SUMMARY NOTES

I. Preliminary assessment notice (PAN)

 Written communication issued by Regional Assessment Division or other BIR office.
 Taxpayer has up to 15 days from the receipt to reply.
 Failure to reply: PAN shall make impending assessment final – demandable and non-
appealable.
 Agrees to Assessment of PAN: taxpayer pays the tax and so the BIR cancels the docket and
a termination/closure letter being sent to taxpayer.
 Disagrees to Assessment of PAN (Merely responds): a formal letter of demand and final
assessment notice (FLD/FAN) calling for payment of the tax deficiency will be issued to
taxpayer.

J. Formal letter of demand

 Final declaration of deficiency tax issued to taxpayer:
a) Failing to respond to the PAN within 15 days of its receipt.
b) Reply to PAN is unmeritorious.
 Issuance FLD/FAN: tantamount to a denial of the taxpayer’s reply to PAN.
 Requisites of a valid assessment (FLD/FAN)
1) Must be served within prescriptive period.
2) Must inform the taxpayer of the discovery of unpaid or still unpaid tax including
penalties.
3) Must show in detail the facts and assessment be based on the law, rules and regulations
or jurisprudence.
4) Must be served through registered mail or personal delivery.
5) Must be preceded by a pre-assessment notice.

K. Types of taxpayer’s protest

a) Request for reconsideration
 Basis of existing records without need of additional evidence.
b) Request for re-investigation
 Basis of newly discovered or additional evidence that the taxpayer intends to present
in the reinvestigation.
 Taxpayers:
 are mandatorily required to submit relevant supporting documents within 60 days
from the date of filing of the protest.
 required to sign “Waiver of the Statutes of Limitation” for a period not less than 6
mos. to give way to the reinvestigation.