Chapter 1

Tax Remedies

Summary: Tax Remedies of the Taxpayer and the Government

Remedies of the Taxpayers
These are legal actions which a taxpayer can avail of to seek relief from the undue
burden or oppressive effect of tax laws, or as a means to check possible excesses by
revenue officers in the performance of their duties.
Remedies before payment
1) Administrative protest
2) Request for reconsideration
3) Request for reinvestigation
4) Judicial protest
Remedies after payment
1) Claim for refund
2) Claim for tax credit
Remedies of the Government in Collecting Taxes
These are courses of action provided by or allowed in the law to implement the tax
laws or enforce tax collection.
refer to government remedies at the administration
1) Administrative remedies -

level through the Bureau of Internal Revenue

a) Distraint of personal property and
Levy of real property
b) Enforcement of forfeiture
c)Enforcement of tax lien
d) Compromise
e) Civil penalties
refer to remedies of the government
that are enforce through
2)
4Judicialremedies -

judicial action
1. Ordinary civil action
2. Criminal action.

513
 Tie Remcdie Tap Remedies
The SC's decision further provides that a Letter of Notice (LN) is
different and different purpose than LOA. It is not found
Collection

a
Assessment
and
officer autho
antirely
in the
serves
NIRC and is not an authority to conduct an audit. Due process
Tax action of an

Assessment"
is the
official
under
the law from a law
xpayer. Tis demands that after an LN has served its purpose, the revenue officer
"Tax tax due

in ascertaining
the
amount of
should have properly secured an LOA before proceeding with the further
and assessment of the taxpayer.
action necessarily involves:
examination
sum due
computation
of the taxpayer; and
Delinquency is the state of a person upon whom the personal
The the
effect to and are
obligation to pay the tax has been fixed by lawful
a. assessment
to that
notice Sometime after the
simultaneousIy win orfor the payment
b. Giving Ving of
payment of the fails to pay the tax within the time limited by law.
c. The making,
demand upon
him
tax thereafter
notice, of
a
deficiency stated
What is a Pre-Assessment Notice (PAN)?
of the
The Pre-Assessment Notice is a communication issued by
the process
Tax audit" is
scrutinizing the Letter of Authority (LOA) is BIR Office,
over, or Assessment Division, or any other concerned
examining9, going to is an official document that Regional has been audited of the findings of the
records of the taxpayer informing a Taxpayer who
books and tax Revenue
of the empowers the review of these findings. If the Taxpayer
Revenue Officer, following
correctness
ascertain the
the taxpayer. It can Officer to examine and
findings stated in the PAN, he shall then have fifteen
declared and paid by disagrees with the
"Letter of scrutinize a taxpayer's the
a of the PAN to file a written reply contesting
only be performed
upon
the
Commissioner of books of accounts and (15) days from his receipt
authority" issued by
proposed a s s e s s m e n t .

Internal Revenue or Regional

Director. other accounting records,
(PAN)" is a in order to determine the
"Pre-assessment notice When is PAN not Required?
taxpayer's correct internal
written notice given to a taxpayer
of the BIR revenue tax liabilities. In to Section 228 of the Tax
informing him of the findings nder 3.1.2 of RR 18-2013 in accordance
deficiency in his tax the absence of such an shall not be required in any of the following
officer/s relating to a
and the authority, the assessment Code, a s amended, a PAN
law
return, indicating therein the cases:
the assessment is made or examination is a nulity.
facts on which
the result of
and requiring the taxpayer to respond (CIR vs. Sony Phils., Inc., 1. When the for any deficiency tax is
finding
given period, otherwise, the 635 SCRA 234). of the tax appearing on the
within a mathematical error in the computation
Commissioner or his duly
authorized the taxpayer; or
face of the tax return filed by
representative shall issue an assessment between the tax
based on his findings. been determined
2. When a discrepancy has the withholding
remitted by
withheld and the amount actually
LETTER OF AUTHORITY (RMC 75-2018) agent; or

dicard or tax credit of

The judicial ruling of the Supreme Court in the case or M to claim a refund
3. When a taxpayer who opted taxable period was
Phils., Inc. vs. CIR (GR No. 222743) states that "no assessment a a l withholding tax for a
creditable the
proval excess
and automatically applied
issued or no assessment functions can be done without
the. P The determined to have carried over liabilities for the
estimated tax
claimed against the
of the CR or his duly authorized representative, through LOAemnt
concept of LOA is therefore Any tax assessm
s a m e amount
of the succeeding
taxable year; or
clear and unequivocal. taxable quarter or quarters
issued without an LOA is a violation of the taxpayers' right to duo proces

and is therefore
"inescapably void" (RMC 75-2018) 515
514
 Tax Remcdies
articles has
lar Remedies
tax due on
excisable
not been paid;
4. When the excise ASSESSMENT OF THE TAX LIABILITY
or
purchased or imported y an Three (3) years- commences to run
5. When an article locally
not limited to, vehicles, capital exemn day prescribed by law for filing) or filed,after date the return is due (last
such as, but pment whichever comes later. f the
person,
parts, has been sold, traded r return is filed before the last day for filing, the prescriptive
machineries and spare
to non-exempt persons
sterred begins to run only after such last day. period

Letter of Demand If the return is filed after the last day or due
In the above
cited cases, a Final r .

