Boe the authority jaws, subject 1° aurea ture the review by ' thholding agents with reg 4 general, ‘are constituted withl —* ror oe papemcnita to otter temrey—r™ of NIRC,the BIR shall be headed by the Pleeicsioner end wo be anciated by 4 deputy comm’ sioners. provisions of the Tax Code, to be able nder its office is granted by law to the © 7.. The power to interpret the to decide on tax cases w ci BIR Commissioner. 4~< «\¢ * t' hh Fs internal revenue taxes are self-assessing; hence govt tax “assessment is -not-necessary to demand settlement of @ taxpayer's tax liability. i a gorts is fe Bs (9. financial position of the bility to pay the assessed tay.Peete ee > ssment without completing tax audit which ¢ collection of taxes due to taxpayer's n leopardy assessment - Deficiency assessment c, Disputed assessment d. Void assessment 3. The tax return not subjected to tax investigation can be amended within /a. Three (3) years from the date the tax return was filed. b. Three (3) years from the date the erroris discovered. ¢. Three (3) years from the date the BIR granted the changing of the tax return. d. Five (5) years from the date the tax return was filed. 4, Alletter that is being send by the BIR to the taxpayer with noted tax discrepancy inviting him for unofficial meeting to determine the endorsement of the tax case tothe Assessment Division for appropriate review a. Preliminary sment notice +b. Notice of informal conference €. Assessment notice d. Demand letter & A taxpayer's request to the BIR to consider as evidence the newly discovered or additional evidence is called motion for ae @. teconsideration—, oid eudore b. cancellation. withdrawal. reinvestigation. ich of the following is not an administrative remedy available to : ranger Coy ag5 years. 10 years. e of the tax is sub 10. In installment tax payments, the unpaid balance of the ta: toa surcharge of a. 0%. b. 10%, c. 20%, d. 25%. 11. Statement 1: It is within the general power of the ( interpret tax law to be able to x liability Statement 2: The interpretation of the ode issued Pulings shall prevail over the decision of the Cou Bee? tax laws is within the general powers of the c. 7 a. Only statement 1 is correct, b. Only statement 2 is correct €. Both statements are correct. _ d. Both statements are not correct“case B: ore Date of tax return filed April 15, 2011 Date of tax return amended October 20,2012 re Question: When is the deadline to assess tax return?|Gct- 20 2977 3 btw Atte en the “3 sy yee orn eal anendet Date of fraudulent tax return filed April 15, 2011 Date when tax fraud was discovered by BIR April 15, 2015 Question: When is the deadline to file a proceeding in court for tax collection? ‘ = vey Os Gra not filedio. April 15, 2011 Date when the omissiorwas discovered by BIR April 15, 2012 Question: When is the deadline to assess tax return? Case E: Bort (f Date of tax erfone said April 15, 2011 laim for refund was filed with BIR May 20, 2013 made Question: When is the last day to appeal to the CTA? woh ¢ [ ( ri y paid June 10, 2011 e of claim for refund was filed with BIR March 3, 2013 April 5, 2013 hen is the last day to appeal to DP days oHer dena!July 12, 2011 2 real to the CTA? ten Demure 100 tar °° ‘Question: When is the last day Sebmewon of Ce $0 de ote _ oi January 5, 2011 nt receiv : Petition for reconsideration filed with BIR peta 1, pa y Documents to support petition submitted el Bae 3 Decision of BIR denying the petition March 22, 2011 March 30, 2011 reconsideration filed with BIR April 12, 2011 nd request denied is the last day to appeal to the CTA? April 21, 2011 f adverse decision of the CTA June 2011 Date the CTA adverse decision received Jun 2011 Question: When is the last day to appeal to the Supreme Court? ‘Case L: ee to the CTA i adverse decision of the C une 10, 2011 s e CTA Date the CTA adverse decision received June 20,2088 * June 25, 2011 Question: When is th : . = aoe ory to appeal to the Supreme C Aehner received again three ‘against Mr. Garcia for obtaining resulting to an estimated tax 4 P50 million. Say ee “If Mr. ia’ frSpoged for a compromise to the BIR Commissioner, a is the minimum compromise that is allowed to Garcia? “a. P20 million b. P10 million 6) how c. P 5S million P-O0- Problem 2-10 Minimum Compromise Fo. declared bankruptcy with the following financial conditions: P 100,000 Cash Noncash assets 1,000,000 Bank loans payable 600,000 Trade creditors payable 800,000 Income tax payable 1,000,000 Accumulated 1,300,000 F Co. was able to The noncash a ere liquidate ssuming that income negotiate compris to financial in tax payable of F Co been due minimum amount of a. P550,000 b. P400,000 Problem 2-11 Property Purchased by the Government BIR decided to purch sonal property under distraint in The information available in deciding Of the said personal property is as follow of the property liabilityfe.) P400,000 \a p450,000 e tO Satisfy wid to the BIR : oe he second year assuming o thy applied as tax crediaam (_4f the correct amount of required Bort a that previous bonds pai c, 450, a. P150,000 4, P600,000 “+= <5. 