TAXATION LAW REVIEW. Sababan. 2008 ed.

Ppg 181-200
CHAPTER XXI: REMEDIES
There are two remedies provided in the NIRC:
1. The remedies of the Government, and
2. The remedies of the taxpayer
A.THE REMEDIES OF THE GOVERNMENT
The Code provides the Government with TWO remedies:
(1) Assessment, and
(2) Collection
2 KINDS OF ASSESSMENT AND COLLECTION:
(a) Normal or ordinary assessment and collection Sec.
203; and
(b) The Abnormal or extraordinary assessment and
collection Sec. 222
NORMAL OR ORDINARY ASSESSMENT AND COLLECTION (Sec.
203)
: available to the Government if there was a return filed by
the taxpayer and such return is not FALSE OR
FRAUDULENT
: Govt may only make the assessment under this section
w/in 3 years after the last day prescribed by law for the
filing of the return NOT FROM THE TIME OF PAYMENT.
: when the return is filed beyond the period of filing
prescribed by law, the 3year period shall be counted from
the day of the filing of the return
2 INSTANCES CONTEMPLATED THIS SECTION:
FIRST
SECOND
the return is filed BEFORE/ AT when the return is filed beyond
THE TIME prescribed by law the period prescribed by law.
w/c is ON OR BEFORE APRIL
15 of each year covering the
income for the preceding taxable
year for those using the calendar
year; (Sec 51 c 1)OR
-- the return is filed
BEFORE/ AT THE TIME
prescribed by law w/c is ON
OR BEFORE the 15th day of the
FOURTH MONTH following the
close of the FISCAL YEAR for
those using the fiscal year (Sec
77B)
PRESCRIPTIVE PERIOD
begins to run from the deadline: begins to run from the time the
April 15 or the 15th day of the 4th return is filed.
month following the close of the
fiscal year.

Q: Suppose the return for the calendar year 2006 is filed by the
taxpayer on April 10, 2007, when will the prescriptive period
begin to run?
A: the prescriptive period will begin to run AFTER APRIL 15, 2007
the DEADLINE for filing the return for 2006
Q: Suppose the return for 2005 was filed on April 12, 2007, when
will the prescriptive period begin to run?
A: the period will commence from ARPIL 12, 2007.
A careful analysis of the case wouls show that the return was filed
beyond the period for filing the return. The return was for the
calendar year 2005 (thus, the return should have been filed before
April 15, 2006) but only filed in 2007. The return was filed long
AFTER the deadline. Thus, the prescription period should commence
from the date the return is filed APRIL 12, 2007.
Note: for collection, the Code does not provide for a prescriptive
period.
Authors note: the prescriptive period for abnormal is 5
years from assessment, hence it can be concluded that the
prescriptive period for normal is also 5 years. It will create an absurd
situation where there is no prescriptive period under the normal but
there is a prescriptive period for abnormal. It is more logical to
conclude that the legislature intended to provide a prescriptive period
under the normal collection.
ABNORMAL OR
COLLECTION

EXTRAORDINARY

ASSESSMENT

AND

: resorted to by the Govt in the ff cases: (OFF)

(1) The taxpayer OMITS or FAILS to file his return
(2) The taxpayer FILED a return but the return was
FRAUDULENT
(3) The return filed by the taxpayer was FALSE.
: an error in the return filed by the taxpayer does not imply
fraud or that the same is FALSE.
: legal presumption the return filed is TRUE and
CORRECT. the burden of proof lies in the govt to prove that such
return is fraudulent or false.
2 REMEDIES (options) THIS KIND OF ASSESSMENT AND
COLLECTION:
(1) assess and collect, and
(2) collection w/o assessment
(1) For assessment and collection prescriptive period is 10years
from the DISCOVERY of the non-filing of the return or the
fraudulent or false return. (Sec 222 a)

NOTES

TAXATION LAW REVIEW. Sababan. 2008 ed. Ppg 181-200

period for collection prescribes AFTER 5 years
date of FINAL ASSESSMENT (Sec 222 c)

from

(2) Govt opts to collect w/o assessment there would be NO

PRESCRIPTIVE PERIOD for assessment.

w/in 30days fr receipt of

FAN

period for collection prescribes within 10years

from the DISCOVERY of the non-filing of the return or the
fraudulent
or false return.

FILE A PROTEST:
2 KINDS OF PROTESTS:
(1) Motion for reconsideration
-60 day period NOT applicable

Q: Can the BIR just collect w/o assessment?

A: Fortune Tobacco case YES. Since the return filed was
FRAUDULENT, the BIR can avail of the remedy of collection
without assessment. The BIR is allowed to exercise that
option.

(2) Motion for reinvestigation

60 days from filing of protest

B.PROCEDURE FOR ASSESSMENT (Sec228; RR No. 1299

SUBMIT COMPLETE SET OF
DOCUMENTS

Sec 228 provides for 2 STEPS for ASSESSMENT:

(1) pre-assessment notice; and
(2) final assessment notice

BIR IS GIVEN 180 DAYS TO

DECIDE

RR No. 12-99 provides for 3 STEPS:

(1) notice of informal conference;
(2) preliminary notice of assessment (PAN);
(3) formal letter of demand and notice to pay the
tax (FAN).

PROTEST IS DENIED; or
180 HAS LAPSED

PROCEDURE FOR ASSESSMENT:

Notice of Informal Conference

W/in 30 days from

w/in 15 days from receipt of notice

denial/lapse
APPEAL to the Court of Tax
Appeals IN DIVISION

FILE A REPLY

W/in 15 days from receipt

FAILED TO FILE A REPLY

FILED A REPLY
Motion for Reconsideration with
the DIVISION

SEND NOTCIE AGAIN

PRELIMINARY NOTICE OF
ASSESSMENT (PAN)

15 days upon receipt

of PAN

W/in 15 days from receipt

APPEAL to the Court of Tax
Appeals EN BANC

FILE A REPLY

W/in 15 days from receipt

APPEAL to the
SUPREME COURT
FAILED TO FILE A REPLY

REPEAT PAN

DECLARE IN DEFAULT, SEND

FORMAL LETTER OF
DEMAND AND NOTICE TO
PAY TAX (FAN)

NOTES

TAXATION LAW REVIEW. Sababan. 2008 ed. Ppg 181-200

(1) The taxpayer having received a
PAN, fails to respond within the
period provided for by the rules and
regulations (Sec 228, last par)
(2) the five instances enumerated
Sec 228 where pre-assessment is
NOT necessary.
a. PRE-ASSESSMENT NOTICE (PAN)
As a rule: PAN is issued to a taxpayer
- who fails to file a return, or
- files a return but fails pay the tax,
- pays the tax, but the same is
INSUFFICIENT
CES)

Sec 228, when is PAN NOT NECESSARY: (MD

FAN IS ISSUED IN THESE INSTANCES

(1) When the finding for deficiency tax

is the result of MATHEMATICAL
ERROR in the computation of the
tax appearing on the face of the
return;
(2) When a DISCREPANCY has been
determined between the tax
withheld and the amount actually
remitted by the withholding agent;
(3) When a taxpayer who opted to claim
a refund or tax credit of excess
creditable withholding tax for a
taxable period was determined to
have CARRIED OVER and
automatically applies the same
amount claimed against the
estimated tax liabilities for the
taxable quarter or quarters of the
succeeding taxable year;
(4) When the EXCISE TAX DUE on
excisable articles has not been paid;
(5) When an article locally purchased or
imported by an exempt person, such
as, but not limited to, vehicles,
capital equipment, machineries and
spare parts, has been SOLD,
TRADED OR TRANSFERRED TO
NON-EXEMPT PERSONS.

In the foregoing instances, the taxpayer shall

receive a final assessment notice without the
benefit of a pre-assessment notice.
b. FINAL ASSESSMENT NOTICE (FAN)
from the flowchart, FAN is issued when:

c. PROTEST
after receipt of FAN, taxpayer immediately
appeal to
the CTA.