Final date, the period

shall be
Shall be issued outright. counted from the day the return is filed. If the return
Assessment Notice (FLD/FAN) amended
was
substantially, the period starts from the filing of the amended return.
to issue PAN?
Who has the Authority
Ten (10) years when:
Under RMC 11-2014, the following persons has the authority to issue 1. No return is filed or The prescriptive period
2. The return is false or fraudulent commences from the date
PAN:
with intent to evade the tax of discovery
1. of Internal Revenue
Commissioner
2. Revenue Regional Directors Considering the different periods for the filing of various
3. Assistant Commissioner Large Taxpayers Service; or tax returns, the reckoning for the
4. Assistant Commissioner- Enforcement and Advocacy Service
counting of the prescriptive
period differs for each type of tax. For instance, for withholding
taxes, the three-year period shall be counted from the date
Taxpayers shall submit/file their responses to the PAN with the required for the filing of the monthly return while for value added
duly authorized representative of the Commissioner who signed tax purposes, prescriptive period shall be reckoned from the
the PAN. prescribed filing date of the quarterly returns. On the other hand,
for income taxes, while a quarterly return is required to be filed,
Prescriptive Periods for Assessment and Collection
the prescriptive period is counted from the required filing date for
the annuail income tax return rather than the quarterly return.
The right of the government to assess and later on to collect the
taxis subject to
Upon the
prescription as provided for under Section 203 of
the Tax COLLECTION OF THE TAX
Code. lapse
no longer exercise such
or expiration of such period, the government can Five (5) years from assessment
right.
Ten (10) years- without assessment, and in case of false or
fraudulent réturns with intent to evade the tax

Criminal Liability
Five (5) years from commission or discovery of the violation,
whichever is later.

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 Tax Remedies Tax Remcdies
DUE PROCESS REQUIREMENT IN THE ISSUANCE OF A
DEFICIENCY TAX ASSESSMENT
Periods

Suspension of Prescriptive
of the time
prescribed for the ac alnde of procedure in the issuance of a
If before the
the
expiration
Commissioner and
the taxpayer may agree
Deri
ment
Writina Section 3 of RR 18-2013 dated Novemberdeficiency
28, 2013)
tax assessmet:
under
of the tax, both period within the
the running of the prescriptive prescrinfi greed
to suspend within the 3-year Preliminary Assessment Notice (PAN}/ Final Assessment Notice
waiver must be
exeCuted
waiver shall bei
Perio
upon. The otherwise said (FAN)
prescribed under Section 203, If after review and evaluation
by the
Commissioner or his duly authorized Issuance of FAN
It is likewise suspended: representative, as the case may be, it is
and Demand Letter
from making the assessmens determined that there exists sufficient basis to
Commissioner is prohibited or is tantamount to
1. When the court and for 60.da
in assess the taxpayer for any deficiency tax or
distraint or levy proceeding
or a
ys denial of Reply to
beginning the for review in the taxes, the said Office shal issue to the
such as when there is a pending petition
thereafter, the filing of such taxpayer a Preliminary Assessment Notice PAN. Essential
on the protested assessment,
CTA from the decision for collection (PAN) for the proposed assessment (RR 18- elements of due
the runnning of the prescriptive period
petition interrupts 2013). It shall show in detail the facts and the process are notice
for a reinvestigation or reconsideration law, rules and regulations, or jurisprudence on and onnorti initv tn
2. When the taxpayer requests
the Commissioner. which the proposed assessment is based.
which is granted by

or reconsideration If the taxpayer fails to respond" within

3. When the taxpayer requests for a reinvestigation
fifteen (15) days from date of receipt of the PAN, LEGAL EFFECTS OF
the address given by him in the he shall be considered in default, in which case, a ISSUANCE OF FAN:
4. when taxpayer cannot be located in
retun Formal Letter of Demand and Final Assessment
it creates legal
Notice (FLD/FAN) shall be issued calling for
obligation on the part
5. when the warrant of distraint and levy is duly served, but no property payment of the taxpayer's deficiency tax liability, of taxpayer to pay tax
of the taxpayer could be located inclusive of the applicable penalties. to the govemment.
However, if taxpayer
6. when the taxpayer is out of the Philippines. If the taxpayer, within fifteen (15) days fies timely protest,
from date of receipt of the PAN, "responds that assessment does not
become final and
he/it disagrees with the findings of deficiency tax
or taxes, an FLD/FAN shall be issued within
executory.
fifteen (15) days from filing/submission of the
of the
taxpayers response, calling for payment
tax liability, inclusive of the
taxpayer's deficiency
applicable penalties.

519
518
 Tax Remedis Tat Remedics
ference between Request for Reconsideration and
investigation Request for Re-
RR 18-2013)
(Under
authorized
ASSESSMENT

