The Bureau of Internal

Revenue
  The Bureau of Internal revenue (BIR) is an
administrative agency which is involved in the
administration and collection of national taxes. It is
Nature, under the supervision and control of the Department of
powers and Finance.
duties of the  It is part of the Revenue operations group of the
Department of Finance which includes the Bureau of
Bureau of Customs, the Service Revenue and the Legal Service.
Internal  In general, the powers and duties and the BIR are the
Revenue following:
1. Assessment and collection of all national internal
revenue taxes, fees and charges.
Nature, 2. Enforcement of all forfeitures, penalties and fines
powers and connected therewith.
duties of the 3. Execution of judgments in all cases decided in its favor
by the Court of Tax Appeals and the ordinary courts.
Bureau of 4. Give effect to and administer the supervisory and
Internal police powers conferred to it by the National Internal
Revenue Revenue Code (NIRC).
  The following taxes, fees and charges are deemed to
be national internal revenue taxes:
a. Income tax
b. Estate and donor’s tax
Internal c. Value-added tax
Revenue d. Other percentage tax
Taxes e. Excise tax
f. Dcoumentary stamp taxes
g. Such other taxes as are or hereafter may be imposed
and collected by the Bureau of Internal Revenue
  The bureau shall have a chief to be known as the
Commissioner of Internal Revenue (Commissioner) and
Chief Officials four (4) assistant chiefs known as Deputy
Commissioners. Each deputy commissioner shall
of the Bureau supervise one of the four groups – Operations Group,
Information Systems Group, Research Management
Group and Legal and Enforcement Group.
  The commissioner has been given broad powers in
order to enforce tax law and collect the needed
revenue
Powers of the
1. To interpret tax laws and to decide tax cases.
Commissioner
2. To obtain information, and to summon, examine,
of Internal and take testimony of persons.
Revenue 3. To make assessments and prescribe additional
requirements for tax administration and
enforcement.
  This power shall be under the exclusive and original
jurisdiction of the Commissioner, subject to review by
the Secretary of Finance.
 Exclusive jurisdiction is that confined to a particular
Power to tribunal to the exclusion of all others, while original
interpret tax jurisdiction is that conferred on, or inherent in a court
or tribunal, in the first instance.
laws and to
 The power to decide disputed assessments, refunds of
decide tax internal revenue taxes, fees or other charges, penalties
cases imposed in relation thereto, or other matters arising
under the NIRC or other laws or portions thereof
administered by the Bureau is vested in the
commissioner, subject to the exclusive appellate
jurisdiction of the Court of Tax Appeals.
Power to
interpret tax  Appellate jurisdiction is the power and authority
conferred upon a superior court to rehear and
laws and to redetermine cases which have been tried in inferior
decide tax courts.
cases
 1. To examine any book, paper, record or other data which may
be relevant or material to such inquiry.
Power to 2. To obtain on a regular basis any information from any person
other than the person whose internal revenue tax liability is
examine subject to audit or investigation, or from any office or officer of
books and the national and local governments, government agencies and
instrumentalities, including the Bangko Sentral ng Pilipinas and
other government-owned or controlled corporations

