Chapter 18 - Tax Remedies

6. The government may pursue judicial action simultaneousl y with the

distraint and/or levy of a taxpayer's property.
7. The statutes of limitation for the assessment and collection of taxes shall be
suspended when the taxpayer is out of the Philippines.
8. The remedies of the taxpayer for a judicial appeal or administrativ e appeal
after the 180-day period are mutually exclusive.
9. The claim for refund for erroneously paid taxes must be filed within 2 years
from the filing of the return.
10. A claim for refund is not necessary when a return is filed showing an
overpayment of tax.
11. In a compromise settlement, taxpayers must pay at least 10% of the basic
assessed tax in cases of financial incapacity.
12. In a compromise settlement, taxpayers must pay at least half of the basic
assessed tax in all other cases other than financial incapacity.
13. A compromise may be beneficial to both the government and the taxpayer.
14. Minor criminal violations may be compromised.
15. Taxes may be abated by the government when the tax case against the
taxpayer has already prescribed.

Multiple Choice - Theory 1

1. The 3-year prescriptive period will be extended by any of the following
instances except one. Choose the exception.
a. Failure of the taxpayer to file a return
b. Waiver by the taxpayer of the statutes of limitation
c. Filing by the taxpayer of a fraudulent return
d. Fortuitous events

In the case of late filing of return, the prescriptive period for assessment
shall be counted as
a. 3 years from the filing of the return.
b. 3 years from the payment of the tax.
c. 5 years from the deadline of the return.
d. 5 years from the filing of the return.
'
\_ 3. Which is correct regarding the pre-audit of a tax return?
a. Pre-audit is part of a regular audit.
b. Pre-audit requires the issuance of an LA.
c. Pre-audit is done to check mathematical computations or ascertain
correctness and validity of deductions claimed by the taxpayer
d. Pre-audit is a substitute for a regular audit.
 Chapter 18- Tax Remedies

~,4- The letter of authority will not be issued by a

a. Regional director.
b. Assistant commissioner - LTS.
c. Commissioner of internal revenue.
d. Revenue district officer.

'6 5. A subpoena for the production of documents is a

a. Subpoena tecum
b. Subpoena ad testificandum
c. Subpoena duces tecum
d. Subpoena duces testificandum

Which is not a taxpayer protest?

a. Request for reconsideration
b. Request for settlement by compromise
c. Request for re-investigation
d. A and B

Statement 1: A revised assessment can no longer be disputed.

Statement 2: A cancelled assessment can no longer be enforced.

Which is false?
a. Statement 1 c. Both statements
b. Statement 2 d. Neither statement

pa.
I

Which of the following will not be involved during the assessment stage?
a. Preliminary assessment notice
b. Formal letter of demand and final assessment notice
c. Final decision on disputed assessment
d. Preliminary collection letter

Which is not a remedy of the government to enforce collection of unpaid

taxes?
a. Seizure of taxpayer properties
b. Imposition of administrative penalties
c. Suspension of business operations
d. Abatement of the tax liability of the taxpayer

·$10. The failure of the taxpayer to make the installment payment of the tax shall
result in
a. forfeiture of the tax balance.
b. the entire tax balance becoming due and demandable immediately.
c. the issuance of a new assessment.
 d. the criminal prosecutio n of the taxpayer.

.c 11. Which is not required in an assessmen t notice?

a. A declaration of tax deficiency from the taxpayer
b. f/i. demand for the payment of tax deficiency of the taxpayer
c. A statement to the effect that the taxpayer must dispute the findings of
the examiner
d. The details of the supporting facts and the legal basis of the assessmen t

Exceptionally, an FLO /FAN may be issued outright except when

a. The taxpayer interposed valid defenses
b. The deficiency tax results from mathemati cal errors
c. The deficiency tax pertains to unremitted withholdin g taxes
d. The deficiency tax pertains to excise tax on excisable articles

L 13. To freeze bank accounts and interests, the governme nt shall issue a
a. Notice of levy
b. Warrant of distraint
c. Warrant of garnishme nt
d. Preliminar y collection letter

A 14. The issuance of an FLO /FAN after protest has been made by the taxpayer is
a. a denial of the protest.
b. an illegal procedure which deprives the taxpayer of due process.
c. called jeopardy assessmen t.
d. intended to expedite the collection of taxes.

