CTA 202 SCRA 125. CIR 15 SCRA 318 ACCRA Investment Corp.
ESSO. Crimes. 29. 28.5 Appeal of CTA decisions To the CTA en banc To the Supreme Court DBP vs. CA & People 190 SCRA 616. 22. 3-91 172 SCRA 364 Sec 253-268 Sec. 274 . 22. Sec. Oct.2.1 Prescription for violations of NIRC Sec 281 4. Statutory Offenses and Penalties. Penalties imposed on public officers 3.1 Civil Penalties 1. 248 Sec. 1974 L-23938. Villa. 1999) RR No.4.4 CTA finding of fact conclusive Nasiad vs. CTA 4. CA RA 9282 Section 11 amending Sec 18 of RA 1125 RA 9282 Section 12 amending Sec. other offenses and forfeitures 3. Advertising Assoc.2 Interest CIR vs. Other penal provisions Secs. Dec. 1984 GR 39910 September 26. Jan.1 Violation of withholding tax provision Sec. CIR Dayrit vs.3 Cases L-25289. CA. 247-281) 1. Jose Concepcion 4. Cruz 4. 19 180 SCRA 609.3 Procedure of appeal. CIR vs. 249 RMC 46-99 (June 18. 1968 22 SCRA 3 133 SCRA 765. 1989 E. 1990 . Title X (Secs. vs. June 28. 269 2. 11. 18. Dec. 1988 Sec. vs. 272 4.282 4. Additions to the tax 1. 1974 Surigao Electric Co. RA 1125 22 SCRA 1058 61 SCRA 238. CIR vs. Nov..2 Lim vs. Inc.
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