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TITLE VIII REMEDIES disputed presumptions. (CIR v.

Embroidery and
Garments, G.R. No. 96262)
Cases which may be compromised:
1. Delinquent accounts;
SEC. 202. Final Deed to Purchaser.- In case the taxpayer 2. Cases under administrative protest after issuance of
shall not redeem the property as herein provided the the final assessment notice to the taxpayer which are
Revenue District Officer shall, as grantor, execute a deed still pending;
conveying to the purchaser so much of the property as 3. Civil tax cases being disputed before the courts;
has been sold, free from all liens of any kind whatsoever, 4. Collection cases filed in courts;
and the deed shall succintly recite all the proceedings 5. Criminal violations, except (a) those already filed in
upon which the validity of the sale depends. court, or (b) those involving criminal tax fraud.

SEC. 203. Period of Limitation Upon Assessment and The compromise settlement of any tax liability shall be
Collection. - Except as provided in Section 222, internal subject to the following minimum amounts:
revenue taxes shall be assessed within three (3) years
after the last day prescribed by law for the filing of the For cases of financial incapacity, a minimum
return, and no proceeding in court without assessment for compromise rate equivalent to ten percent (10%)
the collection of such taxes shall be begun after the of the basic assessed tax; and
expiration of such period: Provided, That
For other cases, a minimum compromise rate
In a case where a return is filed beyond the period equivalent to forty percent (40%) of the basic
prescribed by law, the three (3)-year period shall assessed tax.
be counted from the day the return was filed.
Where the basic tax involved exceeds One million pesos
For purposes of this Section, a return filed before the last (P1,000.000) or where the settlement offered is less than
day prescribed by law for the filing thereof shall be the prescribed minimum rates, the compromise shall be
considered as filed on such last day. subject to the approval of the Evaluation Board which
shall be composed of the Commissioner and the four (4)
If the return is amended substantially different from the Deputy Commissioners.
original return, the three year prescriptive period shall be
counted from the filing of the amended return. (CIR v. The subsequent inability of the withholding agent to
Phoenix Assurance, G.R. No. L-19727) pay/remit the tax withheld is not a ground for compromise
because the withholding tax is not a tax upon the
Prescriptive period for collection of taxes: 3 years from the date withholding agent but it is only a procedure for the
of the final assessment notice (FAN) collection of a tax.

In civil tax cases involving collection of internal revenue The payment of the tax due after apprehension shall not
taxes, prescription is construed against the government constitute a valid defense in any prosecution for violation
and liberally in favour of the taxpayer. (CIR v. Goodrich of any provisions of the Tax Code.
Phil., G.R. No. 104171)
(B) Abate or Cancel a Tax Liability, when:
In criminal tax cases involving tax offenses punishable
under the Tax Code, prescription is construed strictly (1) The tax or any portion thereof appears to be unjustly or
against the taxpayer. (Lim v. CA, G.R. No. 48134-37) excessively assessed; or

