4. In what cases do issuance of Warrant of Distraint/Levy (WDL) be considered premature?

Is BIR
allowed to issue a premature warrant? Justify your answer. (5 Points)

When WDL is issued, it has far-reaching implications as far as taxpayer remedy is concerned. It is
only the Court of Tax Appeals (CTA) that can stop its execution. No appeal taken to the CTA from the
decision of the Commissioner of Internal Revenue on a disputed assessment shall suspend the payment,
levy, distraint, and/or sale of any property of the taxpayer for the satisfaction of his tax liability, unless
the CTA suspends the collection after payment of bond.

Unfortunately, there are cases when warrants of distraint (WDL) and levy/garnishment are
prematurely issued.

Under Revenue Memorandum 39-2007, revenue officers are instructed to start enforcement
proceedings in the following instances:

1. Disputed assessments finally decided by the Commissioner or Regional Director, as the case
may be, against the taxpayer;

2. Assessments upheld by the CTA in Division whether or not appealed to the CTA En Banc, or
upheld by the CTA En Banc whether or not appealed to the Supreme Court. Based on this RMO, upon
issuance by the Commissioner or Regional Director of the final decision on the disputed assessment
(FDDA) against the taxpayer or upon issuance by the CTA in Division or En Banc of its decision upholding
the assessment, Warrants of Distraint and Garnishment, and/or Levy shall be immediately issued and
served. This was reiterated in RMO No. 42-2010.

5. What are the administrative and judicial remedies of the BIR to collect delinquent taxes? (5 Points)

The Bureau of Internal Revenue has the power to enforce the collection of unpaid taxes either
through summary administrative remedies, such as the issuance of a warrant of distraint and/or levy, or
judicial ones, such as filing a civil or criminal action against the taxpayer.

For the former, the BIR may seize the taxpayer’s personal properties, including but not limited
to, stocks, securities, debts, credits, bank accounts and rights to personal properties when he or she fails
to pay his or her delinquent tax within the required period. Furthermore, the bureau may levy on the
delinquent taxpayer’s real properties, simultaneously or after the distraint of personal properties.

Under Revenue Memorandum Order 35-2019, issued on July 8, 2019, the BIR may issue a WDL
without sending a Preliminary Collection Letter and Final Notice Before Seizure to the delinquent
taxpayer.

The BIR’s power to distraint and/or levy properties must, however, yield to the taxpayer’s
constitutional right to not be deprived of property without due process. In several cases, the courts
reiterated that the due-process requirements in tax assessments are not mere formality, but mandatory
substantive ones.