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MARIPOSA PROPERTIES VS. CIR (CTA Case No.

6402, 02/13/2007) (Note: Guys I could not find a full text copy of the case in the internet as this is not one decided by the SC but merely by the CTA. The only available copy is not actually a copy! but a discussion of the rulin" of the court. No facts at all. So I #ust copied it and reproduce it here. Any$ay yun" rulin" naman an" impt. I hope this $ill suffice. %y source is the $ebsite of &unon"bayan and Araullo.' Ded !"#$#%#"& o' do(a"#o(s) • In deciding on the BIR’s disallowance of deduction for donations made to a private foundation, the CTA required the donor to prove compliance of both the donor and the donee with the requirements for deductibility of donations !ence, for failure of the donor to present proof that the foundation’s income ta" return #ITR$ and audited financial statements #A%&$ 'as well as the annual information report of the foundation( were submitted to the BIR as required in the regulations, the deductions for donation was disallowed • A donor must not only comply with the substantiation requirements for donors but also prove that the donee complied with the )*+A(prescribed +onee Reporting Requirements under BIR()*+A Regulation )o ,(-, as a precedent to the full deductibility of a donation pursuant to &ec ./ #!$ #c$ #ii$ of the )IRC • In deciding on the BIR’s disallowance of deduction for donation to a private foundation, the CTA required the donor to present evidence to establish that the foundation has been complying with the substantiation requirements for the donees as prescribed under &ec ,, #B$ of BIR()*+A Reg )o ,(-, • !owever, neither the ITR and A%& nor the annual information report duly certified by the authori0ed official of the foundation containing the annual information report required by &ec ,, of BIR()*+A Reg )o ,(-, was presented by the donor Thus, on account of its failure to establish that the foundation has been complying with the substantiation requirements for donees, the donor’s claim for deduction of its donations was disallowed • The CTA further held that the BIR()*+A Reg )o ,(-, was a valid administrative issuance since it does not go beyond the confines of what has been provided in the )IRC The regulation only supplies the details necessary for carrying out the law by enumerating the procedures and requirements necessary for claiming donations as ta" deductions Considering that the provision of BIR( )*+A Reg )o ,(-, is within the delegated authority of the administrative agency, donors must adhere to the requirements under the said regulation in order to be entitled to a ta" deduction