~ ,15. Ana. assessmen t made without the benefit of a complete or partial audit
Jeopardy assessmen t
b. Illegal assessmen t
c. Disputed assessmen t
d. Final~ess ment

Multiple Choice ~ heory 2

1. In general, the conduct of the audit investigation of the taxpayer shall not
run over
a. 60 days. c. 180 days.
b. 120 days. d. One year.

l )2. As a rule, taxpayers shall be subject to audit

- a. annually. /
b. at least once a year.
c. only once a year.
 -•
1
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d. for as long as the examiner deems it fit considering the taxpayer's audit
risks.

A taxpayer may be subject to multiple audits during the year in the

following cases, except one. Choose the exception.
a. Request for reconsideration by the taxpayer which was granted by the
CIR
b. When there is a need to verify capital gains tax liabilities
c. Discovery by the CIR of a fraud or mistakes committed by the taxpayer
d. None of these

Upon receipt of a preliminary assessment notice, the taxpayer must

respond within
a. 10 days. c. 30 days.
b. 15 days. d. 60 days.

The final decision of the CIR may be administratively disputed by the

taxpayer within
a. 15 days from receipt thereof.
b. 15 days from issuance thereof.
c. 30 days from receipt thereof.
d. 30 days from issuance thereof.

A taxpayer who concedes to a BIR assessment must

a. pay the tax.
b. file a motion for re-investigation.
c. pay the tax and file a claim for refund.
d. file a petition for review with the CTA.

!b7. Documents are required to support a

a. Request for reconsideration
b. Request for re-investigation
c. Both A and B
d. Neither A nor B

rt) s. The document must be submitted within

.l]; a. 60 days from the receipt of the FLO/FAN.
b. 60 days from the submission of the protest.
c. 30 days from the receipt of the pre-assessment notice.
d. 30 days from the issuance of the FLO/FAN.
 A taxpayer's motion for reconsideration may be acted upon by the BIR
within
a. 180 days from the submission of documents.
b. 180 days from the filing of the protest.
c. 60 days from the filing of the filing of the protest.
d. 60 days from the receipt of the final assessment notice.

~ 10. within
A taxpayer's motion for re-investigation may be acted upon by the BIR

a. 180 days from the submission of documents.

b. 180 days from the filing of the protest.
c. 60 days from the filing of the filing of the protest.
d. 60 days from the receipt of the final assessment notice.

) 11. The seizure of personal property is a

a. Distraint c. Levy
b. Garnishment d. Forfeiture

r{I 12. The seizure of real property is a

'-._,) a. Distraint c. Levy
b. Garnishment d. Forfeiture

$13. The seizure of interests such as bank accounts and credits of the taxpayer is
a
a. Distraint c.Levy
b. Garnishment d. Forfeiture

iC- 14.
The remedies of distraint levy can be used only when the amount of tax
a. do not exceed P100.
b. do not exceed Pl,000.
c. exceeds Pl00.
d. exceeds Pl,000.

Pr 15. Used to validate the legal claims of the government to a taxpayer's property
a. Notice of tax lien
b. Notice of seizure
c. Warrant of distraint or levy
d. Final notice

Multiple Choice: Theory 3

1. Seized properties shall not be sold at public auction
a. after the property has been advertised for at least 30 days.
b. if the taxpayer settled the assessment.
 c. if the taxpayer did not pay the assessme nt.
d. if the amount of tax does not exceed P100.