SEC. 204. Authority of the Commissioner to Compromise, (2) The administration and collection costs involved do
Abate and Refund or Credit Taxes. - The Commissioner not justify the collection of the amount due. (The
may - administration and collection costs are more than the amount
sought to be collected.)
(A) Compromise the Payment of any Internal Revenue Tax,
when: All criminal violations may be compromised except: (a)
those already filed in court, or (b) those involving fraud.
(1) A reasonable doubt as to the validity of the
claim against the taxpayer exists; or (C) Credit or refund taxes erroneously or illegally received
or penalties imposed without authority, refund the value of
(2) The financial position of the taxpayer internal revenue stamps when they are returned in good
demonstrates a clear inability to pay the assessed condition by the purchaser, and, in his discretion, redeem
tax. (Financial Incapacity) or change unused stamps that have been rendered unfit
for use and refund their value upon proof of destruction.
Jeopardy assessment refers to a tax assessment which was
assessed without the benefit of complete or partial audit by an Sections 204(C) and 229 of the NIRC apply only to
authorized revenue officer, who has reason to believe that the instances of refund of erroneously paid or illegally
assessment and collection of deficiency tax will be jeopardized collected internal revenue taxes, not the refund of VAT
by delay because of the taxpayers failure to comply with the input taxes of VAT registered taxpayers. (CIR v. Aichi
audit and investigation requirements to present his books of Forging Co., G.R. No. 184823)
accounts and/or pertinent records, or to substantiate all or any
of the deductions, exemptions, or credits claimed in his return A tax refund is in the nature of a tax exemption which must
be construed strictissimi juris against the taxpayer. This
The assessments must be based on actual facts and tax exemption, therefore, must not rest on vague,
proved by competent evidence, not imposed based on uncertain or indefinite inference, but should be granted
unverified information supplied by an informant, or only by a clear and unequivocal provision of law on the
basis language too plain to be mistaken. (CIR v. Slidbank Distinctions between Compromise and Abatement:
Corp., 46 SCRA 96)
1. Compromise involves the reduction of the taxpayers
There is parity between tax refund and tax exemption only liability, while abatement is the cancellation of the
when the former is based either on a tax exemption taxpayers liability;
statute or a tax refund statute. 2. The CIR, the NEB and REB are authorized to enter
into a compromise, while only the CIR is authorized to
Tax refund refers to the actual reimbursement of the abate or cancel tax liability of a taxpayer;
erroneously or illegally collected taxes 3. They also differ on the grounds in which they can be
Tax credit refers to the issuance of a Tax Credit Certificate
(TCC) which may be utilized in the payment of the internal Conditions for the grant of a claim for refund or creditable
revenue taxes, excluding withholding taxes, for which the withholding tax:
taxpayer is directly liable
1. A written claim must be filed with the Commissioner
No credit or refund of taxes or penalties shall be allowed within two years from the date of payment of tax;
unless the taxpayer files in writing with the Commissioner 2. It is shown on the return of the receipt that the income
a claim for credit or refund within two (2) years after the payment received was declared as part of the gross
payment of the tax or penalty: Provided, however, That income; and
3. The fact of withholding is established by a copy of a
A return filed showing an overpayment shall be statement duly issued by the payor to the payee
considered as a written claim for credit or refund. showing the amount paid and the amount of the tax
withheld therefrom.
Conditions before refund or credit may be granted:
The person entitled to claim a tax refund is the taxpayer,
1. The taxpayer must file a written claim for credit or
but in case the taxpayer does not file a claim for refund,
refund with the Commissioner within 2 years after the
the withholding agent may file the claim. A withholding
payment of the tax or penalty;
agent has a legal right to file a claim for refund. (CIR v. PG
2. If denied or not acted upon within said period, the
PMC, G.R. No. 204 SCRA 377) But while the withholding
petition for refund be filed with the CTA within 30 days
agent has the right to recover the taxes erroneously or
from receipt of the denial and within said two year
illegally collected, he nevertheless has the obligation to
period from the date of payment of the tax or penalty
remit the same to the principal taxpayer. (CIR v. Smart
regardless of any supervening cause;
Communication, 629 SCRA 342)
3. The claim for refund must be a categorical demand
for reimbursement;
Request for issuance of TCC is not subject to the two-year
4. There must be proof of payment of the erroneously or
limitation upon basic consideration of equity and fairness.
illegally collected taxes; and
When it is undisputed that a taxpayer is entitled to a
5. No refund shall be given resulting from availment of
refund, the State should not invoke technicalities to keep
incentives granted pursuant to special laws for which
money not belonging to it. (Phi.l Phosphate Fertilizer v.
no actual payment was made.
CIR, G.R. No. 141973)

The options of claim for refund or tax credit are mutually CHAPTER II
exclusive such that resort to one bars the application of

A Tax Credit Certificate validly issued under the SEC. 205. Remedies for the Collection of Delinquent
provisions of this Code may be applied against any Taxes. - The civil remedies for the collection of internal
internal revenue tax, excluding withholding taxes, for revenue taxes, fees or charges, and any increment thereto
which the taxpayer is directly liable. resulting from delinquency shall be:

Any request for conversion into refund of unutilized tax (a) By distraint of goods, chattels, or effects, and other
credits may be allowed, subject to the provisions of personal property of whatever character, including stocks
Section 230 of this Code: Provided, That the original copy and other securities, debts, credits, bank accounts and
of the Tax Credit Certificate showing a creditable balance interest in and rights to personal property, and by levy
is surrendered to the appropriate revenue officer for upon real property and interest in rights to real property;
verification and cancellation: Provided, further, That in no and
case shall a tax refund be given resulting from availment
of incentives granted pursuant to special laws for which (b) By civil or criminal action.
no actual payment was made.
Either of these remedies or both simultaneously may be
The Commissioner shall submit to the Chairmen of the pursued in the discretion of the authorities charged with
Committee on Ways and Means of both the Senate and the collection of such taxes: Provided, however, That the
House of Representatives, every six (6) months, a report remedies of distraint and levy shall not be availed of
on the exercise of his powers under this Section, stating where the amount of tax involve is not more than One
therein the following facts and information, among others: hundred pesos (P100).
names and addresses of taxpayers whose cases have
been the subject of abatement or compromise; amount The judgment in the criminal case shall not only impose
involved; amount compromised or abated; and reasons the penalty but shall also order payment of the taxes
for the exercise of power: Provided, That the said report subject of the criminal case as finally decided by the
shall be presented to the Oversight Committee in Commissioner.
Congress that shall be constituted to determine that said
powers are reasonably exercised and that the government The Bureau of Internal Revenue shall advance the
is not unduly deprived of revenues. amounts needed to defray costs of collection by means of
civil or criminal action, including the preservation or
transportation of personal property distrained and the Said certificate shall operate with the force of a legal
advertisement and sale thereof, as well as of real property execution throughout the Philippines. cralaw
and improvements thereon.
Levy shall be affected by writing upon said certificate a
SEC. 206. Constructive Distraint of the Property of a description of the property upon which levy is made.
Taxpayer. - To safeguard the interest of the Government,
the Commissioner may place under constructive distraint At the same time, written notice of the levy shall be mailed
the property of a delinquent taxpayer or any taxpayer who, to or served upon the Register of Deeds for the province
in his opinion, is retiring from any business subject to tax, or city where the property is located and upon the
or is intending to leave the Philippines or to remove his delinquent taxpayer, or if he be absent from the
property therefrom or to hide or conceal his property or to Philippines, to his agent or the manager of the business in
perform any act tending to obstruct the proceedings for respect to which the liability arose, or if there be none, to
collecting the tax due or which may be due from him. the occupant of the property in question. cralaw