DISPUTED

The
taxpayer or
its
protest
Request for Reconsideration Request for Re-investigation
agent may As to Nature/Definition
representative
or tax
aforesaid
FLD/FAN
Request for Refer to a plea of re-evaluation of an
the Refer to
administratively
against
from date of
receipt
thereof. Reconsideration assessment on the basis of existing records
a plea of
re-evaluation of an
within thirty (30)
days a s s e s s m e n t may
file a Refer to a plea of without need of additional evidence. It ay
assessment on the basis of
newy
protesting an r e c o n s i d e r a t i o n re-evaluaton of an discovered or additional evidence that
The taxpayer involve both a question of fact or of law or
written request for a taxpayer intends to present in the
assessment on the
reinvestigation. basis of existing both.
reinvestigation. it may also involve a
records question ci fact or of law or both.
amended by RR 18- without As to the
Under RR 12-99
as
need of additional suspension of the 3-year period
for requestfor reinvestigation, Shall not suspend the 3-year period to Shall suspend the 3-year
2013 provides that supporting evidence. It may period to
submit all relevant
the taxpayer
shall
his protest within sixty involve both a collect.
collect
documents in support
of As to Evidence
of his letter of protest, question fact or
Limited to the evidence already at hand.
(60) days from date filing shall become final
of Entails the reception and evaluaton of
of law or both.
otherwise, the
assessment Hence, submission of additional evidence is add'bonal evidence. Failure to submit
documents" refer to
The term "relevant supporting Request for no longer required. addibional evidence within 60 days
to support the legal
those documents necessary from the flng of the protest letter will
and factual bases in disputing
a tax assessment Reinvestigation
Refer to a plea of make the assessment final and
as determinedby the taxpayer. The sixty (60)-day re-evaluation of an executory.
period for the submissionof all relevant assessment on the As to the approval of the Commissioner
Supporting documents shall notapply
to Can be availed so long as the request is BIR Commissioner must frst grant the
basis of newly
requests for reconsideration
discovered r dulyindicated in the protestletter requestfor reinvestigation.
"the assessment additional evidence
Furthermore, the term THE TAXPAYER SHALL STATE IN HIS PROTEST:
that a taxpayer
shall become final" shall mean the taxpayer is
barred from disputing the correctness of FLD/FAN
intends to present in a) The nature of protest whether reconsideration or reinvestigation,
the reinvestigation. specifying newly discovered or additional evidence he intends to
by the introduction of newly discovered or It may also involve present if it is a request for reinvestigation
additional evidence because he/it is deemed to
a question of fact or b) Date of the assessment notice, and
have lost hislits chance to present these of law or both. c) The applicable law, rules and regulations, or jurisprudence on which
evidences. The BIR shall then deny the request
for "reinvestigation" through the issuance of a his protest is based, otherwise, his protest shall be considered void
"Final Decision on a Disputed Assessment and without force and effect.
(FDDA)' (RMC 11-2104). Revenue
"duly authorized representative" refers to Service,
The term
eglonal Directors, Assistant Commissioner-Large Taxpayers
Enforcement and Advocacy Service (RR 18-
na Assistant Commissioner
2013, RMC 11-2014).

520 521
 Tax Remedics Tr Remcdis
in FLDIFAN
Cire.
Cir Several issues
to Revenue
Memorandum
ular No. 39-
pursuant tto the PAN ar rotes.
Accordingly, their
responses
If there are several issues involved in the FLD/FAN but the
submit/fle
the FLD/FAN
ation) to the FLDIFAN with the
dul
t a x p a yre
shall
ercso n s i d e r a t i o n / r e i n v e s t i g a t i o n )
tha av0aver only disputes or protests against the validity of some of the
2013, who signed
and icsUes raised, the assessment attributable to the undisputed issue or
(requests for of the
Commissioner
for_reconside
authorized
representative
requests
of ariSing from inactions on of issue shall become final, executory and demandable; and the taxpayer
Protest in theC onature Overse hall be required to pay the deficiency tax or taxes attributable thereto, in
shall be file
FLD/FAN. mmiSSIoner

taxpayers elevated
to the authorized
representatives"

hich case, a collection letter shall be issued to the taxpayer calling for
d e c i s i o n s of
the "duly navment of the said deficiency tax or taxes, inclusive of the applicable
Commissioner.

Office of the surcharge and/or interest.

taxpayer may be allored to
issuance of the PAN, tne
Prior to the and penalties
deficiency taxes and If there are several issues involved in the disputed assessment
payments
of probable
make voluntary and the taxpayer fails to state the facts, the applicable law, rules and
(RMC 11-2014). requlations, or jurisprudence in support of his protest against some of the
an FLD/FAN issued reiteratinn the
several issues on which the assessment is based, the same shall be
RMC 11-2014,
Likewise, under
and penalties previously mado in undisputed issue or issues, in which case, the assessment
immediate payment of
deficiency
to the PAN.
taxes
A final demand letterfo considered
of the response attributable thereto shall become final, executory and demandable: and
the PAN is a denial c o n s i d e r e d a decision on a
disnitad
payment of delinquent
taxes may be
vS. Isabela Cultural
the taxpayer shall be required to pay the deficiency tax or taxes
of Internal Revenue attributable thereto and a collection letter shall be issued to the taxpayer
assessment (Commissioner This includes a disputed
No. 135210; July 11, 2011). calling for payment of the said deficiency tax, inclusive of the applicable
Corporation; G.R. the opportunity to explain their side.
are given surcharge and/or interest.
PAN. So long as the parties complied with (Calma
the requirements of
due process are satisfactorily
G.R. No. 122787; February 9, 1999). Failure to File a Valid Protest
vs. Court of Appeals;

from filing/submission
A FDL/FAN issued beyond fifteen (15) days If the taxpayer fails to file a valid protest against the FLD/FAN
PAN shall be valid, provided, that, it is
of the taxpayer's response to the
internal revenue taxes. The within thity (30) days from date of receipt thereof, the assessment shall
become final, executory and demandable. No request for reconsideration
limitation to assess
issued within the period of
non-observance of the fifteen (15) day period,
however, shall constitute an or reinvestigation shall be granted on tax assessments that have already
officers who caused the delay
administrative infraction and the revenue become final, executory and demandable.
administrative sanctions as provided for by law and
shall be subject to
authorized
pertinent revenue issuances. Protest Denied by the Commissioner's duly
representative
Modes of Service (FLD/FAN) is denied, in
The notice (PAN/FLD/FAN/FDDA) shall first be served to ne Under the new regulation (RR 18-2013), if the protest
Commissioner's duly authorized representative,
taxpayer's registered address before the same may be served whole or in part, by the
the taxpayer may either:
taxpayer's known address, or in the alternative, may be served
taxpayer's registered address and known address simultaneouSly (N (CTA) within thirty (30)
11-2014). a) Appeal to the Court of Tax Appeals
the said decision; or
days from date of receipt of

