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    30 views9 pages

    TX 1601 1602 PDF

    Uploaded by

    j

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
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    of 9
    TAXATION ReSA The Review School of Accountancy a @Tel. No. 735-9807 & 734-3989 TAMAYO/LIM/CAIGA/MANUEL OF THE COMMISSIONER OF INTERN/ UI Conmaissioner ‘8. Compromise | settlement any tax. ‘by Gases which may be ‘be compromised a. Offer to compromise a delinquent account oF disputed assessment ‘onthe ground of reasonable doubt a5 to the validity of the assessment ‘Compromise Settlement of Any Internal Revenue Tax. = | Service, Enforcement Service and other offices in the National Office; Cages winkch may nat [ 1) Wiihotng Tor ake, unless The applcantlaxpayer ivokes provisions of Tow that east doubt on the | represertatwe; “The Commissioner may ] (A) Compromse the payment of any intemal revenue tax, when: t (1) A reasonable doubt as fo the valcty ofthe clam agamnst the taxpayer exists; oF (2) The fnancal postion of the taxpayer demonstrates a clear inability to pay the assessed tax. : (8) Abate or cancel a tax laity, when: (1) The tax or any portion thereof appears tobe unjustly ar excessively assessed OF (@) The administration and coletion cast involved do not justify the collection of the amount du. (©) credit oF refun! (1) taxes erroneously or ilegally ceceived or (2) penaties mposed without authorty, {G) refund te vale of internal revenue stamps when: (2) they are returned in good condition by the purchaser, a, {hb} intis discretion, cedeem or change unused stamps that have been rendered unfit for use and refund | -upan proat of d wl “The Commissioner may compromise the payment of any internal revenue tax, when: (1) A reasonable doubt ast the vahdty ofthe caim against the taxpayer exists oF | {2} Tre nancial postion ofthe taxpayer demonstrates a clear inabilty to pay the assessed tax i “The compromise settlement of any tax laity shall be subject tothe folownng minum amounts: (a). For cases of fanelal ncapacty, @ minimum compromise rate equivalent to ten percent (108%) ofthe Basic | assessed tax; and (2) For other cases, a mieymum compromise rate equivalent to forty percent (4026) ofthe basic assessed tx. ‘The compromise shail be subject to the approval of the Evaluation Board which shall be composed of the | Commissioner and the fou (4) Deputy Commissioner (1) Where the basic tax involved exceeds One milion pesos (P1,000.000) or | 2). where the setiement offered i less than the presenbed minimum cates, Commissioner and the four (4) | Deputy Comeissioners. T) Delinquent accounts except those with duly epproved schedule of installment payments; Pe 1 stil pending inthe Regiria! OrTices, Revenue Distct Offices, Legal Service, Large Taxpayer Service, Collection 3) Gal tax cases beng disputed betore the cours; 4) Coiecion cases fed before the courts; '5) Grima! volatons, other than those aeady filed n court or those involving criminal tax fraud taxpayer's obigation to withhold; 2). Estate tax cases ubvere compromise is requested onthe ground of financial incapacty of the taxpayer; 3) Delinquent accounts wrth duly proved schedule of istallment payments; 3) Criminal tax fraud cases confemed a5 such by the Commissioner of Intemal Revenue or fis duly authorized '5) Criminal votabons atteady fies in court; 6). Cases where final reports of reinvesigation or reconsideration have been issued resulting to reduction in the fonigina assessment and the taxpayer Is agreeable to surh decision by signing the required agreement form for the purpose; 7) Cases whieh become final and executor after final judgment of a court, where compromise is requested on the ‘ground of Goubifl validity of the assessment; “The offer to compromise a delinquent account oF disputed assessment on the ground of reasonable doubt as to Fe Srl cent ay bu ace won shown a aaa dees satan oe ease ena nyse Sonn tery a mst, pe oe tsa pms aa 00 oa earn 1098, ture dad nace opal tc | Wontar cede tae j een retin aot Crk Oana Rl“ teen tf a sae {en be dopted by scent ans cometet edenc ; | Fears et ane fe mean pad ("sess ex exer by te tsps | on sole Unio ne vlc or uonicy whieh Dng sono | ca cr tencn sere a enerceo prove int tare o | eae ee vias cat of conpertjedcton mate on av se | rea ek