Chapter V TAX ADMINISTRATION AND ENFORCEMENT AGENCIES INVOLVED IN TAX ADMINISTRATION. Broadly speaking, the agencies of the Government which are involved in tax law enforcement or tax administration are the Bureau of Internal Revenue and the Bureau of Customs for internal revenue and customs law enforcement; and, the provincial, city and municipal assessors and treasurers for local and real property taxes. Fs Courts, on the other hand, are not exactly part of the administrative process but in the tax milieu they do play an important role since sound tax administration must move along the correct interpretation of tax laws. BUREAU OF INTERNAL REVENUE, Occupying the forefront of tax law enforcement is the Bureau of Internal Revenue (BIR), which is tasked with the collection of a substantial amount of revenue for the country and is under the supervision and control of the Department of Finance. ‘The BIR shall have a chief to be known as the Commissioner of Internal Revenue, hereinafter referred to as the Commissioner, and four assistant chiefs to be known as Deputy Commissioners (Sec. 3, 1997 NIRC). Bach of the Deputy Commissioners respectively heads the Information Systems Group, Operations Group, Legal and Inspection Group, and the Resource Management Group, while the Review and Evaluation Group is placed directly under the Office of the Commissioner. ‘The aforementioned five officials, together with thirteen Assistant Commissioners for the different services, namely, Policy and Planning Service; Enforcement Service; Large Taxpayers Service; Information Systems Operations Service; Information Planning and Quality Service; Information Systems Development Service; Taxpayers Assistance Service; Assessment Service; Collection Service; Legal Service; Inspection Service; Human Resource Development Service; and, Financial and Administrative Service, constitute the first/senior level of administrative authority. ‘The second/middle management level of administrative officers is ‘composed of Division Chiefs heading each of the various divisions falling under the major services, to wit: Planning, Management, Statistics, Corporate Communications, Tax Fraud, Policy Cases, Large-Taxpayers 170 ‘TAX ADMINISTRATION AND ENFORCEME IT Audit and Investigation (Regular Large-Taxpayers), Large-Taxpayers ‘Audit and Investigation (Excise Taxpayers), Large-Taxpayers Documentary Processing and Quality Assurance, Large-Taxpayers Assistance (Regular Large-Taxpayers), Large-Taxpayers Field Operations, Large-Taxpayers Collection and Enforcement, Luarge-Taxpayers Assistance (Excise Taxpayers), Large-Taxpayers Programs, Systems Operations, Systems Support, Security Management, Quality Assurance, Systems Standard and Technology Management, Systems Development, Systems Maintenance and Support, Taxpayer Information and Education, Taxpayer Service Program and Monitoring, Assessment Program, Audit Information and Tax Exemption, Asset Valuation, Withholding Tax, Revenue and ‘Accounting, Collection Enforcement, Appellate, Litigation, Prosecution, International Tax Affairs, Internal Security, Internal Audit, Personnel Inquiry, Personnel, Training Management, Training Delivery, Medical/Dental, Financial and Administrative, Budget, General Services, Accounting, Procurement, Accountable Forms, and Personnel Management Services. Itis worthy to note that the BIR is largely decentralized in that a great extent of tax enforcement duties are delegated to the Regional Directors and Revenue District Officers. At present, there are nineteen revenue regions all over the country, with each revenue region being headed by a Regional Director, and 115 revenue district offices (RDOs) each under a Revenue District Officer. Finally, comprising the “front- liners” of the BIR are the rank-and-file revenue enforcement officers (REOs), more commonly known as examiners, investigators and ‘agents; and of course, the numerous clerks and other support personnel. AGENTS AND DEPUTIES FOR COLLECTION OF NATIONAL INTERNAL REVENUE TAXES. Under Sec. 12 of the 1997 NIRC, the following are constituted as agents of the Commissioner: (@) The Commissioner of Customs and his subordinates with respect to the collection of national internal revenue taxes on imported goods; (b) The head of the appropriate government office and his subordinates with respect to the collection of energy tax; and (© Banks duly accredited by the Commissioner with respect to receipt of payments of internal revenue taxes authorized to be made through banks. Any officer or employee of an authorized agent bank assigned to receive internal revenue tax payments and to transmit tax returns or imLAW OF BASIC TAXATION IN THE PHILIPPINES documents to the BIR shall be subject to the same sanctions and penalties prescribed in Secs. 269 and 270 of the Tax Code. POWERS AND DUTIES OF THE BUREAU OF INTERNAL REVENUE. The powers and duties of the BIR comprehend the following: (a) Assessment and collection of all national internal revenue taxes, fees and charges; (b) Enforcement of all forfeitures, penalties and fines connected therewith; (©) Execution of judgment in all cases decided in its favor by the Court of Tax Appeals and the ordinary courts; and (@ Effecting and administering the supervisory and police powers conferred to it by the Tax Code or other laws (See. 2, 1997 NIRC). POWER AND DUTY OF THE COMMISSIONER TO INTERPRET TAX LAWS AND TO DECIDE TAX CASES. Sec. 4 of the 1997 NIRC provides: “The power to interpret the provisions of this Code and other tax laws shall be under the exclusive and original jurisdiction of the Commissioner, subject to review by the Secretary of Finance. “The power to decide disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties imposed. in relation thereto, or other matters arising under this Code or other laws or portions thereof administered by the Bureau of Internal Revenue is vested in the Commissioner, subject to the exclusive appellate jurisdiction of the Court of Tax Appeals.” Disputed assessment refers to a tax assessment that is administratively protested within thirty (80) days from the date the taxpayer received the assessment. It includes protested assessments wherein the administrative protest is denied in whole or in part, or is not acted upon by the BIR within one hundred eighty (180) days from the submission of all the required documentary evidence, and the taxpayer adversely affected by the decision or inaction appealed the same to the Court of Tax Appeals within thirty (80) days from receipt of the decision, or from the lapse of the 180-day period. Pending appeal, uch assessments shall continue to be considered as a disputed ‘nsnosment. 172 ‘TAX ADMINISTRATION Ann ee APPELLATE JURISDICTION OF THE COURT OF TAX APPEALS. The Court of Tax Appeals (CTA) shalll have exclusive “appellate jurisdiction over appeals made by taxpayers adversely affected by the decision or inaction of the Commissioner on administrative protests against assessments, claims for refund or tax credit of internal fevenue taxes, fees or other charges, penalties imposed in relation thereto, or other matters arising under the Tax Code or other laws or portions thereof administered by the BIR. In the case, however, of the decisions of the Commissioner on protests filed against assessments issued to departments, bureaus, offices, agencies and instrumentalities of the National Government, including government-owned or controlled corporations, the appeals, pursuant to Secs. 66, 67, 68, 69 and 70 of the Revised Administrative Code of 1987, shall be submitted to and settled or adjudicated by the Solicitor General or the Secretary of Justice, as the case may be. The decision of the Secretary of Justice as well as that of the Solicitor General, when approved by the Secretary of Justice, shall be final and binding upon the parties. Appeals may, however, be taken to the President when the amount involved exceeds one million pesos (P'1,000,000.00). The decision of the President shall be final. RULE OF “NO ESTOPPEL AGAINST THE GOVERNMENT.” It isa settled rule of law that in the performance of its governmental functions, the State cannot be estopped by the neglect of its agents and officers. Nowhere is this more true than in the field of taxation (Commissioner of Internal Revenue v. Abad, et al., L-19627, June 27, 1968; Commissioner of Internal Revenue v. Procter & Gamble Philippine Manufacturing Corp.,.G. R. No. 66838, Apr. 15, 1988) “Accordingly, the Supreme Court in the case of Commissioner of Internal Revenue v. Abad, et al., supra, ruled that where a BIR denaturation committee makes a favorable finding that alcohol has been suitably denatured and, therefore, is exempt from specific tax, said finding may be disregarded by a subsequent BIR inspection team if it appears that such aleohol was improperly denatured and, hence, subject to tax. Estoppel ddes not apply to preclude the subsequent findings on taxability. ‘The rule of estoppel cannot be invoked by a taxpayer in order to preclude collection of taxes that are rightfully due the Government as Jna case where BIR agents made unauthorized pronouncements on & taxpayer's tax liabilities. The Court ruled that even if said agents were so authorized, their recommendations are always subject to the