TAX REMEDIES WITH FLOW CHART

PROJECT IN

TAXATION LAW 2

SUBMITTED BY;

ROMEO WRIGHT MEGU

STUDENT

SUBMITTED TO;

ATTY. JO ELLAINE L. COLLADO

PROFESSOR

APRIL 14, 2012

 TAX REMEDIES WITH FLOW CHART

The Code provides the Government with two Remedies

1. Assessment

2. Collection

Two Kinds of assessment and Collection

1. Normal or ordinary

2. Abnormal or Extraordinary

Normal or Ordinary Assessment and Collection is available to the Government:

1. If the returned filed by the taxpayer is not false or fraudulent

2. Gov’t may make Assessment within 3 years after the last day prescribed by law from the
filing of the return not from the time of payment
3. When the return is filed beyond the period of filing prescribed by law, the 3 year period
shall be counted from the day of the filing of the return

Abnormal or Extra-ordinary Assessment and Collection is available to the Government:

1. If the taxpayers omits or fails to file his return

2. If the taxpayer filed the return but the return was fraudulent
3. If the return filed by the taxpayer was false

Two Remedies Under this kind of Assessment and Collection:

1. Assess and collect

- prescriptive period is 10 years from the discovery of the non-filing of the return or
the fraudulent or false return
- period of collection prescribes after 5 years from the date of final assessment

2. Collect without assessment

- there would be no prescriptive period for the assessment
- period for collection prescribes within 10 years from the discovery of non-filing of
the return or the fraudulent or false return

Procedure for Assessment

1. Pre-assessment Notice

2. Final Assessment Notice

PROCEDURE FOR ASSESSMENT:

Within 15 days from receipt of notice

File a Reply

Failed to File a Reply Filed a Reply

Send Notice Again Preliminary Assessment Notice

(PAN)

15 days upon receipt of PAN

File a Reply

Failed to File a Reply

Repeat PAN DECLARE IN DEFAULT,

SEND FORMAL LETTER OF
DEMAND & NOTICE TO PAY TAX

Within 30 days from receipt of FAN

File a Protest

SUBMIT COMPLETE SET

OF DOCUMENTS

BIR IS GIVEN 100 DAYS

TO DECIDE

PROTEST IS DENIED
or
within 30 days from denial/lapse

APPEAL TO COURT OF
TAX APPEALS

Within 15 days from receipt

MOTION FOR
RECONSIDERATION
Within 15 days from receipt
APPEAL TO THE COURT
OF TAX APPEALS
EN BANC

Within 15 days from receipt

APPEAL TO THE
SUPREME COURT
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.

When is PAN is not necessary:

1. When the finding for the 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 tax payer opted to claim a refund or tax credit 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

B. Final Assessment Notice (FAN) - as a rule FAN is issued when:

1. A taxpayer having received a PAN fails to respond within the period provided for by the
rules and regulations
2. The 5 instances enumerated where the pre- assessment is not necessary

C. Protest- is a remedy afforded to the taxpayer in cases where the BIR issues a final
assessment to the taxpayer

Three (3) Forms of Protest:

1. Local Tax
2. Real Property Tax
3. Tariff and Customs Code

1. Local Tax

Local Government Code 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 a taxpayer may file a protest within 60 days from receipt
of notice of assessment. If taxpayer does not file the protest within said period, the
assessment shall become final and executor.

Local treasurer shall decide the protest within 60 days from filing. He may either grant
or deny the protest.

GRANT - if he finds it wholly or partly meritorious

He shall issue a notice CANCELLING wholly or partly the assessment

DENY- wholly or partly if he finds that the assessment is wholly or partly CORRECT with
NOTICE to the taxpayer.

The taxpayer is given a period of 30 days from receipt of denial or the lapse of 60-day
period within w/c to appeal to the court of competent jurisdiction – RTC.

RTC – renders unfavorable decision, Taxpayer may appeal to CTA EN BANC

If still unfavorable, Taxpayer may appeal to SC
 LOCAL TAX:
Tax Payer

File a Protest

within 60 days from receipt of notice of assessment

Failure to file

– Assessment- becomes Final & Executory

Local Treasurer

may decide to

GRANT DENY

if correct
If meritorious
- Cancel Assessment Notice w/ notice to the TP

30 days from receipt of denial or lapse

of 60 -day period

Appeal to RTC

CTA EN BANC

SC

1. Real Property Tax – made by a Tax Payer (TP) who is not satisfied with the action of
provincial or city assessor in the assessment of his property.
- A TP may within 60 days after from date of receipt of the written notice of assessment ,
appeal to the Local Board of Assessment Appeals (LBAA) of the province or city.
- Before this protest may be entertained, LGC requires TP first pay the tax (Payment under
protest)
- Protest may only be filed within 30 days from the payment of the tax (with annotation on
the receipt payment Under Protest)
- LBAA shall decide within 120 days from receipt of the appeal. The Board after hearing, shall
render a decision based on substantial evidence.
- LBAA renders unfavorable decision, TP may appeal to Central Board of Assessment Appeals
(CBAA).
- If still unfavorable, to CTA, then to SC

Tax Payer

File a Protest

Within 60 days from date of receipt of written notice of

assessment
 Tax Payer

 pay tax (Payment under protest)

LBAA
(within 120 days)

If unfavorable

CBBA

CTA

SC

2. The Tariff and Custom Code- this includes those request for protest as well as for
forfeitures
First Situation:
If importer loses his case

-Appeal within 15 days – Office of the Commissioner

-Importer may file appeal to the CTA sitting in Division within 30 days from receipt
of the decision
-Importer to file Motion for Reconsideration (MR)before the same division within
15 days, if still unfavorable,
-appeal before the CTA EN BANC
-if still unfavorable, importer may appeal within 15 days to SC

First Situation

Importer

Within 15 days appeal

Commissioner

CTA Division
– within 30 days from receipt of decision

If still unfavorable
MR

-within 15 days If still unfavorable

CTA En Banc
Within 15 days if still unfavorable
SC
Second Situation- Importer prevails over the Government

- There will be an automatic review within 5 days

Automatic Review shall be filed before:
1. Sec of Finance if value of commodity is 5M or more
2. Office of the Commissioner if value is less than 5M
 The Commissioner is given a period of 30 days within which to decide.
 If Commissioner REVERSES the ruling, he rules for the Gov’t, this decision
becomes final and executor.
 If Commissioner AFFIRMS, the collector does not render a decision within
30 day period, then Automatic Review before the Secretary of Finance.
 From the Automatic Review, the decision of the Secretary- if unfavorable to
importer, TP shall be appeal to CTA

Automatic
Review

To be filed to the Office of the Commissioner

30 days to decide

REVERSES AFFIRMS

Final and Executory Automatic Review

–Sec .of Finance

If unfavorable

CTA