523
522
 Tax Remedies Tax Remedic
for reconsiderat
ation to the It must be emphasized, however, that in case of inaction on
through request date assessn within the 180-day period, the
his protest from
(30) days n of the
Paver to either: (1) file a petition for review with the CTA option
protested
Elevate
b) within thirty r e i n v e s t i g a t i n c e i p t

Commissioner

est for reinvestigation shall be

reguest for within 30 days
the said
No
decision.
only issues aised in the
appeal andauth
er the expiration of the 180-day period; or (2) await the final decision of
allowed in inistrative
administrative dbs duly authorized representative
duly
Commissioner's
Commissioner or his duly authorized representative on the disputed
decision of the Commissioner.
ssessment and appeal such final decision to the CTA within 30 days
by the receipt of a copy of such decision, are mutually exclusive and the
aafter the
entertained
shall be

Upon by the
Commissioner's
duly auth.
rized resort to onebarsthe application ofthe other.
Protest Not Acted
Commissioner's dulv a u t h . Final Decision on a Disputed Assessment (FDDA)
not acted upon bythe
representative

is fromzed The decision of the Commissioner or his duly authorized

if the protest hundred eighty (180)
days counted
representative
within one
of the protest
in case ofof aa request representative shall state the:
t h e date of "filing a) facts, the applicable law, rules and regulations, or
reconsideration; or
of the jurisprudence on which such decision is based, otherwise, the
"submission" by the taxpayer quired
the date of from the date of filing of the decision shall be void, and
documents within sixty (60) days
a request for
reinvestigation, b) that the same is his final decision.
protest in case of

TAXPAYER MAY EITHER:

THE of the one CLAIM FOR REFUND (Sec. 229 and Sec. 112 ofthe Tax Code)
Appeal to the CTA
within thirty (30) days after the expiration
a)
hundred eighty (180)-day period;
or
Commissioner's duly authorized Tax refund cases are based on the civil law principle of 'solutio
decision of the
b) Await the final assessment. indebiti" (refers to the juridical relation which arises whenever a person
representative on the disputed
unduly delivers a thing through mistake to another who has no right to
Protest Denied by the Commissioner
demand it).
as the case may be, is
If the protest or administrative appeal, been
denied, in whole or in part, by the Commissioner, the taxpayer may appeal If ataxpayer believes that a national internal revenue tax has
to have been
to the CTA within thirty (30) days from date of receipt of
the said decision. erroneously or illegally collected, or of any penalty file a
executory and wrongfully collected, he or she must
Otherwise, the assessment shall become final, excessively or in any manner
of
demandable. A motion for reconsideration of the Commissioner's denial claim for refund with the BIR.
the protest or administrative appeal, as the case may be, shall not toll the
for Tax Refund under
thirty (30) day period to appeal to the CTA. Sections 229 and 112 are the two provisions
refund of tax erroneously or illegally
the Tax Code. Sec. 229 pertains to
vat in relation to zero-
Protest Not Acted Upon by the Commissioner COllected while Sec. 112 pertains to refund of input
If the protest or administrative appeal is not acted upon by E rated sale.
Commissioner within one hundred eighty (180) days counted from e
date of fling of the protest, the taxpayer may either:
ne
'appeal to the CTA within thirty (30) days from after m
expiration of the one hundred eighty (180)-day period, o sputed
await the final decision of
the Commissioner on the alsa
in
assessment and appeal such final decision to the CIA
tniry (30) days after the
receipt of a copy of such decisio
525
524
 ax Remedies
Erroneously or
llegally Colt 4. Eailureto use excess Tax Remedis
Sec. 229-NIRC: Recovery
of Tax
Collected taxes for the next taxableincome tax
year
credits against
quarterly income
Erroneously orlegally Collected.
SEC.229:Recovery of Tax
shall be maintained
in any court for the recou
ery of any Requisites for Tax Refund or credit
"No suit or proceeding 1. Claim must be
tax hereafter alleged
to have been erroneously or illega nation in
internal revenue
to have been collected without al assessed ed NOTE: Even without
writing.
of any penalty claimed
Sum alleged to have been excessively or in any manner wrongfully collected,rity, or of any
collected, or
may refund or credit
a written claim,
the BIR
for refund or credit has been duly Tiled with the Commissioner: but such until suit
a
dlaim any tax if Commissioner
which payment was the face of the
on
return
or
proceeding may be maintained, whether or not such tax,
penalty, sum has been
en papaid erroneously paid. (Sectionmade,
229,
it
appears clearly to upon have
under protest or duress. 2. It must be filed with
the
NIRC)
shal be filed after the expiration of hn
after the payment of the Commissioner within two (2)
"In any case, no such suit or proceeding 3. Show proof of
tax or
penalty. years
from the date of payment of the tax or penality regardless of anyy supervenit years payment.
Provided, however, Ihat the
supervening
Commissioner a cause that
may arise after payment: may

written claim therefor, refund or credit any tax, wnere on the tace of the return upon which
payment was made, such payment appears cleanly to have been erroneously paid" Commencement of the two (2) year period
After filing the
administrative claim for
SECTION 230, Forfeiture of Cash Refund and of Tax Credit. -
file judicial claim for refund, within 30 daysrefund,
a the taxpayer must
"A) Forfeiture of Refund. - A refund check or warrant issued in accordance with th
receipt of the denial by the Commissioner, from either (1) from the
Dertinent provisions of this Code, which shall remain unclaimed or uncashed within five Commissioner. or (2) inaction by the
(5) years from the date the said warant or check was mailed or delivered, shal h
forfeited in favor of the Govermment and the amount thereof shal revert to the general
fund. Sec. 112-NIRC: Refund or Tax Credit of Input Vat on 0%-rated sale
B) Forfeiture of Tax Credit. A tax credit certificate issued in accordance with the
pertinent provisions of this Code, which shall remain unutilized after five (5) years from
Under the Tax Code, as amended,
rated sale may be recovered input vat attributable to zero
the date of issue, shall, unless revalidated, be considered invalid, and shall not be
the vat registered taxpayer):
through any of the following (at the option of
allowed as payment for internal revenue tax liabilities of the
taxpayer, and the amount 1. Carried-over to
covered by the certificate shall revert to the general fund. succeeding months or quarters;
2. Applied for tax credit certificate;
GROUNDS FOR FILING A CLAIM for tax refund or tax credit: 3. Applied for tax refund;
1. The tax has been
erroneously or illegally assessed or collected. The
term 'erroneous or illegal Section 112 of the tax code applies to refund
It also include
tax is one levied without statutory authority. pertaining to excess or unused
penalty collected without authority. input tax. In the case of "Visayas Geothermal Power Companyv.
legally collected tax there is a violation of certain provisionso Commissioner of Internal Revenue", dated June 4 2014 (G.R. No. 197525),
law or statute. the sc outlined the rules with
regard to claims for refund or tax credit of
Eroneously collected tax - there unutilized creditable input VAT.
is a law but there is a mistake
collection. 1. When to file an administrative claim with the CIR
2. The tax has been
3. The tax was excessively or in any manner wrongly collected. of
paid by mistake (solutio General rule within 2 years from the close of the taxable
solutio indebiti, the indebiti). Under the principle quarter when the sales were made
government
erroneous payment of taxes. has to restore the sums
rep
esenting

526 527
 las Rmede
with the CTA:
2 When to file a joalclaim us Remedes
Shall be effected
lenial by
Within 30 days from the full or partial denial of
of the
the
administr ative ossession or controirequning
pos
the property distrained of such
the
taxDayer or any
claim by the CIR; or
by the CIR - within 30 and propert t
intact and unaltered and otligate nimsetfsign
person having
a
recept covening
In case of inaction
days
CIR to from not to to
oreserve the same
expiration of the 90-day perioa provided to the th
ecide on
whatever without the express disorse of te same r
the ciaim as providedfor under the IRAIN Law (120. authorty of the any manner
the effectivity of RA 10963
TRAIN Law). Commissicner
ACTUAL DISTRAINT
with the mandaton
The Court upheld that non-compliance datory pernod of
30 days is fatal to its refund claim on the ground of Actual distraint is resorted to
upon the failure
Thus, the taxpayer's recourse in case of full or partial den don delinquent tax or delinquent revenue to pay the
of the cerson
owng any
claim by the CIR or in case of inaction by the CIR is to annhe Itconsists of the Seizure of the personal same at the tme
the CTA. Failure to appeal within the 30 day period will rende with to such property in sufticient propety anc interest requred
or ngntsn
decision finai and unappealable. the with any increment thereto quantity to
satisty the tax or
incident to crarge together
the distraint and the cost of the deinquency and he expenses of
subsequent sale

REMEDIES OF THE GOVERNMENT Procedures for Distraint

Distraint 1) Stocks and other securities shall be

warrant of distraint upon the distra1ned by sering a cocy of the
A remedy available to the government whereby the collection taxpayer and
manager, treasurer or other responsibie officer pon the president
of the of the corporation
tax is enforced on the goods, chattels or effects of the taxpayer company or association which issued the stocks
including
other personal property of whatever character as well as stocks and
other 2) Debts and credits shall be distrained
by leaving with the person
securities. debts. credits, bank accounts, and interest in and
rights to the debts or having in his owing
Dersonal property The property may be offered in a public sale, if taxes or with
possession or under his controi
such credits
his agent, a copy of the warrant of
distrant.
are not voluntarily paid. Distraint
may be actual or constructive. 3) Bank accounts shall be
garnished by serving a warrant of garnisnment
upon the taxpayer and upon the
cONSTRUCTIVE DISTRAINT other responsible officer of the bank president, manager treasurer or
The Commissioner of Internal Revenue, to
of the safeguard the interest Difference between actual and costructve distraint
government, may place under constructive distraint the property o
a delinquent taxpayer or any taxpayer who, in his Procedure. In constructve distraint he BiR does not take he
opinion is of the
pnysacali possessxon
personal property while in actal cistainthe personai property s pnyscaly
1. Retring from business subject to the tax taken.
Intending to leave the Philippines or to remove his propey
therefrom or to hide or conceal his
Basis. In constructve distrant there s no fnding yet of discrepancy. onyhat he
3itending to perform any act property apayer is leaving the county or disposng of his property nirautofreditors or sn
proceedings for collecting the tax due or which obstruct
tending to he process of kquidaton while in actuai distraint, te taxpayer s areacy delinquet
from him. may De
nhe payment of his taxes.

Dispasiton ofthe personal propery. n aonstructve distraint, he personal property

Smerely heki as security o answer for any future tax delinquences while in actual
528
529
 Tay Remedics
distraint, the personal property
is sold
be sokd
taken to be in order to
to
satsfy the Levy la Remedics
delinquencies. Levy refers to the
seizure of
constucive distraint he pupose is to r
and interest in or
rights to such real properties
from properties
Purpose. In atisfaction of taxes due
that here are properties of the o on o for the
govemment revenues and ensure
taxpayer. The the Distraint and
could proceed against after a
detemminaton of he amount of deficiencv t t that property
leif after the seizure, may be offered indelinquent
a Levy are summary
in actual distraint, the deficiency
taxes are already detemined the taxes public in
nature
voluntarily paid. It can be made
are not and
simultaneously or after the before, either may be
Difference between distraint, levy and gamishment. distraint of
property. personal pursued at the
Distraint refers to the seizure of personal property, tangible or intanoible Levy is effected by
writing upon a certificate discretion of the
govemment to effect colection of taxes incdluding penalties. Levy of real o d he
orepared by the Commissioner authorities
to the seizure of real property of the taxpayer by the govemment in order to e n f Aithorized representative shoWing theorname his duly
charged with the
taxpayer and of the
payment of taves. Gamishment is the taking or personal propertes, usualy cash the amounts of
the tax collection of tax
due from him, a description of the and penalty
sums of money.owned by a delinquent taxpayer whch is in the possession
fa tird which the levy is made and property upon independently or
party.
Register of Deeds of the city orgiving notice to the Simultaneously
province where the
Diference between compromise and abatement property is located and upon the
taxpayer.
Compromise is a contract whereby the paries involved, by reciprocal
conoessions, avoid litigation or put an end to one already commenced. It invohes Forfeiture
reducion of the taxpayers liability, while abatement involves the cancellation of the entre Forfeiture is the divestiture of
tax liability of a taxpayer. consequence of a default or
property without compensation, in
offense.
removal of fixtures of any sort shall be The forfeiture of chattels and
or destruction of the
enforced by the seizure and
As to the grounds: specific forfeited property. The forfeiture of sale,
real
property shall be enforced by a
legal action or proceeding, civil orjudgment
of condemnation and sale in a
Commissioner may compromise payment of intemal revenue taxes whena criminal, as the case may be.
reasonable doubt as tot he validity of the daim
against the taxpayer exists; or the
financial positdon of the taxpayer demonstrates a dear
inability to pay the assessed tax. Enforcement of Tax Lien
Commisioner may Abate or Cancel a Tax Liability, when the tax or A tax lien is a
any portion thereof legal claim or charge on property, whether real or
appears to be unjusty or excessively assessed; or the administration and colection personal, established by law as a source of security for the payment of tax
ts involved do Obligations. It is more extensive in scope and is superior
notjustily the colection of the amount due. to all other
claims or preferences.

In seizure for the enforcement of tax

lien, the residue, after deducting
ne tax
liability and expenses, will go to the taxpayer. In forfeiture, all the
proceeds of the sale will go to the coffers of the government.

ompromise
2002)
(Rev. Reg. No. 7-2001 as amended by Rev. Reg. No. 30-

530
531
 Tar Periain
BE
COMPROMISE wthhoiding 2 ases unless the applicant axpayer invones
W H C M
wisions 2n a a i out on he zspavers
CES
nQuert accoun

protesi
aner issuarre
e ina withhroic
obligation to
administrative hich
whic are still pensr
Cases under the
taxpayer 2. 2 rau. ase. tonfirme s uch by the ommissioner of
notice istric
internal e v e s fis 3uy authorizec represertative
Revenue eEnforcement ewre arc othe
assessmet
Revenue

Oices Enfor
Regiona ollection
Senvice.
Crimine wolatrr alree ie r cou
ervice.
Taxpayer ioe T Delinguer a c s wt 3y approve schedule of insallmer
courts(UTC
the Nationa
oioes m
disputed betore the paymen

wi axases deing Cases where ina renrs d reinvestigation or reconsiderations have

filed in
courts been issue sutng T 0 I n he onig1nal assessment and the
already file
n ur
cases
ilectio those
violatons
othE than tasceyer s aeeate n s ecision signing the require
riminai
traud r i r he urpose:
criminal ter tices bur x y e
rotices
tarte
not agreemet
nvoiving
y
pre-assessment

Caseshi s o m e tnal a n executory after inal judgment of a

covered
ofce as n f i r m e c h e
Cases evew
agreeable e the fndings of the audt our wher Iy se s reauestec on he ground of doubtful
vaidty h e assSmer anc
office the ground of
7. Estate 2 a s e where mise is reauested on

intemal revenue tas wher firarcial raprthe zsayer

any
The Commissioner may compromise
to the validty
"reasonable doubt as Minimum amounts fo ompromse Settlement
taxpayer exSS rate of
of the claim against
the For a S tfinancal irrapacity a minimum compromise
or
compromise 10% e basic assessec tas
of the taxpayer (extrajudicial settlement o equivalent to 40% of
The financial position For oier cass a minimum compromise rate
demonstrates a "clear inabilty o pay the axpayers riminal the tasic assessed 2s
the assessed tas liability) s consensual in
tas nature.rence, may not
Te folowing shall be consideredna be imposed on the
Compromise versus Abatement
compromise agreement A Compomise is a contract whereby the carties. by
reciprocal
have a tar
T h e taxpayer must taxpayer Without concessions, avod a itigation or to put an end to one already
consent. The BP may commenced. t involves reduction of a taxpayer s liability.
n the other
Trere must e an offer oy the only suggest settlement
of
when the tar appears to be unjust or
nand,abatement is authorized
taxpayer or Commissioner of the taxpayers liability
an amunt o be paid by the excessive.
through a compromise
axpayer Civil Action. It is resorted to when
Trere must se accepance by file administrative
and the taxpayer fails to
an
1. A tax is assessed
the Commissioner or taspayer for reconsideration or reinvestigation
protest by filing a request
he case may be. of the offer within 30 days from receipt of the
assessment;
in settlemert f the original but the
the assessment is filed by the taxpayer
2. A protest against
whole or in part the
caim. said
in
Commissioner's decision denying 30
within
to the Court of Tax Appeals
protest, was not appealed
such decision.
days from receipt of

533
532
 Tax Renedies
shall
No civil action for the
approval of the
recovery
Commissioner.
of taxes shall be file
filed
without tha
the
2.
Forfeiture of tax credit Tax Remedis
unutilized a tax credit
-

after
date ofcertificate which remains
5
unless revalidated,years from
and shall issue, shall be
Criminal Action
internal revenue be not invalid
collection of taye. amount covered bytaxes labilities of allowed
the
as
payment for
Criminal action is resorted to,
not only for fund the certificate taxpayer, and the
of all sorts. The judam also shall revert to the
for enforcement of statutory penalties n the general
impose the penalty but shall als
criminal case shall not only Revalidation period of TCCs
of the criminal case. The criminer the
payment of the taxes subject
debtor
iminal liability
to satisty his civil obligation to.
A TCC may be revalidated prior
arises upon failure of the to pay tax. to the
satisfaction of a tax liability will not operate period. expiration of its
validity
Hence, the subsequent to The revalidated TCC shall be valid
extinguish the riminal liability. date of issue. for a
period of 5 years from the
The criminal complaint may proceed even without prior assessme
stressed that a criminal comniaor
computation of the tax. It must be
instituted not to demand payment but to penalize the taxpayer for violation
iola
of the Tax Code.

No Injunction to Restrain Tax Collection

No court shall have the authority to grant an injunction to restrain the
collection of any internal revenue tax, fee or charged imposed by the
NIRC, except when the decision of the Commissioner is pending appeal
before the Court of Tax Appeals, the said court may enjoin the collection
of taxes if such collection will jeopardize the interest of the govermment
and/or the taxpayer.

TAX CREDIT CERTIFICATE (TCC)

1. May be applied against any internal revenue tax except

withholding taxes,
2. Original copy is surrendered to the revenue office,
3. No tax refund shal be given resulting from availment of incentives
granted by law where no actual payment was made.

Forfeiture of tax refund/tax credit

1. Forfeiture of refund in favor of the
check or. warrant
government when a rerun
remains. unclaimed or uncashed wiu
years from date of mailing or delivery.

535
534
 CHAPTER EXERCISES

upler t,verises Tat Rmcdies

letter of the correct ansue
Ner. same amount claimed
the
Choose
against
M U L T I L P L E CHOICE.

is the process
of examining, gOing over,
to
or s

ascertain the correctneg

ascerta scrutinizing d.
the taxable
quarter quarters ofthetheestimated tax liabilities
None of the above
or
for
1
the books and
records of
xpayer
the taxpayer
of succeeding taxable year.
by the taxpayer.
declared and paid b. tax assessment
the tax assessment
notice which of the following statements is
a. preliminary d. tax audit a. If the taxpayer to be correct?
C. letter of
authority audited is under
National Office, the letter of the
jurisdiction of the
action of an
officer authorized by lawv in asce
ascertaining Regional Director. authority shall be issued
by a
2. It is the official law from a taxpayer, b. If the taxpayer to be audited is
of tax due under the under the
the amount
regional offices, the letter of authority jurisdiction of the
preliminary
assessment notice b. tax assessment Commissioner of Internal Revenue. shall be issued by the
a. d. tax audit C. Both "a" and "b"
C. letter of authority
d. Neither "a" nor "b"
a Revenue Officer to eu.

document that empowers

It is an official
books of accounts and other aco
3.
and scrutinize a taxpayer's
7 The prescriptive period
for the issuance of
a formal notice of
determine the taxpayer's correct internal r enue assessment may not ordinarily
be stayed because of
records, in order to the lifeblood
tax liabilities. theory. However, there are certain instances where the
running of the
a. preliminary assessment b. tax assessment prescriptive
period may be suspended. Which among the following is
not among the recognized exceptions which
notice
d. tax audit
suspend the prescriptive
C. letter of authority period within which to assess?
a. Where the taxpayer requests for and is
granted a
him of the findings of reinvestigation by the Commissioner;
4. It is a written notice given to a taxpayer informing
deficiency in his tax return, indicating b. If the taxpayer is out of the country:
the BIR officer(s) relating to a
therein the law and the facts on which the assessment is made and C. If the taxpayer changes his address informing the
requiring the taxpayer to respond within a given period, otherwise, the Commissioner of such change
Commissioner or his duly authorized representative shall issue an d. When the Commissioner of Internal Revenue is prevented
assessment based on his findings. from making an assessment and within 60 days thereafter.
a. preliminary assessment notice b. tax assessment
c. letter of authority d. tax audit 8. Which of the statements regarding collection of tax assessment is
incorrect?
5. Preliminary assessment notice is not required in the following, except a. Within five (5) years from assessment
a. When the finding for any deficiency tax is the result or b. Within ten (10) years in case there is no assessment and in
case of false or fraudulent returns with intent to
evade the tax.
mathematical error in the computation of the tax appearing on
the face of the tax return filed by the taxpayer. b. Both I and II
a. I only
b. When a discrepancy has been determined between the tax d. Neither I nor l
C. Il only
withheld and the amount actually remitted by the withholaing
for violation of
agent. 9. Which of the following rules governs the prescription
C.When a taxpayer who opted to claim a refund or tax credt o the Tax Code? and if the
the day the law is violated
excess creditable withholding tax for a taxable period sthe
defermined to have carried over and automatically
7 Rule: Prescription starts from starts from the discovery
of violation
is not known, prescription
appuc Same
thereof.