: BEFORE AN APPEAL, a PROTEST must FIRST

be FILED by the taxpayer.
PROTEST an action disputing the final assessment.
: in accordance w/ the rule in Admin Law - the
exhaustion
of administrative remedies.
days w/in

: after filing protest, BIR given a period of 180

w/c to decide on the matter.

IF MR: the 180-day period is to be committed on

the day the protest has been filed.
IF MI: the 180-day period shall be reckoned on the
day the documents or receipts were filed with the 60-day
period of time.
period
appeal
lapse of
FINAL,

: Upon denial of the protest/ lapse of the 180-day

w/o the BIR acting on the protest, the tacpayer may
to the CTA w/in 30days from receipt of the dnial or
the period; otherwise the decision shall become
EXECUTORY and DEMANDABLE.

Q: If the taxpayer, during the pendency of his protest,

received a notice of an action for collection filed by the
BIR, what is his proper remedy?
A: Yabes v. Flojo + Union Shipping Lines v. Commissioner
SC held that the subsequent filing of a collection suit by the
BIR
may be considered as a denial of the request for
protest, hence, the proper remedy of the taxpayer is to
appeal the
denial to the CTA.
d. APPEAL TO THE CTA
if protest is DENIED, in whole or in part;
or the 180-day period has already lapsed w/o
the BIR acting upon the protest
taxpayer may appeal the denial to the CTA w/in
30days from the receipt of the denial or the lapse of the
period
NOTES

TAXATION LAW REVIEW. Sababan. 2008 ed. Ppg 181-200

Q:PENDING APPEAL, can the BIR still amend the final
assessment?
A: 2 VIEWS:
1. Batangas v. Collector SC held that the BIR
may still amend the assessment during the
pendency of the appeal to avoid multiplicity of
suits.
2.

Guerrerro v. Commissioner SC held that BIR

amend the assessment SINCE IT IS NO
LONGER A DISPUTED ASSESSMENT.
Authors Note: favors the first ruling.

e. APPEAL TO THE SC
after appealing to CTA, and after rendering an
unafvorable decision, taxpayer may file a motion for
reconsideration of said decision within 15 dyas from receipt
of the decision of the CTA sitting IN DIVISION.

(2) Real Property Tax

(3) Tariff and Customs Code
NB: A 4th may be added ADMIN PROTEST NIRC.
1. PROTEST LOCAL TAX (Sec 195, LGC)
LGC provides: when the local treasurer or his duly
authorized representative finds that correct taxes,
fees, or charges have not been paid, he shall issue a notice
of
assessment stating the nature of the tax, fee, or
charge the
amount of deficiency, the surcharges,
interest and
penalties.
: it is from this assessment that the taxpayer may
file a
protest w/in 60days from receipt of notice of
assessment. If
taxpayer does not file the protest w/in
said period, the
assessment shall become final and
executor.
:local treasures shall decide the protest within
60days from
its filing. He may either grant/deny the
protest.
partly,

En Banc.

if decision is still UNFAVORABLE, to the CTA

if CTA EB still renders an unfavourable

decision, taxpayer has remedy to file PETITION FOR
CERTIORARI RULE 65, only on the ground of GRAVE
ABUSE OF DISCRETION amounting to lack/excess of
jurisdiction.
SEVERAL
INSTANCES
WHERE
THE
FINAL
ASSESSMENT BECOMES FINAL AND EXECUTORY:
(SONA)
(1) SUPPORTING DOCUMENTS NOT filed w/in
the 60-day period

the

: GRANT if he finds that it is, wholly or

meritorious.
- he shall issue a notice
CANCELING wholly or partly
assessment.

finds that
partly
NOTICE to the taxpayer

: DENY wholly/party, if he
the assessment is wholly or
CORRECT,
w/

: the taxpayer is given a period of 30days from

receipt of
denial or the lapse of the 60-day period,
w/in w/c to appeal to the court of competent jurisdiction
RTC.
: RTC renders unfavourable decision, TP may
CTA EN BANC is still unfavourable

(2) Protest NOT filed ON TIME;

appeal to
SC.

