Tax Amnesty

There is tax amnesty when the State grants general pardon or intentionally
overlooked its authority to impose penalties on persons guilty of tax evasion or violation
tax. The government allows absolute forgiveness or waiver its right to collect what is due
in order to give the tax evader who wishes to reform a chance become a part of the new
society with a clean slate. (Republic vs. Intermediate Appellate Court, 196 SCRA 335)

Tax amnesty has limited applicability as to cover a particular taxing period on transaction
only.

Like tax exemption, tax amnesty is never favored nor presumed in law. It is granted by
statute. The terms of the amnesty must also be constructed against the taxpayer and
liberally in favor of the government.

Tax Condonation or Tax Remission

There is tax condonation or tax remission when the State desists or refrains from
exacting, inflicting or enforcing something as well as to restore what has already been
taken. (Juan Luna Subd. V. Sarmiento, 91 Phil ]. 370)

The condonation of a tax liability is equivalent to and is in the nature of tax exemption.
Thus, it should be sustained only when expressed in the law. (Surigao Consolidated
Mining v. Commissioner of Internal Revenue, 9 SCRA 728)

Equitable Recoupment

This doctrine of law states that tax claim for refund, which is prevented by prescription,
may be allowed to be used as payment for unsettle tax liabilities if both taxes arise from
the same transaction in which overpayment is made and underpayment is due. This
doctrine is not applicable to cases where the taxes involved are totally unrelated.

Set-off Taxes

This doctrine states that taxes are not subject to set-off or legal compensation because the
government and the taxpayer are not mutual creditor and debtor of each other. (Republic
vs. Mambulao Lumber C., 6 SCRA 662; Caltex Phils , Vs. COA, 208 SCRA 726)

A person cannot refuse to pay tax on the basis that the government owes him an amount
equal or greater than the tax being collected. The collection of a tax cannot await the
results of a lawsuit against the government. (Philex Mining Corporation vs.
Commissioner of Internal Revenue, CA and CTA, G.R No. 125704, 28 August 1998;
Francia vs. Intermediate Court, 162 SCRA 753)

Exceptions:

1. Where both the claims of the government and the taxpayer against each other have
already become due, demandable and fully liquidated (Domingo vs. Garlitos, 8
SCRA443); and
2. When there is an actual compromise between the taxpayer and the tax officer.

Taxpayer Suit

A “taxpayer suit” effected through court proceedings could only be allowed if the act
involves a direct and illegal disbursement of public funds derived from taxation. (Pascual
vs. Secretary of Public Works , 110 Phil. 331; 11 Am. Jun. 761)

Therefore, the following legal questions would be improper to be classified as taxpayer

suit:

1. Where the disbursement does not involve funds raised by taxation (Gonzales vs.
Marcos, 65 SCRA 624); and
2. To stop the Commission on Election from holding an exercise of suffrage or question
its inaction to call special election. (Dumlao vs. Commission on Elections, 95 SCRA
392; Lozada and Igot vs. Commission on Election, L-59068, 27 January 1983)

Compromises

This doctrine provides that compromises are generally allowed and enforceable when the
subject matter thereof is not prohibited from being compromised and the person entering
such compromise is duly authorized to do so

The law allows the following persons to do compromise in behalf of the government:

1. Only the BIR Commissioner is expressly authorized by the Tax Code to enter into
compromise for both civil and criminal liabilities subject to certain conditions; (Sec.
204,NICR)
2. The Collector of Customs is given the power to compromise with respect to customs
duties limited to cases where legitimate authority is specifically granted, such as in
the remission of duties; (Sec. 709, TCC)
3. The Customs Commissioner, subject to approval by the Secretary for Finance, has the
power to compromise cases involving the imposition of fines, surcharges and
forfeitures; and

Even so, there is no specific authority given to any public official to execute the
compromise so as to render it effective.