The constructive distraint of personal property shall be In case the warrant of levy on real property is not issued
affected by requiring the taxpayer or any person having before or simultaneously with the warrant of distraint on
possession or control of such property to sign a receipt personal property, and the personal property of the
covering the property distrained and obligate himself to taxpayer is not sufficient to satisfy his tax delinquency,
preserve the same intact and unaltered and not to dispose the Commissioner or his duly authorized representative
of the same ;in any manner whatever, without the express shall, within thirty (30) days after execution of the
authority of the Commissioner. distraint, proceed with the levy on the taxpayer's real
property. cralaw
In case the taxpayer or the person having the possession
and control of the property sought to be placed under Within ten (10) days after receipt of the warrant, a report
constructive distraint refuses or fails to sign the receipt on any levy shall be submitted by the levying officer to the
herein referred to, the revenue officer effecting the Commissioner or his duly authorized
constructive distraint shall proceed to prepare a list of representative: Provided, however, That a consolidated
such property and, in the presence of two (2) witnessed, report by the Revenue Regional Director may be required
leave a copy thereof in the premises where the property by the Commissioner as often as necessary: Provided,
distrained is located, after which the said property shall be further, That the Commissioner or his duly authorized
deemed to have been placed under constructive distraint. representative, subject to rules and regulations
promulgated by the Secretary of Finance, upon
SEC. 207. Summary Remedies. - recommendation of the Commissioner, shall have the
authority to lift warrants of levy issued in accordance with
(A) Distraint of Personal Property. - Upon the failure of the the provisions hereof.
person owing any delinquent tax or delinquent revenue to
pay the same at the time required, the Commissioner or SEC. 208. Procedure for Distraint and Garnishment. - The
his duly authorized representative, if the amount involved officer serving the warrant of distraint shall make or cause
is in excess of One million pesos (P1,000,000), or the to be made an account of the goods, chattels, effects or
Revenue District Officer, if the amount involved is One other personal property distrained, a copy of which,
million pesos (P1,000,000) or less, shall seize and distraint signed by himself, shall be left either with the owner or
any goods, chattels or effects, and the personal property, person from whose possession such goods, chattels, or
including stocks and other securities, debts, credits, bank effects or other personal property were taken, or at the
accounts, and interests in and rights to personal property dwelling or place of business of such person and with
of such persons ;in sufficient quantity to satisfy the tax, or someone of suitable age and discretion, to which list shall
charge, together with any increment thereto incident to be added a statement of the sum demanded and note of
delinquency, and the expenses of the distraint and the the time and place of sale. cralaw
cost of the subsequent sale. cralaw
Stocks and other securities shall be distrained by serving
A report on the distraint shall, within ten (10) days from a copy of the warrant of distraint upon the taxpayer and
receipt of the warrant, be submitted by the distraining upon the president, manager, treasurer or other
officer to the Revenue District Officer, and to the Revenue responsible officer of the corporation, company or
Regional Director: Provided, That the Commissioner or his association, which issued the said stocks or
duly authorized representative shall, subject to rules and securities. cralaw
regulations promulgated by the Secretary of Finance,
upon recommendation of the Commissioner, have the Debts and credits shall be distrained by leaving with the
power to lift such order of distraint: Provided, further, That person owing the debts or having in his possession or
a consolidated report by the Revenue Regional Director under his control such credits, or with his agent, a copy of
may be required by the Commissioner as often as the warrant of distraint.
necessary. cralaw
The warrant of distraint shall be sufficient authority to the
(B) Levy on Real Property.- After the expiration of the time person owning the debts or having in his possession or
required to pay the delinquent tax or delinquent revenue under his control any credits belonging to the taxpayer to
as prescribed in this Section, real property may be levied pay to the Commissioner the amount of such debts or
upon, before simultaneously or after the distraint of credits. cralaw
personal property belonging to the delinquent.
Bank accounts shall be garnished by serving a warrant of
To this end, any internal revenue officer designated by the garnishment upon the taxpayer and upon the president,
Commissioner or his duly authorized representative shall manager, treasurer or other responsible officer of the
prepare a duly authenticated certificate showing the name bank.
of the taxpayer and the amounts of the tax and penalty
due from him. Upon receipt of the warrant of garnishment, the bank shall
tun over to the Commissioner so much of the bank
accounts as may be sufficient to satisfy the claim of the regulations prescribed by the Secretary of Finance, the net
Government. proceeds therefrom shall be remitted to the National
Treasury and accounted for as internal revenue.
SEC. 209. Sale of Property Distrained and Disposition of
Proceeds. - The Revenue District Officer or his duly SEC. 213. Advertisement and Sale. - Within twenty (20)
authorized representative, other than the officer referred days after levy, the officer conducting the proceedings
to in Section 208 of this Code shall, according to rules and shall proceed to advertise the property or a usable portion
regulations prescribed by the Secretary of Finance, upon thereof as may be necessary to satisfy the claim and cost
recommendation of the Commissioner, forthwith cause a of sale; and such advertisement shall cover a period of a
notification to be exhibited in not less than two (2) public least thirty (30) days.
places in the municipality or city where the distraint is
made, specifying; the time and place of sale and the It shall be effectuated by posting a notice at the main
articles distrained. entrance of the municipal building or city hall and in
public and conspicuous place in the barrio or district in
The time of sale shall not be less than twenty (20) days which the real estate lies and ;by publication once a week
after notice. for three (3) weeks in a newspaper of general circulation in
the municipality or city where the property is located.