(3) NO APPEAL was filed with the CTA w/in

30days after the lapse of the 180-day period;
and

2. PROTEST REAL PROPERTY TAX (Secs 226, 230, 252

LGC)

(4) There was an APPEAL FILED but it was

BEYOND the period to appeal.

: made by a TP who is not satisfied with the action of the

provincial, city or municipal assessor in the assessment of
his property.

C.FORMS OF PROTEST
: Protest is a remedy afforded to the taxpayer in
cases where the BIR issues a final assessment to the
taxpayer .
3 FORMS OF PROTEST AFFORDED TO THE TAXPAYER:
(1) Local Tax

written

: TP may, w/in 60days from date of receipt of the

notice of assessment, appeal to the Local Board of
Assessment Appeals (LBAA) of the province or city.

: BEFORE
ENTERTAINED, Sec
FIRST PAYS THE TAX.
PROTEST)

THIS PROTEST MAY BE

252 LGC requires TP
(PAYMENT
UNDER

NOTES

TAXATION LAW REVIEW. Sababan. 2008 ed. Ppg 181-200

: Protest may only be filed w/in 30 days from the
payment of the tax. (the words paid under protest shall be
annotated on the tax receipt)
: LBAA shall decide w/in 120 days from receipt of
the
appeal. The Board after hearing, shall render a
decision based on substantial evidence.
: LBAA- renders unfavourable decision, TP may
appeal to
the Central Board of Assessment
Appeals (CBAA) if
still unfavourable CTA then
to SC.
3. PROTEST THE TARIFF AND CUSTOMS CODE (Sec
2313, as amdd by RA No. 7651)
: appeals TCC include those requests for protests as well
as for FORFEITURES.
FIRST SITUATION TCC:
: if importer loses his case, remedy = APPEAL
w/in 15 days OFFICE OF THE COMMISSIONER
: Commr rules for the Govt importer may file
appeal to
the CTA sitting IN DIVISION w/in 30 days
from recipt of the decision.
: CTA for Govt importer to file MR before the
same
division w/in 15days still unfavourable
appeal before
the CTA En Banc.
: CTA EB still unfavourable, importer appeal w/in
15 days from receipt of decision SC
SECOND SITUATION TCC:
: importer prevails over the government.
: in this case, there will be an AUTOMATIC
REVIEW w/n 5days.
: AUTOMATIC REVIEW shall be filed before
1. SEC of FINANCE if value of commodity =
P5M or
2. Office of Commr if value of commodity is <
P5M
: in 2 above, the Commr is given a period of 30dyas w/in w/c
to decide.
: if Commr REVERSES the ruling, he rules for
the Govt, this decision shall become FINAL AND
EXECUTORY.
: if Commr AFFIRMS the Collector/ does not
render a decision w/in 30-day period, then AUTOMATIC
REVIEW before the Sec of Finance.

: from this Atutomatic Review the decision of the

Sec if unfavourable to importer-TP, shall be appealable
to CTA.
( what is appealable is the Secs decision from
AR of
Commrs decision RA 9282.)
D. COMPROMISE
Commr may compromise payment of any internal revenue
tax 2 INSTANCES:
(1) When a reasonable doubt exists as to the
validity of the claim the TP
(2) When the financial position of the TP
demonstrates a clear inability to pay the
assessed tax.
Q: May the govt compromise both criminal and civil
cases? Suppose the civil case is already final and
executory, can it still be subject to compromise?
A: in civil cases, the govt may compromise the liability of the
TP at ANY STAGE of the proceeding except when the case
is already final and executory. In this case, if the govt would
allow a compromise even if the case is already final and
executory, the doctrine of separation of powers will be
violated.
In criminal cases, compromise is allowed except if the
criminal case is already filed before the RTC or if the case
involves fraud.
Q: Suppose the corporation is already dissolved, can the
stockholder still be compelled to pay the tax liability?
A: GR: NO.
2 EXECEPTIONS: (1) there is evidence to prove
that the assets of the corporation were taken by the SH; or
(2) if the SH has unpaid subscription.
: the amount to be compromised limited by the Code. For
cases of financial incapacity, the minimum rate shall be
equivalent to 10% of the basic assessed tax. For other
cases, the minimum rate shall be equivalent to 40% of the
basic assessed tax. In other words, the minimum amount to
be assessed shall be:
(1) In cases of financial inacapacity not < 10%
of the original assessment; and
(2) For other cases, not < 40% of the original
assessment.
Q: Is there any instance where the amount assessed is
lower than the limitations provided?
A: GR: the compromised amount should not be lower than
the limitations provided by the Code.
EXC: where the basic tax involved exceeds P1M or where
the settlement offered is less than the prescribed rates, the
compromise shall be subject to the approval of the
NOTES

TAXATION LAW REVIEW. Sababan. 2008 ed. Ppg 181-200

Evaluation Board w/c shall be composed of the Commr and 4
Deputy Commrs.
E. REMEDIES FOR COLLECTION OF DELINQUENT
TAXES (Sec 205))
2 GROUPS OF REMEDIES PROVIDED BY THE CODE:
1. JUDICIAL ACTION:
a. Civil action
b. Criminal action
2. ADMINISTRATIVE ACTION
a. Distraint
b. Levy
c. Tax lien
NB: a determination of whether the final assessment is under
normal/abnormal assessment/collection is material in order to
determine the remedies available to the govt.
in case of abnormal, where the return filed is
false or fraudulent, the govt may not only avail of judicial
action, also of levy or distraint.
F. DISTRAINT
3 KINDS OF DISTRAINT:
1. Constructive
2. Distraint of intangible properties
3. Actual Distraint
(1) CONSTRUCTIVE DISTRAINT (Sec 206)
the Commr may place CD the property of a delinquent
TP or any TP who in his opinion is:
(1) Retiring from any business subject to tax;

in any manne whatever, w/o the authority of

the Commr.
if TP or person authorized REFUSES/ FAILS to
sign receipt, the revenue officer effecting the CD shall
proceed to prepare a list of such property and in the
presence of 2 witnesses, leave a copy thereof in the
premises where the property distrained is located, after w/c
the said property shall be deemed to have been placed
CD.
(2) DISTRAINT OF INTANGIBLE PROPERTIES (Sec 208)
Intangible props w/c can be distraint:
- stocks and other securities
- debts and other credits
- bank accounts
How distraint is made:
Stocks and other securities:
: shall be distrained by serving a copy of the
warrant of
distraint upont the tp and upon the
president, manager,
treasurer, or other responsible
officer of the corporation,
company or association, w/c
issued the said stocks or
securities.
Debs and other credits:
: shall be distrained by leaving with the person
owing the
debts or having in his possession or
under his control such
credits, or his agent, a copy of
the warrant of distraint.

(2) Intending to leave the Phils;

Bank accounts:
: shall be garnished by serving a warrant of
garnishment
upon the tp and upon the president,
manager, treasurer, or
other responsible officer of the
bank.

(3) Intending to remove his properties in the Phils;

(3) ACTUAL DISTRAINT (Secs 207 a and 209)

(4) Intending to hide/conceal his property;

(5) Intending to perform any act tending to
obstruct proceedings for collecting tax due/
w/c may be due to him.
: subject of distraint = PERSONAL PROPERTY OF TP
this is effected by:
(1) Requiring the TP or any person having
possession or control of such property to sign
a receipt covering the property distrained; and
(2) Obligate himself to preserve the same intact
and unaltered and not to dispose of the same

: means that the personal property of the tp is

PHYSICALLY taken by the distraining officer.
: w/in 10days from receipt of warrant, a report on
the
distraint shall be submitted by the distraining officer
to the
Revenue District Officer and to the Revenue
Regional Director.
: prop distrained SOLD in PUBLIC AUCTION.
:209 provides that a notice shall be posted in not
less than 2 public places in the municipality or city where the
distraint is made, specifying the time and place of sale and
articles distrained. The time of sale shall not be less than
20 days after notice to the owner or possessor of the
property and
the publication or posting of such notice.

NOTES

TAXATION LAW REVIEW. Sababan. 2008 ed. Ppg 181-200

: w/in 2 days after the sale, the officer making the
same
shall make a report of his proceedings in writing to
the
Commr and shall himself preserve a copy of such
report as an official record (Sec 211)
prop

(1) The Register of Deeds of the province or city

where the prop is located; and
(2) Upon the delinquent TP, or if he is ABSENT
from the Phils, to his agent or the manager of
the business in respect to w/c the liability
arose, of if there be none, to the occupant of
the property in question.

: NO RIGHT OF REDEMPTION in sale of personal

distrained ABSOLUTE RULE

: OWNER has RIGHT OF PRE-EMPTION:

:Sec 210 provides, if at any time prior to
the
consummation of the sale all charges are paid to
the officer
conducting the sale, the good or effects
distrained shall be restored to the owner.
DURING AUCTION SALE, 2 instances w/c may
happen:
(1) There is a BIDDER but the bid is enough
(2) NO BIDDER/ there is a BIDDER but bid is
NOT enough.
: in (1), when the amount is insufficient to cover the
amount of the liability, Sec217 allows the govt to conduct
further distraint as necessary until the full maount due,
including all expenses, is collected. If theres an excess, such
shall be returned to TP.
: Sec 212 provides for the rule when the amount
bid for the property distraint is equal to the amount of the
tax or is very much less than the acgtual market value of the
articles offered for sale. the Commr/his deputy may
purchase the same in behalf of the Natl Govt for the amount
of the taxes, penalties and costs thereon.
:the govt shall purchaser the property
and thereafter SELL the same in AUCTION. if proceeds
are insufficient, NO FURTHER distraint may be conducted by
the govt.
Nota Bene: Sec 217 is applicable ONLY to the situation
where there is a BIDDER or there is a bidder and the BID is
NOT ENOUGH. In case of any excess, the same shall be
returned to the TP, but shall be remitted to the National
Treasury.
G. LEVY
this remedy is applicable to real property
: Sec 207 B : real property may be levied upon, before,
simultaneously or after the distraint of personal property
belonging to the delinquent TP.

How effected:
: by writing upon the certificate, a description of the
property upon w/c levy is made
: at the same time, WRITTEN NOTICE of the levy
shall be MAILED to/ SERVED UPON:

: Sec 213 provides: that any time before the day fixed for the
sale, the TP may discontinue all proceedings by paying the
taxes, penalties and interest. RIGHT OF PRE-EMPTION
afforded to TP.
Q: by way of comparison, in the case of levy, is there
also NO RIGHT OF REDEMPTION as in the case of
distraint?
A: unlike in cases of distraint, in cases of levy of real prop,
the TP is afforded, NOT ONLY w/ the RIGHT OF PREEMPTION but also the RIGHT OF REDEMPTION as
provided in sec 214, w/c provides:
: that w/in 1 year from the date of sale,
the DQ TP, or any one for him, shall have the RIGHT OF
PAYING to the RDO the amount of public taxes, penalties,
and
interest thereon from the date of delinquency to the
date of sale xxx, and such payment shall entitle the person
paying to the delivery of the certificate issued to the
purchaser and
a certificate from the said RDO that he
has REDEEMED the property.
: Sec 216: in case the real prop is levied by the
govt, it shall
be SOLD IN PUBLIC AUCTION.
it is required however, that the Commr
shall
give not less than 20days notice before
the sale
and dispotsition of the real prop in public
auction.
The real prop levied may also be sold in
a
PRIVATE SALE but this sale is subject to
the
PRIOR APPROVAL of the Sec of
Finance.
RESULTS if PROP SOLD in PUBLIC AUCTION:
(1) There is a bidder and the bid is enough; or
(2) NO BIDDER/ there is a bidder but bid is NOT
enough.
:Sec 215: governs the situation where there is NO
bidder.

in case where there is no bidder for real prop

levied and
sold at public auction or if the highest bid
is for an amount insufficient to pay the tax due,
the Internal Revenue Officer conducting the sale
shall
declare the prop forfeited to the Govt in satisfaction
of the
claim in question and w/in 2 days thereafter, shall
make a return of his proceedings
RD is also mandated by the Code to transfer the
title of prop forfeited to the govt w/o the necessity of an order
from a competent court. the tp is given 1 year from the
NOTES

TAXATION LAW REVIEW. Sababan. 2008 ed. Ppg 181-200

date of forfeiture to REDEEM the property. If there is NO
REDEMPTION MADE, forfeiture BECOMES ABSOLUTE!
No further levy is allowed by the code in this case.
In case of (1) above: the rules on distraint of real prop shall
be applicable. If theres still deficiency after the proceeds are
applied to
the tax liability, there SHALL BE FURTHER LEVY on the real
props of the tp.
In case of (2) above, the property is FORFEITED by the govt.
(in contrast, in cases of distraint, the prop shall be
PURCHASED by the govt)
Q:What is the implication of this difference?
A: in case the prop is forfeited, the TITLE TO THE PROP IS
AUTOMATICALLY TRANSFERRED TO THE GOVT AFTER
REGISTRATION OF SUCH FORFEITURE WITH THE RD;
While in cases of distraint, where the prop is PURCHASED
by the govt, the TITLE TO THE PROP IS NOT
AUTOMATICALLY REGISTERED IN THE NAME OF THE
GOVT.
H. INJUNCTION (Sec 218)
: refers to a PROHIBITORY INJUNCTION the purpose is to
restrain the collection of any National Internal Revenue tax,
fee, or charge.
:218 prohibits any court to have any authority to
grant an injunction for the purpose abovementioned.
: the prohibition shall be applied to taxes other
than those mentioned in the NIRC.
CTA given authority to issue writs of injunction.
RAs 1125 and 9282, the CTA is allowed to isse
writs of injunctions provided the contested tax is the NIRC.
I. TAX LIEN (Sec 219)
in cases where the TP neglects / refuses to pay
an internal revenue tax, the amount due shall constitute as a
lien in favor of the govt from the time the assessment was
made until payment thereof is made.
proviso : the lien constituted shall NOT BE
VALID any mortgagee, purchaser or judgment creditor until
the notice of such lien is filed by the Commr to the Office of
the RD of the province / city where the prop of the tp is
situated or located. before such lien can affect the rights
of the mortgagee or purchases of such property, the lien shall
FIRST be registered with the Office of the Reigster of Deeds.
Q: Suppose the govt levied a parcel of land w/c is being
foreclosed by the mortgagee. Which of the two shall be
preferred?

A: IT DEPENDS. Before the right of a mortgagee is affected,

the lien created must FIRST be registered with the Office of
the Register of
Deeds in this case, the govt shall be preferred; otherwise, it
is the mortgagee who will prevail over the government.
J. APPROVAL OF THE COMMISSIONER (Sec 220)
BEFORE an action, civil or criminal, may be
filed in court, the Commissioner must FIRST APPROVE such
filing of the action.
: the action or proceeding must be instituted the
name of the Govt of the Philippines.
Sec 220 + Sec 7 sec7 provides that the Commr
may delegate the powers vested in him under the Code to
any or such subordinate official with the rank equivalent to a
division chief or higher.
POWERS of the COMMR w/c be DELEGATED (RICA):
(1) The power to RECOMMEND the promulgation
of rules and regulation by the Sec of Finance
(2) The power to ISSUE rulings of first impression
or to reverse, revoke or modify any existing
ruling of the Bureau;
(3) The power to COMPROMISE or ABTE sec
204 A and B of the Code, any tax liability; and
(4) The power to ASSIGN or REASSIGN internal
revenue officers to establishments where
articles subject to excise tax are produced or
kept.
Sec 4 adds: the Commr has the exclusive and
original jurisdiction to interpret the provisions of the NIRC,
subject to review by the Sec of Finance.
: said sec, the Commr has the power to DECIDE
disputed assessment, refunds of internal revenue taxes, fees
or charges, penalties imposed in relation thereto, or other
matters arising the NIRC or other laws or portions thereof
administered by the BIR. this decision is subject to the
exclusive appellate jurisdiction of the CTA.
K. SUSPENSION OF THE RUNNING OF STATUTE OF
LIMITATIONS (Sec 223)
: the periods 203 and 222 shall be SUSPENDED
for the following reasons:
(1) When the TP REQUESTS for a
REINVESTIGATION w/c is GRANTED by the
Commr.
(2) When the TP be LOCATED in the address
given by him in the return filed upon w/c a tax
NOTES

TAXATION LAW REVIEW. Sababan. 2008 ed. Ppg 181-200

is being assessed or collected, PROVIDED
that if the TP informs the Commr of any
change in address, the running of the statute
of limitations will NOT BE SUSPENDED.
(3) When the warrant or distraint or levy is DULY
SERVED upon the TP, his authorized rep or a
mem of his household with sufficient
discretion, and no prop could be located; and
(4) When the tp is OUT of the country.
Q: after 15 years, A, a Filipino tp, went back to the Phils.
The BIR assessed him the normal assessment. Has the
action prescribed?
A: NO. the running of the prescriptive period shall be
suspended when he is out of the country. the tp, for 15
years was out of the country, suspension is AUTOMATIC in
this case. The action has not yet prescribed.
L. CLAIM FOR REFUND (Sec 229)
claim or refund shall first be filed before the
Commr BEFORE a suit or proceeding shall be maintained in
any court for the recovery of any national internal revenue tax
alleged to have been erroneously or illegally assessed or
collected, or of any penalty claimed to have been collected
w/o authority, or of any sum alleged to have been
excessively, or in any manner wrongfully, collected.
: the suit/proceeding shall be filed after the
expiration of 2 years from the payment of the tax. However,
the Code further provides that the Commr may, although
there is no written claim for refund or credit filed by the tp,
refund or credit any tax, if upon the face of the return upon
w/c payment was made, such payment appears clearly to
have been erroneously made.
HOW TO DETERMINE PERIOD IN COMPUTING TAX
REFUND:
TP classified into INDIVIDUAL and CORPORATIONS.
INDIVIDUAL: reckoning period should be on the
day the tax has been paid.
if paying the withholding tax system: the
period shall start at the end of the taxable year.
if paying by way of installment: the period shall
be reckoned on the date of the last instalment.
for tps subjected to distraint/levy: if prop was
sold in public auction, the date the proceeds were applied for
the satisfaction of the tax liability shall be considered.

CORPORATE TPS 2 groups are also

considered: the EXISTING and NON-EXISTING CORPOS.
EXISTING
NON-EXISTING
2-yr period starts to run from the 2-yr period commences from the
day the annual adjusted return is day the annual return is filed. For
filed since it is only from this these types of corpos, upon
time that the tax liability can be receipt of the notice from SEC of
correctly determined.
the dissolution of the corpo, a
return should be filed after 30
days. The dissolved corpo is not
required to wait for the end of
the taxable year to file the return.

2-YEAR PERIOD IS ABSOLUTE.

: even if theres a supervening event w/c could
prevent the
tp from filing a written claim for
refund/credit, the claim
should still be filed w/in the 2year period.
BUT if the Commr has not yet acted on the claim
and the 2yr period is abpout to expire, tps remedy = file
appeal with CTA sitting in DIVISION. The inaction of the
Commr can be considered a DENIAL.
: if BIR denies the claim w/in the 2yr period, tps
remedy =
file appeal with CTA w/in 30days from the
denial. NOTE
that such 30-day period MUST BE
WITHIN THE 2-YEAR
PERIOD.
if there are only 21 days remaining in the 2-year
period and the BIR denied the claim, tp has only 21 days
w/in w/c to file his appeal.
EXCEPTION Sec 204 C: a return filed showing an
OVERPAYMENT shall be considered as a written claim for
refund. in that case, no written claim for refund or credit is
required to be filed.
:In cases of written claim for refund or credit in
determining
the gross value of the estate, the Commr
may open the
bank account of the tp. written consent
is NOT REQUIRED. But in cases of compromise 204 A,
written consent is required for the Commr to inquire into
the bank account of the tp.

NOTES