accounting 3. To summon the person liable for tax or required to file a return,
or any officer or employee of such person, or any person having
record and possession, custody, or care of the books of accounts and other
accounting records containing entries relating to the business
obtain of the person liable for tax, or any other person, to appear
before the Commissioner or his duly authorized representative
information at a time and place specified in the summons and to produce
such books, papers, records or other data, and to give
testimony.
Power to
examine
4. To take testimony of the person concerned, under
books and oath, as may be relevant or material to such inquiry
other 5. To cause revenue officers and employees to make a
accounting canvass from time to time of any revenue district or
region and inquire after and concerning all persons
record and therein
obtain
information
 1. To examine returns and determines tax due;
2. To conduct inventory-taking, surveillance and to
prescribe presumptive gross sales and receipts;
Power to 3. To terminate taxable period;
make 4. To prescribe real property values;
Assessments 5. To inquire into bank deposit accounts;
6. To accredit and register tax agents; and
7. To prescribe additional procedural or documentary
requirements.
  As a general rule, all deposits with abnks or banking
institutions shall be considered absolutely confidential
Bureau’s and may not be generally examined, inquired or look
authority to into by any person, government official, bureau or
office (based on R.A 1405 known as Bank Secrecy Law),
inquire into except in he following cases:
bank deposits 1. To determine the gross estate of the decedent; and
of taxpayers 2. When the taxpayer applies for a compromise of his
tax liability by reason of financial incapacity
  Compromise is a contract whereby the parties by
Authority of reciprocal concessions avoid litigation or put an end to
the one already commenced.
Commissioner  Grounds:
to 1. Reasonable doubt as to the validity of the claim
against the taxpayer exists;
compromise
2. The financial position of the taxpayer demonstrates
taxes clear inability to pay the assessed tax
Abatement or 1. The tax or any portion thereof appears to be unjustly
or excessively assessed; or
cancellation 2. The administration collection costs involved do not
of tax liability justify the collection of the amount due
  The Commissioner may delegate the powers vested on him under
the pertinent provisions of the Code to any of such subordinate
officials with the rank equivalent to a division chief or higher,
subject to such limitations and restrictions as may be imposed
under rules and regulations to be promulgated by the Secretray of
Finance, upon recommendation of the Commissioner.

Non-  However, the following powers of the Commissioner shall not be

delegated:
delegable 1. The power to recommend the promulgation of rules and
powers of the regulations by the Secretary of Finance;
2. The power to issue rulings of first impression or to reverse,
Commissioner revoke or modify any existing ruling of the Bureau;
3. The power to compromise or abate under Sec. 204 (A) and (B)
of the Code, any tax liability.
4. The power to assign or reassign internal revenue officers to
establishments where articles subject to excise tax are
produced or kept
  A tax credit is a claim for issuance of a tax credit certificate,
showing an amount owing from the government to the taxpayer
whom the latter is legally authorized to credit or offset against
national internal taxes payable by him, except withholding taxes.
 A refund is a claim for the payment of cash for taxes erroneously
or illegally paid by the taxpayer to the government.
Refund or  The Commissioner may credit or refund taxes erroneously or
illegally received or penalties imposed without authority under the
Credit of following guidelines:

Taxes 1. The taxpayer files in writing with the Commissioner a claim for
credit or refund;
2. A return files showing an overpayment shall be considered as a
written claim for credit or refund;
3. No tax refund be given resulting from availment of incentives
granted pursuant to special laws for which no actual payment
was made
 4. The claim must be filed within 2 years after the payment of the
tax or penalty.
 The following procedure must be observed by the taxpayer
claiming refund of the tax paid:
1. File a claim for refund within 2 years from the date of payment.
Refund or a. If the tax is paid in installments, the period is counted from the
last date or final instalment until the whole tax liability is fully
Credit of paid.
b. Where a corporation paid quarterly corporate income taxes in
Taxes any of the first 3 quarters during the taxable year but incurs a
net loss during the taxable year, the 2-year period shall be
counted from the date of the filing of annual corporate income
tax return.
2. Within 30 days from receipt of the Commissioner’s decision
denying the claim, and within 2 years from the date of paying the
tax, the taxpayer can appeal the decision to the Court of Tax Appeals
  However, where the 2 year period is about to lapse, the taxpayer
Refund or may appeal to the Court of Tax Appeals without waiting for the
Credit of decision of the Commissioner of Internal Revenue.
3. Within 15 days from the receipt of the decision of the Court of Tax
Taxes Appeals, he can file an appeal with the Supreme Court
  Any VAT-registered person, whose sales are zero-rated or
effectively zero-rated may, within 2 years after the close of the
taxable quarter when the sales were made, apply for the issuance
of a tax credit certificate or refund of creditable input tax paid
attributable to such sales, except transitional input tax, to the
extent that such input tax has not been applied against output tax.
Refunds or tax  The commissioner then shall grant a refund or issue the tax credit
credits of certificate within 120 days from the date of submission of
complete documents in support of the application files above.
input tax  In case of full or partial denial of the claim for tax refund or tax
credit, or the failure on the part of the Commissioner to act on the
application within the prescribed period, the taxpayer affected
may, within 30 days from the receipt of the decision denying the
claim appeal the decision or unacted claim with the Court of Tax
Appeals.