300,000 1 amount t 2. How much is the net actual amon ‘robiem 2.19 Informer Fo provided an information to the BIR fending to a dieeovery Ota tax fraud amounting to P9,000,000. How leading to a discovery of a ta much is the amount of net cash rewards that can be received by X from the government? @. P1,000,000 c¢, P 810,000 b. P 900,000 d,,P- 0 Problem 2-14 Levy of Real Property After’ proper proceedings, the real property of X was levied by the Pere Tha ee Satisfy his tax liability which has been delinquent for # Pea conte Teal property is a boarding house with an ave come of £20,000 per month. X received the total amount of assessment ag follows: Basic income tax unpaid Surcharge (P1,000,000 x 50%) P1,000;0m Interest (P1,000,000 x 20% x 5 years) 300 oa —1.000,000 2,500,000” n for P4,000,000 on January 15, ental at the related capitan pits £20,000. It was stipulated fi byX. fro 614 documentary ail“2, IX decided to redeem the real much is the redemption price? “ ‘a. P7,700,000 |. P3,700,000 b. P4,600,000 3. How much is the excess income of the real proper se from the time of auction sale to the time of eqewel £0" erate. . ped has been sold ¢ a P'90,000 to the highest bidder. Problem 2-15 Constructive Distraint % Z 7 A taxpayer's property was placed under a constructive distraint The property was originally acquired for P400,000 and at the oe at constructive distraint, it has accumulated depreciation of P200, . ; the taxpayer sold the said property for P250,000 without the consent of the BIR Commissioner, how much is the minimum statutory fine that the BIR can impose against him? a. P800,000 ©.) P500,000 b. P600,000 *, ad. P250,000 Problem 2-16 Refund on Distraint of Personal Property The car of Mr. Poe, a delinquent taxpayer, was subjected to a destraint His total tax liability per assessment as of April 15, 200x was. P300,000. The car was sold P350,000 through a public auction on July 15, 200x with the following expenses incurred by the BIR: 1,500 Documentary stamp tax 1,000 Advertisement How much is the amount to be refunded by the BIR to Mr. Poe as of July 15, 200x? a. P50,000 P3! b. P47,500 a OS = 300 — Problem 2-17 Amount Still Payable After Distraint The investment in stock of Mr. Ligot, a delinquent taxpayer, was Subjected to a distraint. His total tax liability per assessment as of April 15, 200x was P275,000. The property was sold through the stock Market on July 15, 200x with the following expenses incurred by the 2,500 2,500 P1,500 1,125 1,000 the amount still to be paid by Mr. Ligot to the BIR as of P13,750. Nt - (27¢e @ P9125 x wt i 4 4Zo% x c ~~ P10,000 pertaining — to 5 tax due amounting rane q (certain taxpayer has a basic tax due NEON) S508 to venue ly on JU — mount due by the taxpayer to his 200A ITR but was filed on! District Office. How much would es the total ; inclusive of surcharge and interest f a. P12,500 b. P15,000 z ieor Problem 2-21 Additions to Tax with BIR Notification a i ditiote is income tax return for the calendar year 200B. He was notified by the The taxpayer did not file hi 200A which was due for filing F 1 BIR about his failure to file t ich reason he filed his tax return and paid the tax only after the said notice on June 30, 200€; The tax due per-return is PTO0;000. How—mu; amount due, exclusive of compromise pen a. P124,167 b. P150,000 as 2. Late Payment of Tax he taxpayer's income tax return for the calenda 2 ‘ Miseaeapril 15, 2008 but the taxpayer volun oon to eeInterest (P50,000 x 20% x 6/12) "Total amount due per assessment, May 15, 200A _ The total amount due per assessment is required to be paid on May 15, 200A, but the actual payment was made on June 30, 200A. The total payment inclusive of surcharge and interest would be gai y 9° = 2 a. P106,250 cP 94,500. Fou jog yl = aeae (b. P102,000 gon. fy FRO y B 42 tok. (ork Problem 2-25 Assessment of Unreported Income C paid P1,000,000 income tax related to his earnings for the year 200A. On July 15, 200B, the BIR conducted a tax audit and found out that C’s correct income tax liability should be P3,000,000. The tax diserepancy was due concealment of other earnings subject to normal tax C failed to protest on time the preliminary assessment notice. If you were the BIR assessor to issue sessment, how much would be the total 4 amount due to be assessed against C as of July 15, 200B excluding compromise penalty? a. P2,100,000 t P3, 100,000 b. P2,600,000 d. P3,875,000 Problem 2-26 Installment Tax Payment The income of a resident Filipino citizen amounts to P84,000, net of P3,000.creditable withholding tax and his income tax due per ITR at Year-end amounts to P8,000. If he opted for installment payment, the minimum tax payable for the first and 24 installments would be First Second >, installment _ installment Aon ae P3,000 P3,000 ¥ of ¥ f 2,500 P2,500. 