One place for the posting of such notice shall be at the
Office of the Mayor of the city or municipality in which the The advertisement shall contain a statement of the amount
property is distrained. cralaw of taxes and penalties so due and the time and place of
sale, the name of the taxpayer against whom taxes are
At the time and place fixed in such notice, the said levied, and a short description of the property to be sold.
revenue officer shall sell the goods, chattels, or effects, or
other personal property, including stocks and other At any time before the day fixed for the sale, the taxpayer
securities so distrained, at public auction, to the highest may discontinue all proceedings by paying the taxes,
bidder for cash, or with the approval of the Commissioner, penalties and interest.
through duly licensed commodity or stock
exchanges. cralaw If he does not do so, the sale shall proceed and shall be
held either at the main entrance of the municipal building
In the case of Stocks and other securities, the officer or city hall, or on the premises to be sold, as the officer
making the sale shall execute a bill of sale which he shall conducting the proceedings shall determine and as the
deliver to the buyer, and a copy thereof furnished the notice of sale shall specify. cralaw
corporation, company or association which issued the
stocks or other securities. Within five (5) days after the sale, a return by the
distraining or levying officer of the proceedings shall be
Upon receipt of the copy of the bill of sale, the entered upon the records of the Revenue Collection
corporation, company or association shall make the Officer, the Revenue District officer and the Revenue
corresponding entry in its books, transfer the stocks or Regional Director.
other securities sold in the name of the buyer, and issue, if
required to do so, the corresponding certificates of stock The Revenue Collection Officer, in consultation with the
or other securities. cralaw Revenue district Officer, shall then make out and deliver to
the purchaser a certificate from his records, showing the
Any residue over and above what is required to pay the proceedings of the sale, describing the property sold
entire claim, including expenses, shall be returned to the stating the name of the purchaser and setting out the
owner of the property sold. exact amount of all taxes, penalties and interest: Provided,
however, That in case the proceeds of the sale exceeds
The expenses chargeable upon each seizure and sale the claim and cost of sale, the excess shall be turned over
shall embrace only the actual expenses of seizure and to the owner of the property. cralaw
preservation of the property pending ;the sale, and no
charge shall be imposed for the services of the local The Revenue Collection Officer, upon approval by the
internal revenue officer or his deputy. Revenue District Officer may, out of his collection,
advance an amount sufficient to defray the costs of
SEC. 210. Release of Distrained Property Upon Payment collection by means of the summary remedies provided
Prior to Sale. -If at any time prior to the consummation of for in this Code, including ;the preservation or
the sale all proper charges are paid to the officer transportation in case of personal property, and the
conducting the sale, the goods or effects distrained shall advertisement and subsequent sale, both in cases of
be restored to the owner. personal and real property including improvements found
on the latter.
SEC. 211. Report of Sale to Bureau of Internal Revenue. -
Within two (2) days after the sale, the officer making the In his monthly collection reports, such advances shall be
same shall make a report of his proceedings in writing to reflected and supported by receipts.
the Commissioner and shall himself preserve a copy of
such report as an official record. SEC. 214. Redemption of Property Sold. - Within one (1)
year from the date of sale, the delinquent taxpayer, or any
SEC. 212. Purchase by Government at Sale Upon Distraint. one for him, shall have the right of paying to the Revenue
- When the amount bid for the property under distraint is District Officer the amount of the public taxes, penalties,
not equal to the amount of the tax or is very much less and interest thereon from the date of delinquency to the
than the actual market value of the articles offered for date of sale, together with interest on said purchase price
sale, the Commissioner or his deputy may purchase the at the rate of fifteen percent (15%) per annum from the
same in behalf of the national Government for the amount date of purchase to the date of redemption, and such
of taxes, penalties and costs due thereon.cralaw payment shall entitle the person paying to the delivery of
the certificate issued to the purchaser and a certificate
Property so purchased may be resold by the from the said Revenue District Officer that he has thus
Commissioner or his deputy, subject to the rules and redeemed the property, and the Revenue District Officer
shall forthwith pay over to the purchaser the amount by province or city where the property of the taxpayer is
which such property has thus been redeemed, and said situated or located.
property thereafter shall be free form the lien of such
taxes and penalties. cralaw SEC. 220. Form and Mode of Proceeding in Actions
Arising under this Code. - Civil and criminal actions and
The owner shall not, however, be deprived of the proceedings instituted in behalf of the Government under
possession of the said property and shall be entitled to the authority of this Code or other law enforced by the
the rents and other income thereof until the expiration of Bureau of Internal Revenue shall be brought in the name
the time allowed for its redemption. of the Government of the Philippines and shall be
conducted by legal officers of the Bureau of Internal
SEC. 215. Forfeiture to Government for Want of Bidder. - In Revenue but no civil or criminal action for the recovery of
case there is no bidder for real property exposed for sale taxes or the enforcement of any fine, penalty or forfeiture
as herein above provided or if the highest bid is for an under this Code shall be filed in court without the approval
amount insufficient to pay the taxes, penalties and costs, of the Commissioner.
the Internal Revenue Officer conducting the sale shall
declare the property forfeited to the Government in SEC. 221. Remedy for Enforcement of Statutory Penal
satisfaction of the claim in question and within two (2) Provisions. - The remedy for enforcement of statutory
days thereafter, shall make a return of his proceedings penalties of all sorts shall be by criminal or civil action, as
and the forfeiture which shall be spread upon the records the particular situation may require, subject to the
of his office. approval of the Commissioner.

It shall be the duty of the Register of Deeds concerned, SEC. 222. Exceptions as to Period of Limitation of
upon registration with his office of any such declaration of Assessment and Collection of Taxes. -
forfeiture, to transfer the title of the property forfeited to
the Government without the necessity of an order from a (a) In the case of a false or fraudulent return with intent to
competent court. cralaw evade tax or of failure to file a return, the tax may be
assessed, or a proceeding in court for the collection of
Within one (1) year from the date of such forfeiture, the such tax may be filed without assessment, at any time
taxpayer, or any one for him may redeem said property by within ten (10) years after the discovery of the falsity,
paying to the Commissioner or the latter's Revenue fraud or omission: Provided, That in a fraud assessment
Collection Officer the full amount of the taxes and which has become final and executory, the fact of fraud
penalties, together with interest thereon and the costs of shall be judicially taken cognizance of in the civil or
sale, but if the property be not thus redeemed, the criminal action for the collection thereof.
forfeiture shall become absolute.
(b) If before the expiration of the time prescribed in
SEC. 216. Resale of Real Estate Taken for Taxes. - The Section 203 for the assessment of the tax, both the
Commissioner shall have charge of any real estate Commissioner and the taxpayer have agreed in writing to
obtained by the Government of the Philippines in payment its assessment after such time, the tax may be assessed
or satisfaction of taxes, penalties or costs arising under within the period agreed upon.
this Code or in compromise or adjustment of any claim
therefore, and said Commissioner may, upon the giving of The period so agreed upon may be extended by
not less than twenty (20) days notice, sell and dispose of subsequent written agreement made before the expiration
the same of public auction or with prior approval of the of the period previously agreed upon.
Secretary of Finance, dispose of the same at private sale.
(c) Any internal revenue tax which has been assessed
In either case, the proceeds of the sale shall be deposited within the period of limitation as prescribed in paragraph
with the National Treasury, and an accounting of the same (a) hereof may be collected by distraint or levy or by a
shall rendered to the Chairman of the Commission on proceeding in court within five (5) years following the
Audit. assessment of the tax.

SEC. 217. Further Distraint or Levy. - The remedy by (d) Any internal revenue tax, which has been assessed
distraint of personal property and levy on realty may be within the period agreed upon as provided in paragraph
repeated if necessary until the full amount due, including (b) hereinabove, may be collected by distraint or levy or by
all expenses, is collected. a proceeding in court within the period agreed upon in
writing before the expiration of the five (5) -year period.
SEC. 218. Injunction not Available to Restrain Collection of
Tax. - No court shall have the authority to grant an The period so agreed upon may be extended by
injunction to restrain the collection of any national internal subsequent written agreements made before the
revenue tax, fee or charge imposed by this Code. expiration of the period previously agreed upon.

SEC. 219. Nature and Extent of Tax Lien. - If any person, (e) Provided, however, That nothing in the immediately
corporation, partnership, joint-account (cuentas en preceding and paragraph (a) hereof shall be construed to
participacion), association or insurance company liable to authorize the examination and investigation or inquiry into
pay an internal revenue tax, neglects or refuses to pay the any tax return filed in accordance with the provisions of
same after demand, the amount shall be a lien in favor of any tax amnesty law or decree.
the Government of the Philippines from the time when the
assessment was made by the Commissioner until paid, SEC. 223. Suspension of Running of Statute of
with interests, penalties, and costs that may accrue in Limitations. - The running of the Statute of Limitations
addition thereto upon all property and rights to property provided in Sections 203 and 222 on the making of
belonging to the taxpayer: Provided, That this lien shall assessment and the beginning of distraint or levy a
not be valid against any mortgagee purchaser or judgment proceeding in court for collection, in respect of any
creditor until notice of such lien shall be filed by the deficiency, shall be suspended for the period during which
Commissioner in the office of the Register of Deeds of the the Commissioner is prohibited from making the
assessment or beginning distraint or levy or a proceeding
in court and for sixty (60) days thereafter; when the PROTESTING AN ASSESSMENT, REFUND, ETC.
taxpayer requests for a reinvestigation which is granted
by the Commissioner; when the taxpayer cannot be chanrobles virtual law library
located in the address given by him in the return filed
upon which a tax is being assessed or SEC. 228. Protesting of Assessment. - When the
collected:Provided, that, if the taxpayer informs the Commissioner or his duly authorized representative finds
Commissioner of any change in address, the running of that proper taxes should be assessed, he shall first notify
the Statute of Limitations will not be suspended; when the the taxpayer of his findings: Provided, however, That a
warrant of distraint or levy is duly served upon the preassessment notice shall not be required in the
taxpayer, his authorized representative, or a member of following cases:
his household with sufficient discretion, and no property
(a) When the finding for any deficiency tax is the result of
could be located; and when the taxpayer is out of the
mathematical error in the computation of the tax as
appearing on the face of the return; or(b) When a
SEC. 224. Remedy for Enforcement of Forfeitures. - The discrepancy has been determined between the tax
forfeiture of chattels and removable fixtures of any sort withheld and the amount actually remitted by the
shall be enforced by the seizure and sale, or destruction, withholding agent; or(c) When a taxpayer who opted to
of the specific forfeited property. claim a refund or tax credit of excess creditable
withholding tax for a taxable period was determined to
The forfeiture of real property shall be enforced by a have carried over and automatically applied the same
judgment of condemnation and sale in a legal action or amount claimed against the estimated tax liabilities for the
proceeding, civil or criminal, as the case may require. taxable quarter or quarters of the succeeding taxable year;
or(d) When the excise tax due on exciseable articles has
SEC. 225. When Property to be Sold or Destroyed. - Sales not been paid; or(e) When the article locally purchased or
of forfeited chattels and removable fixtures shall be imported by an exempt person, such as, but not limited to,
effected, so far as practicable, in the same manner and vehicles, capital equipment, machineries and spare parts,
under the same conditions as the public notice and the has been sold, traded or transferred to non-exempt
time and manner of sale as are prescribed for sales of persons.
personal property distrained for the non-payment of taxes.
The taxpayers shall be informed in writing of the law and
Distilled spirits, liquors, cigars, cigarettes, other the facts on which the assessment is made; otherwise, the
manufactured products of tobacco, and all apparatus used assessment shall be void.
I or about the illicit production of such articles may, upon
forfeiture, be destroyed by order of the Commissioner, Within a period to be prescribed by implementing rules
when the sale of the same for consumption or use would and regulations, the taxpayer shall be required to respond
be injurious to public health or prejudicial to the to said notice.
enforcement of the law. cralaw
If the taxpayer fails to respond, the Commissioner or his
All other articles subject to excise tax, which have been duly authorized representative shall issue an assessment
manufactured or removed in violation of this Code, as well based on his findings. cralaw
as dies for the printing or making of internal revenue
stamps and labels which are in imitation of or purport to Such assessment may be protested administratively by
be lawful stamps, or labels may, upon forfeiture, be sold filing a request for reconsideration or reinvestigation
or destroyed in the discretion of the Commissioner. cralaw within thirty (30) days from receipt of the assessment in
such form and manner as may be prescribed by
Forfeited property shall not be destroyed until at least implementing rules and regulations. cralaw
twenty (20) days after seizure.
Within sixty (60) days from filing of the protest, all relevant
SEC. 226. Disposition of funds Recovered in Legal supporting documents shall have been submitted;
Proceedings or Obtained from Forfeitures. - all judgments otherwise, the assessment shall become final. cralaw
and monies recovered and received for taxes, costs,
forfeitures, fines and penalties shall be paid to the If the protest is denied in whole or in part, or is not acted
Commissioner or his authorized deputies as the taxes upon within one hundred eighty (180) days from
themselves are required to be paid, and except as submission of documents, the taxpayer adversely affected
specially provided, shall be accounted for and dealt with by the decision or inaction may appeal to the Court of Tax
the same way. Appeals within thirty (30) days from receipt of the said
decision, or from the lapse of one hundred eighty (180)-
SEC. 227. Satisfaction of Judgment Recovered Against day period; otherwise, the decision shall become final,
any Internal Revenue Officer. - When an action is brought executory and demandable.
against any Internal Revenue officer to recover damages
by reason of any act done in the performance of official SEC. 229. Recovery of Tax Erroneously or Illegally
duty, and the Commissioner is notified of such action in Collected. - no suit or proceeding shall be maintained in
time to make defense against the same, through the any court for the recovery of any national internal revenue
Solicitor General, any judgment, damages or costs tax hereafter alleged to have been erroneously or illegally
recovered in such action shall be satisfied by the assessed or collected, or of any penalty claimed to have
Commissioner, upon approval of the Secretary of Finance, been collected without authority, of any sum alleged to
or if the same be paid by the person used shall be repaid have been excessively or in any manner wrongfully
or reimbursed to him. collected without authority, or of any sum alleged to have
been excessively or in any manner wrongfully collected,
No such judgment, damages, or costs shall be paid or until a claim for refund or credit has been duly filed with
reimbursed in behalf of a person who has acted the Commissioner; but such suit or proceeding may be
negligently or in bad faith, or with willful oppression. maintained, whether or not such tax, penalty, or sum has
been paid under protest or duress. cralaw
In any case, no such suit or proceeding shall be filed after
the expiration of two (2) years from the date of payment of
the tax or penalty regardless of any supervening cause
that may arise after payment: Provided, however, That the
Commissioner may, even without a written claim therefor,
refund or credit any tax, where on the face of the return
upon which payment was made, such payment appears
clearly to have been erroneously paid.

SEC. 230. Forfeiture of Cash Refund and of Tax Credit. -

(A) Forfeiture of Refund.- A refund check or warrant

issued in accordance with the pertinent provisions of this
Code, which shall remain unclaimed or uncashed within
five (5) years from the date the said warrant or check was
mailed or delivered, shall be forfeited in favor of the
Government and the amount thereof shall revert to the
general fund. cralaw

(B) Forfeiture of Tax Credit. - A tax credit certificate issued

in accordance with the pertinent provisions of this Code,
which shall remain unutilized after five (5) years from the
date of issue, shall, unless revalidated, be considered
invalid, and shall not be allowed as payment for internal
revenue tax liabilities of the taxpayer, and the amount
covered by the certificate shall revert to the general fund.

(C) Transitory Provision. - For purposes of the preceding

Subsection, a tax credit certificate issued by the
Commissioner or his duly authorized representative prior
to January 1, 1998, which remains unutilized or has a
creditable balance as of said date, shall be presented for
revalidation with the Commissioner or his duly authorized
representative or on before June 30, 1998.

SEC. 231. Action to Contest Forfeiture of Chattel. - In case

of the seizure of personal property under claim of
forfeiture, the owner desiring to contest the validity of the
forfeiture may, at any time before sale or destruction of
the property, bring an action against the person seizing
the property or having possession thereof to recover the
same, and upon giving proper bond, may enjoin the sale;
or after the sale and within six (6) months, he may bring an
action to recover the net proceeds realized at the sale.