Jn. Who shall conduct the distraint of property when the amount of tax do not
exceed Pl,000,0 00?
a. Revenue director
b. Revenue district officer
c. Commis sioner of Internal Revenue
d. Deputy Commissioner

Properti es of the taxpayer shall be seized in sufficient quantity to cover the

~3.
following costs except one. Choose the exception.
a. Tax due including penalties and interest
b. Expenses of the distraint
c. Selling expense of the property
d. Service fee of the BIR

Constructive distraint is least likely to be made on a property of a taxpayer

~4.
who is
a. intendin g to remove or conceal his property .
b. retiring from a business subject to tax.
c. intendin g to leave the Philippines.
d. changing business address with due notice given to the BIR.

Cs. Statement 1: Levy and distraint may be done simultan eously.

Statement 2: Levy may be done after the distraint of personal property .

Which is correct?
a. Stateme nt 1 c. Both statemen ts
b. Stateme nt 2 d. Neither statemen t

Statement 1: The governm ent may forfeit a property in its favor after the
failure of three auction sales to raise the amount of the unpaid tax.
Statement 2: The taxpayer may redeem the property forfeited by the
governm ent within two years.

Which statemen t is false?

a. Stateme nt 1 c. Both statemen ts
b. Stateme nt 2 d. Neither statemen t

Statement 1: RATE cases are filed even in the absence of an assessm ent that
has attained the state of finality.
 - • •- r • - t • - • "-Al'\. I '-'-"11 IVUIV~

Statement 2: Returns are considered fraudulent if items of income are

underdeclared or items of deductions are overdeclared by more than 30%.

Which statement is correct?

a. Statement 1 c. Both statements

iB.
b. Statement 2 d. Neither statement

Collections must be enforced by the government within

a. 3 years from the date of assessment.
b. 5 years from the date of assessment.
c. 10 years from the date of assessment in case of fraud.
d. 10 years from the date of filing of return in case of fraud.

Which is not required to be included in the reply to the Preliminary

Assessment Notice?
a. Explanation for matters questioned by the BIR examiner
b. A request for BIR response within 15 days
c. Prayer for full or partial cancellation of the PAN
d. Factual and legal bases supporting the taxpayer's position

ilO. The prescriptive period of assessment and collection will not be suspended
when the
a. CIR is prohibited from making an assessment.
b. BIR rejects the taxpayer's request for a reinvestigation.
c. taxpayer is out of the Philippines.
d. taxpayer's properties cannot be located.

Which is incorrect with respect to the recovery of erroneously paid taxes?

a. A claim for refund or credit must first be filed within 2 years from the
payment of the tax
b. The unfavorable decision of the CTA must be appealed to the Supreme
Court within 15 days
c. The judicial action to recover erroneously paid taxes must be
interposed within 30 days from the receipt of BIR's denial of the claim
for refund or credit but must be within the 2-year period.
d. If the BIR did not act on the claim for refund or credit, the taxpayer
must proceed to the CTA within 30 days form the expiration of the 2-
year period

Statement 1: Refund checks or warrants which remain unclaimed or

unencashed within 5 years will be forfeited unless revalidated.
Statement 2: Tax credit certificates which remain unused within S years will
be forfeited unless revalidated.
 Which is true?
a. Statement 1 c. Both statements
b. Statement 2 d. Neither statement

$13. Which is true regarding a compromise?

a. Taxpayers requesting for a compromise must settle at least 40% of the
tax.
b. It is entered into when a reasonable doubt as to the validity of the claim
against the taxpayer exists.
c. Compromise is a coercive way to enforce collection of tax.
d. All of these

14. Who is not authorized to approve a taxpayer's offer for compromise?

a. The Revenue District Officer who has jurisdiction over the taxpayer
b. The Commissioner of Internal Revenue
c. The National Evaluation Board
d. The Regional Evaluation Board

15. Which can be compromised?

a. Withholding tax cases
b. Criminal tax fraud ·cases
c. Protested assessment cases
d. Cases of reduced assessment which were agreed by the taxpayer

L 16. Which cannot be compromised?

a. Collection cases filed in courts
b. Civil tax cases contested by the taxpayer before the courts
c. Delinquent accounts with approved scheduled installment payments
d. Minor criminal violations

17. The CIR may not abate taxes in which of the following conditions?
a. The tax or any portion of which appears to be excessively assessed.
b. The taxpayer offered for a compromise settlement
c. The taxpayer is dead with no property left.
d. The tax case already prescribed.