rahe aren Cot 8 teed wh Ey | Fee a umnsiaee pet O aca o he sage or to recéve ets o | Oe a atari escent acne odor Das et | —-PX-1601 ReSA: The Review School of Accountancy Page 2 of 3 3) The Taper fal o fig 3 Fogo! fer tainvestijaion oF reconsideration within 30 days from recent oF fal | 1° assessment netie an fare 1s rao 9 Beeve thatthe assessments lacing in fega and/or factual bas or 19) The taxpayer filed to esata to the Court of Tax Annals (CTA) an adverse decsion ofthe Commssioner of | Intemat Revenue, offs suly authorized representative, in some cases, within 30 days from recent of such | rdverse decision and there i regs to believe that the assessment lacking in legal andfor factual bass. jum | I) 40% of the base assessed ia ©. Prescribed mini Percentage of (2) Taxpayer may requst ing a eampromise rte wer than 4OW subject orion approval by the Natonat | Compromise in case | Evalution Boor: St dsubetulvalisity[3) The campronicesotomen! ofthe itera revenue tox labites of taxpayers reckoned on ape tax type sessment 5958. Financial incapacity [Minimum percentage of | ___sempromise _.___Basis for ise pa 10% [eR a a ie Spot we ‘monly Salary i 10,500 oF Tess, W singh | 121.000 or les, eraied, and has i evbleastranabe assets other than famiy home; | 2 indi wathout any sae OF oeOMe | 3) Taxpayer wath seo net wath: | | 4) Taxpayer with negative net worth; | | 5) Areooy nor-aperaung compares fr setienent Dissolved corporations; | 2) Alreacy non-operating comcanies for a veriod of fess than 3 years; 3} Dextre otent brkevet unas he taxpayer fl under any of te cases subject to a ferent percentage “Toque Suerng Tem Sips of eamngs Beck resulting to mpakrmet in te nina cpa bya least 50% ele inimam percentage | The above: pescibad milan perenlage hal We eneak oF aesesomenis Sreompromise aise’ | consstin solely of moremrts, re, surcharges, rest te. based onthe total amount assessed ‘pplies to assessment ‘consisting solely of increments pend of 3 years or mare as of date of application for compromise cose jancial incapacity | "The Comnilssoner shall not carsider any offer for compromise sellement on the of compromise Under the following stuatons: settlement on the 1) Taxpayer wth Tax Cred, Cexifiate (TCC) issued. on hand, oF rans Ground of financial | 2) Taxpayer wil pendieg clan for tae vere or tax ed wk the BIR, Department of Finance One-Stop-Shop Preimncity shallnot be | Tor Cred and Drawback bsky Center (T2x Revenue Group or Investment incentive Group) andr the court; considered 2) Taxpayer with est Foal sateen or grospert of future agreement with any party that resulted ox | Toul result to an incense in he eauty of the taxpayer at the time of the offer for compromise or at & definite future tine | 4) Tampayer does nt wares 11 [S29 hus prulege ofthe secrecy of bank deposts. 19. Approval of offer to compromise [Majority of all members | Except for “aliers of compromee where the approval © delegated to the Regional Evaluation Board (REB), all | rea required See cs ernment wit ie hdc fhe Naboral Oe (NO) sel be approved bythe majorty of ee he Ratana Econ Beare (NEB) composed of We Conmssone™ ond tne fou (4) Deputy | | commssoners fi doco of We WEB, Gcuence ofthe Connanone shall have the | | - 2 ——— aes ‘fers of corapcomise of eescssment ssued by the Regional Office invaiving basic deficiency taxes of P500,000 | ee ceror munor crunal wotatons discovered by the Regional and District Offices, shal be subject | ‘or favorable to the taxpayer, og oa irra arson | Sess at cone ac omees oe | |e amr nose Members ~ glecun Owivon, Revenue Oi Offer Papen ee sapronise oHGrts be | The comprise fer st be pd bythe taxpayer upon og af be appear conoronise siemens promise oer wpe | opleaton or compro semen sat be processed wit the ull setlenen fhe offered amount ao re ee oproral of me apoicaton for comprome setemen, the enourt pat! upon ing of sich | dications kc rom he a oustanding tx Mies (RR No, 92013) | cornet eas as Wale of tonprmee sfes a he ecb nem peranlge of comprise Sea, TEE | Femara rmnimum | shall ays be subject o che ef 1% the NEB. , percentage of | ompromise settlement | 3. Cancellation or Abatement of Tax Liat «si cS ‘Gases of abatement or | The Corpmissoner may abate or cancel «tax abit, when: A ‘cancellation (i) The fax or any portenthereo! appears to De unustly or excessively