2.

I will inform him that a compromise is not allowed anymore because the case has already been filed in
court. The moment the case is filed in court, it cannot be subject to compromise anymore.
3. Piolo is correct. Under RA 1405 the BIR Commissioner’s power to inquire into a taxpayer’s bank deposit
is not in conflict with the Bank Secrecy Law. Based on the provision of the NIRC, the Commissioner is
authorized to inquire into bank deposit:
a. To determine the gross estate of a decedent; and
b. When a taxpayer applies for a compromise of his tax liability by reason of financial incapacity.

4. I will request for a compromise of the assessed tax on ground that the financial position of the taxpayer
demonstrates clear inability to pay the assessed tax. Clearly, even if the case is decided against the
taxpayer, he will not have the money to pay the assessed tax. It is therefore an exercise in futility to
forego with the case against him.

5. The claim for refund should be denied on ground of prescription. Recovery of taxes erroneously paid
or illegally collected are allowed only when filed within the two-year prescriptive period. The two-year
period should be computed from the time of actual filing of the Adjustment Return and final payment of
the tax (Phil. Bank of Communications vs. CIR, 302 SCRA 241).
Thus, the two year prescriptive period lapsed on April 5, 2008.

6. The Commissioner may not grant the refund when there is a deficiency tax assessment against the
claimant-taxpayer. To award such refund despite the existence of the deficiency assessment is an
absurdity and a polarity in conceptual effects (Commissioner vs. CA and Citytrust Banking Corp, 234 SCRA
348).

7. Yes. Where a corporation paid quarterly corporate income taxes in any of the first three quarters during
the taxable year but incurs a net loss during the taxable year, the two-year period for the filing of claim
for refund or credit shall be counted from the date of the filing of the annual corporate income tax return
(Commissioner vs. TMX Sales, 205 SCRA 184).

8. a. The counting of the two (2) year period commences to run from the date of final payment.
Considering that the final payment was made on July 9, 2009, the prescriptive period will end on July
9, 2011.
b. Augusto has thirty days from receipt of the decision of the CIR to file an appeal with the CTA. Since
it was received on May 15, 2011, he has until June 14, 2011 to file his appeal with the CTA.
c. He is given 30 days from receipt of the CIR’s decision but not exceeding 2 years from the date of
final payment. Hence, he has until July 12, 2011, or the day following the receipt of the decision, to
file an appeal with the CTA.

EXERCISE 2-2. MULTIPLE CHOICE

1. C

2. A

The National Bureau of Investigation and the Bureau of Immigration are under the Department
of Justice.
The Bureau of Local Government Finance is under the Department of Interior and Local
Government.