4a due + Cut any ») P4,000 P1,000 ceddoht vf - 4000 , P1,000 P4,000. ax muah Jooo LAS sane blem 2-27 asinine: it Tax Payment ) financial neapacity, XYZ Corporation requested BIR d its income tax liability per ITR for Calendar year oO, os of 1,000,000, in four'(4) equal monthly ‘installments,, 2008, ; 415, 2008 and May 15; 200 due on April 15, 0-260 =7FO X The total amount due OF OFS 2008) ‘ 1/000;000 7762,500 & pr/000'000 ees « —P-'750,000 SN ae : Iment would be ent and 4t® final installment YOU 7 2. The 30 pe eee a igmaliment Eo 350,000 262,500 258,33 a pases P254,166 @ P250,000 250,000 yo ent Procedure The RDO of Beguio Ciyiasued a tx assesament t Mr Lag fraudulent income tax amounting to P500,000. Mr. ig with 60 days and submitted proofs 10 days thereafter. Can the BIR deny the protest of Mr. Lang? What would be the remedy available to Mr. Lang? ‘(Problem 2:29" Tax Assessment S 2 BIR Examiner, you found the following material fir income tax discrepancies of ABC Company for the taxable y Taxable income Per 200A ITR 200A income tax paid per return on April 15, 2008 Discrepancies per investigation during 200¢. Indeclared rental income Nondeductible interest expenses londeductible bad debt expense ndocumented representation expenses =adocumented | assessed HOt ¢ Kok 4 OES 2p eek. the total amount due a. 1 SSesseq seed by ABC Company: eens a i ad ae 18 the total amount qd. x oN ate payment? aSt he i Bec ene : counts to BIR, she ignored the summon) | Required: a. Enumerate all the Tax Code violations committed by Miss. San Tago. b. If convicted for all these violations, how much is the total amount of penalties? Problem 2-32 Understatement of Income Tax Return On April 15, 201B, Orville Corporation filed its income tax return for the taxable year 201A declaring a total receipts of P2,000,000 and total deduction of P1,500,000. The income tax due declared amounts to P165,000. Upon filing to BIR, the tax officer discovered that Orville’ receipts are understated by and the deduction is overstated by 38% on which basis the correct amount of tax was paid on time, How mue ‘was the amount of surcharge added to Orville’s income tax due on April 15, 201B? Problem 2-33 Registration Fee Splash Corporation is a manufacturer of beauty products that maintains 9 warehouses and 30 branches in the Philippines. Its principal factory is located in Quezon City Required: Assuming that the taxable year is 200A, compute the following @. Total annual registration fee payment was made on January 31, b. Total amount paid to the BIR if 200B. of Splash Corporation for 200A if 200B. payment was made on July 30, Problem 2-34 Chattel Property Forfeited The government forfeited the chattel property of Mr, Balana due to criminal violation of tax laws. Mr. Balana’s total tax liability per ' t as of April 15, 200A was P100,000 payable on June 1, 200A, was sold for P200,000 through a public auction on 1, 200A with the following expenses incurred by the BIR:‘administrative protest (Criminal violation not filed in courts tax cases ‘Criminal violations filed in courts llowed using the e al eee ; Required: How much it ori): following reasons (independent assum! er te insolvency. Case 1: Financial incapability due to corporate Ar iting to Case 2: Financial incapability due to surplus oo impairment in original capital by at lee Case 3: Doubtful validity of assessment Problem 2-36 Comp! Miss Malou Lugui was assessed with t penalty, The financial status of Miss Lugu Payment was made is as follows: ive Tax Remedy Fehensive Te japility of P250,000 exclusive af i when the demand for Total properties: : Real property P200,000 Personal property 100,000 Total liabilities, exclusive of tax 150,000. Required: a If Miss Lugui offers for a compromise payment of P 100,000 for her tax liabilities on the ground of her financial Commissioner accepted the offer, would it be in acco pre-requisite for a compromise settlement? Assuming that a distraint of the above p: