Income Not Subjected to VAT”, with no explanation to fully appraise the undersigned

of the facts and circumstances regarding the alleged deficiency.

“Sec. 2.58.5. Requirements for Deductibility. - An income payment which is
otherwise deductible under the Code shall be allowed as a deduction from the
payor's gross income only if it is shown that the income tax required to be withheld
has been paid to the Bureau in accordance with Secs. 57 and 58 of the Code.

A deduction will also be allowed in the following cases where no withholding

of tax as made:

(B) The recipient/payee failed to report the income on the due date thereof,
but the withholding agent/taxpayer pays the tax, including the interest incident to the
failure to withhold the tax and surcharges if applicable, at the time of
audit/investigation or reinvestigation/reconsideration.”

3.1 Mode of procedure in the issuance of a deficiency tax assessment:

3.1.1 Preliminary Assessment Notice (PAN). — If after review and evaluation by the
Commissioner or his duly authorized
VALUE ADDED TAX

Other income not subjected to VAT, P480,000.00

The aforementioned Value Added Tax out of the line in the Preliminary
Assessment Pan as merely “Other Income Not Subjected to VAT - P480,000.00, is
in contravention of Section 228 of the National Internal Revenue Code quoted as
follows:

“SEC. 228. Protesting of Assessment. x x x

x x xThe taxpayers shall be informed in writing of the law and the facts on which the
assessment is made; otherwise, the assessment shall be void.”

It is clear in the foregoing that the assessment is without legal nor factual

<Your name>
<Address>
<Address>

<Date>

<Debtor’s name>
<Title>
<Address>
<Address>

Dear <Debtor’s name>

Letter of demand – outstanding payment

I am writing in reference to <details of contract or agreement> and payment not

being received.
I enclose <specify the titles of the documents you are attaching, such as invoice
number and an original quote> dated <insert date> for the outstanding amount of
$ <amount>.
I demand full payment of the outstanding amount within <usually 14 days from the
date of this letter – best to specify the date>.
<Optional> Alternatively, and without prejudice to my rights for full recovery of the
debt, I am prepared to:
<Choose the option which is most appropriate>
 Accept the amount of $ <less than full payment> as full and final settlement of the
debt if paid within 7 days <or other appropriate period> from the date of this
letter.
<OR>
 Accept instalments of $<amount> per <week/month> until the debt is fully paid,
the first instalment to be paid on <date> and thereafter on the first working day of
every <week/month> until the debt is fully paid.
If this matter is not resolved by the time specified above, I reserve the right to
commence legal proceedings to recover the debt without further notice to you and
this letter may be tendered in court as evidence of your failure to pay. Legal action
may result in you having to pay legal costs, interest and could impact on your credit
history.
Should you wish to contact me to discuss, my telephone number is <insert number>.
Yours sincerely,

<Your name>