Multiple Choice: Application 1

1. The BIR found reasonaple basis to assess the taxpayer for delinquent
income taxes for the calendar year 2015. The assessment must be served
a. On April 15, 2018.
b. Before April 15, 2018.
c. On or before April 15, 2018.
 Chapter 18 - Tax Remedies

d. On or before April 15, 2019.

Mr. Yaman filed his 2014 income tax return on June 30, 2015. The BIR
discovered a deficiency income tax on August 15, 2016. The deficiency tax
assessmen t must be served
a. On April 15, 2018
b. On or before April 15, 2018
c. On or before June 30, 2018
d. On or before August 15, 2019

~ 3. Mr. Taha filed his 2015 income tax return on March 1, 2016. On October 15,
2017, the BIR discovered in an audit that the return filed was fraudulent.
When is the last day to send the assessment ?
a. April 15, 2020
b. March 1, 2026
c. April 15, 2026
d. October 15, 2027

(__ 4. On May 15, 2014, the BIR discovered that the taxpayer did not file his
income tax return for the year 2012. When is the last day to send the
assessment ?
a. May 15, 2019
b. April 15, 2016
c. May 15, 2024
d. April 15, 2022

\js. On June 3, 2015, the BIR sent a deficiency assessment on the 2013 income
tax of a taxpayer which had become final and executory. The taxpayer filed
the pertinent income return on time on April 2, 2014.

When is the last day of the BIR to collect by distraint and/ or levy or by
judicial action?
a. July 3, 2018
b. July 3, 2020
c. April 2, 2017
d. April 2, 2024

6. Mr. Kumon received a deficiency assessment (dated June 6, 2014) on his

2013 income tax on June 8, 2014. If he did not settle the tax, he should
expect the BIR to enforce collection by distraint levy and/ or judicial action
a. by June 8, 2019.
b. on or before June 8, 2019.
c. by June 6, 2019.
 d. on or before June 6, 2019.

The BIR discovered that no estate tax was paid on the estate of a certain
decedent who died November 2, 2010. The estate tax return should have
been filed April 1, 2011.
To avoid prescriptio n, the BIR should send an assessmen t letter not later
than
a. November 2, 2020.
b. April 1, 2021.
c. November 2, 2013.
d. April 1, 2013.

On March 5, 2015, the BIR discovered a deficiency value added tax for the
quarter ended Septembe r 2008. The deficiency did not arise from error or
fraud.

Which is correct?
a. The BIR must send the assessmen t notice before March 5, 2018.
b. The BIR must send the assessmen t notice before Septembe r 30, 2018.
c. The BIR must send the assessmen t notice before March 5, 2025.
d. The BIR has no more remedies since the tax prescribed .

C Multiple Choice: Application 2

1. A taxpayer who received preliminar y assessmen t on June 15, 2014 must
a. file a protest on or before July 15, 2014.
b. submit documents on or before Septembe r 13, 2014.
c. submit a written reply to the preliminar y assessmen t on or before June
30, 2014.
d. file a petition for review to the Court of Appeals on or before June 30,
2014.

~ 2.
A taxpayer received a formal letter of demand and a final assessmen t notice
on August 31, 2015. He must
a. file a protest on or before Septembe r 30, 2015.
b. make a written reply on or before Septembe r 15, 2015.
c. await for a subpoena duces tecum on or before Septembe r 30, 2015.
d. file a petition for review with the Court of Tax Appeals before
Septembe r 15, 2015.

~3. A taxpayer submitted a motion for reconsider ation in response to the BIR's
formal letter of demand and final assessmen t notice. He must
a. Wait for a period of 180 days for BIR action.
 b. Subm it docu ment s withi n the 180-d ay perio d.
c. Subm it docu ment s withi n 60 days.
d. Wait for the BIR to issue a subp oena duces tecum .

A taxpa yer subm itted a motio n for re-in vesti gatio n in respo nse to the BIR's
forma l letter of dema nd and final asses smen t notic e. He must
a. Wait for a perio d of 180 days for BIR actio n.
b. Subm it docu ment s withi n the 180-d ay perio d.
c. Subm it docu ment s withi n 60 days.
d. Wait for the BIR to issue a subp oena duces tecum .
t
A taxpa yer recei ved an adve rse final decis ion on a dispu ted asses smen
He
whic h was signe d by an autho rized repre senta tive of the Comm ission er.
must
n
a. file a petiti on for revie w on certio rari with the Supr eme Cour t withi
15 days.
b. file a petiti on for revie w with the Cour t of Tax Appe als withi n 30 days.
c. eleva te the case befor e the Comm ission er of Inter nal Reve nue.
d. B orC

( 6. An adve rse final decis ion on dispu ted asses smen t issue d by the
Comm ission er must be dispu ted by filing a
a. petiti on for revie w with the National Evalu ation Board.
b. motio n for recon sider ation with the Comm ission er.
c. petiti on for revie w with the Cour t of Tax Appeals.
d. petiti on for revie w on certio rari with the Supr eme Court.

7. The following data relate s to a dispu ted asses smen t of a taxpa yer:

Deadline of the retur n : June 30, 2012

Filing of the retur n : June 30, 2012
Date PAN was recei ved : July 15, 2015
No reply was made to the PAN
Date FLD /FAN was recei ved : Augu st 5, 2015

What is the taxpa yer's next proce dure?

4,
a. He must file a motio n for recon sider ation on or befor e Septe mber
2015 .
.
b. He must reque st for a re-inv estiga tion on or befor e Septe mber 4, 2015
c. He must subm it docu ment s on or befor e Octo ber 4, 2015 .
d. No more becau se the taxpa yer defau lted.
Sf:,__ 8. The following data relate to the disputed assessmen t of a taxpayer:

Date FLD /FAN was received : August 5, 2015

Filing date of a motion for reconsider ation : August 29, 2015
CIR's denial of the request : December 4, 2016

What is the taxpayer's next procedure?

a. Petition for review before the CTA on or before January 3, 2016.
b. Petition for review before the CTA on or before January 31, 2016.
c. Petition for review on certiorari before the Supreme Court on or before
January 3, 2016.
d. Petition for review on certiorari before the Supreme Court on or before
January 31, 2016.

The following data relates to the disputed assessmen t of a taxpayer:

Date of denial of protest : March 5, 2011

Date petition for review was filed with CTA : March 29, 2011
Date of release of an adverse CTA en bane decision : December 4, 2014

What is the taxpayer's next procedure?

a. File a motion for reconsider ation with the BIR on or before January 3,
2015
b. Petition for review on certiorari with the Supreme Court on or before
January 3, 2015
c. Petition for review on certiorari with the Supreme Court on or before
December 19, 2015
d. No more. The taxpayer has slept on his right.

~ 10. A taxpayer defaulted for failing to seasonably interpose a valid protest on ·

\ ~ On December 31, 2015, the BIR sent
an assessmen t issued January 5, 2009.
a preliminar y collection letter.

What is the best defense of the taxpayer?

a. Raise the issue of prescriptio n.
b. Apply for a compromi se settlement .
c. Apply for an extended payment term.
d. Raise the issue of failure of jurisdiction.