assessed oF _G) The sinetraton and calacvon costs voted donot jst the colecion of he amount . Instances when 7) When the fling of the roturn/psyment is made at the wrang venue; o enalties ; filing of the retur/payment of his tax «5 due Lo erroneous written officist adviceof a revenue 1 2) When the | | jnterestimposed may officer; fatenestimponed may | Ore apoyer as ule # st" ar pay te taxon te due substantia sees om prolonged | | eheensaate,| Ge te tar ete ati mean ny | ee : “ay When the asec Broug! about o the ces of, the taxpayers an-érmpance wt he a due | 2 dificult nterpeetation of tie sad law; TAXATION: Authority of the Commissioner of Internal Revenue TX-1601 (Batch 37) ReSA: The Review School of Accountancy Page 3 of 3 losses from prolonged labor dispute, force majeure or legitimate business reverses (no. above) insta Grcumstances (a0. 6 above) ‘e instances where interest is not abated '5) When the taxpayer fs to fe the return and pay the correct tax on time due to crcumstances beyond We ontro, provides however, brat abatement shal cover only the Surcharge and the compromise penalty and not the interest; | 6) Late 90 the tax anor mentorious Grewnstances. 1) Labor strive for move than & moss, hich has caused the temporary shutdown of business; 2) Public tun, 3) Natural cotemity su ing, eart quake, storm, food and the like; | 4) Armed conticts such 2s var oF asurgercys '5) Substanta! losses sustained due to fire robber, theft, embezzlement; 16) Continuous heavy losses incurred by tne taxpayer forthe last two (2) years; 7) Liquidity problem of the taxpayer for te fast three (3) years, 8} Such other instances which the Comrassioner may deem analegous to the enumeration above 1) One day ite fing and rernttance due to failure to beat bank cutoff time (no longer allowed under 2012 dated! March 28, 2012); 2) Late fing of ctum de to unrescived issue on classification or valuation of real property (for capa gas cases, €c), 2) Late temitance of wthheicing tx ca compensation of expatiates for services rendered in the PRAPDES ‘ending He asuance by the SEC of Use teense to the Philippine branch office or substan, provided, HOWE, |) Bhat the atetemon stil enly onc the surcharge and tne compromise penalty and nat the interest; 4) Use of wrong tax form tut correct amount of tax was remitted: 5) Surcharge eroneniey posnds 2 Wrong se of ax cd Cerificate (TCC) where Tax Debit Memo (TDM) was not property | and for, 7) ofetting of taxes ofthe same knd, overpayment in one quarter or month & ost against underpayment ‘in anather quarter or mont, 8) Automate otsetew Gf overpayment of ane kind of withholding tax against the underpayment of another kn; 19) Bing an amended return under mevitorious cruinstances, provided, however, that abatement shal cover only the penates end not te mirest: g 10) Such other istonces wich ser inay deem analogous to the enumeration above. 1) When the Fexayer fais 1 fie a rd pay the tax on time due substantial losses from proionged labor disite, farce majeur: or legitimate busmess reverses; 2) Wen the tampayer foes Lo te the return and pay the correct tax on time due to circumstances beyond his control, | 3) Fling an amended return under meritorious circumstances; 4) Late remittance of wthnolding iax vn compensation of expatriates for services rendered in the Phitppines | _pending the essanoe by the icense to the Philippine branch office or subst 7. Tnstances when imposed on taxpayer may be abated or ‘cancelled on the ground that the administration and collection costs are ‘more than the amount ought to be collected Fy Assessment contre by lowe! court but appealed by the taxpayer to a higher Court 2). Assecamant reduced ater cenvestigaton Out taxpayer is sil Contesting reduced Assessment 3) vitolding tor assessment uncer mentonous crcymstances, 4) Delayed instalment payment under meionous creumstances: 5) Such ether instances wan the Corannssioner may deem analogous to the enumeration above Note: For cases 1 104 above, the abatement ofthe surcharge and the compromise penalty shall be alowed ‘oly upon written gapcaton by the taxpayer sigtfying hs willingness to pay the basic tax a interest oF | fase bn oni, hia exer & applicable unde he prevaing Groumstance, + | “Commissioner has sole authority to abate or

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