537
536
 Chapter &ercises - a Remedies Chupter cercises Vax Renedie
a:le filed his 2015 Income Tax Return and paid the tax
of the Tax Code all
shall 15. due thereon
provision prescribe or April 1, 2016. The last day for the Bureau of Internal
Revenue to
of any
violations
send a n a s s e s s m e n t is
2nd Rule: All
after 10 yrs. a. April 1, 2019 C. April 15, 2019
correct 2021
rules are
correct
b. April 15, d. April 15, 2026
a. Both rule
rule wrong, 2
b. 1 rules are wrong
C. both correct, 2 rule wrong T h e following are related to tax assessment of a taxpayer:
d. 1 rule filed byate
Date when assessment was received Oct. 1, 2014
A tax return,
statement or declaration
three (3) veare
payer Petition for reconsideration was filed with the BIR Oct. 9, 2014
10. Statement 1: changed
or
amended
within
BIR decision of denial was received July 2, 2015
modified,
may be 2nd Request for reconsideration was filed with the July 15,
date of filing.
BIR 2015
o r investigation of tax
reti..

letter of authority Date revised assessment was received July 5, 2016

Statement 2: When a
served upon the tayna
declaration has been actually
statement or
shall no longer
be allowed.
amendment of such return The last day to appeal to the Court of Tax Appeals is on
a. July 15, 2016 b. August 4, 2016
1 & 2 are false August 6, 2016 d. September 5, 2016
a.
Statements
but s t a t e m e n t 2 is
false C.
b. Statement 1 is true
but s t a t e m e n t 2 is true
Statement 1 is false
C.
true 15. Assume the following information
Statements 1 and 2 a r e
June 10, 2015
d. Date of tax erroneously paid
Date of claim for refund was filed with BIR March 3, 2016
statements is incorrect?
11. Which of the following Date of BIR decision of denial was received April 5, 2016
three (3) years c o m m e n c e s to run
a. The prescriptive period of Last day to appeal to the Court of Tax Appealis on
after the date the return is due (last day prescribed by law for
a. June 8, 2016 b. March 3, 2017
c o m e s later.
filing) or filed, whichever c. June 10, 2016 d. May 5, 2016
b. If the return is filed before the last day for filing, the
prescriptive period begins to run only from such last day.
C. If the return is filed after the last day or due date,
the period 16. A taxpayer filed an income tax return for the calendar year 2014 on
shall be counted from the day the return is filed. March 10, 2015. The BIR issued a deficiency income tax on April 10,
collect?
d. If the return was amended substantially, the period starts from 2016 which has become final. When is the last day for BIR to
a. April 10, 2021 b. April 15, 2020
the due date of the return.
C. April 15, 2018 d. March 10, 2018
12. Which of the following prescriptive period for the B.I.R. to conduct a
notice on January 5, 2015. He
tax audit is correct? L/, an assessment
A taxpayer receives January 15, 2015.
a motion for reconsideration with the
a. Ten (10) years when no return is filed BIR on

b. Ten (10) years when return filed is false or

Tiles for the submission of complete
documents to
fraudulent When is the last day

C.hree (3)if years from actual filing of return or from the deadine Support his motion for reconsideration?
for filing the return filed is not a. February 4, 2015 C. January 15, 2017
fraudulent.
d. All of the above b. March 16, 2015 d. None of the above

538 539
 Chapler erises - lax Remedica hapter txercises
corporate
of a calendar year income
taxpavo
's records 23. Based on the number Tat Remcdics
18. An examination
shows that it filed its final adjustment tax return on
It subsequently filed an am
ebr ar nrotest, the last day tor21,theassuming that the BIR did
2011 income. ended retum Appeals is taxpayer to appeal to the not act on the
14, 2012 for its hat has the BIR Court of Tax
2012. Up to what date WItnin
date
on March 17,
which to a. March 22, 2014
assessment notice and a
letter of demand? ssue b. March 24, 2015
C. March 23, 2014
a formal C. April 15, 2015 d.
a. February 15, 2015 April 15, 2016
d. March 18, 2022
b. March 18, 2015 Usethe following data for the next
tncome tax return tor 2011 was filedthree (6) questions:
Income Tax Return (ITR)
for taxable vear 2 Tax shown on the return was P 6,000April 2, 2012.
19. Apolinario filed his On which was paid
it was discovered that th
investigation, Tax upon audit was P upon fling.
May 2, 2014. After an paid 10,000.
was deficient. The
last day for the BIR to send an assessman. Assessment for deficiency: April 12, 2014.
a. April 15, 2017 C. May 2, 2016
d. April 15, 2016 Last day send notice of assessment
to
b. May 2, 2017 24. is -

a. April 2, 2015 C. April 15, 2014

20. Ana filed her 2013 Income Tax Return (1TR)

on April 10, 2014. On b. April 15, 2015 d. April 12, 2017
June 20, 2014, she filed an amended return which is substantiallv
different from the original return. The last day to release, mail orsend 25. If no assessment was made, the
last day for the
an assessment is- collect by judicial proceedings is- government to
a. April 10, 2017 C. June 20, 2017 a. April 2, 2015 C. April 15, 2015
b. April 15, 2017 d. June 20, 2019 b. April 15, 2014 d. April 12, 2015

21. A taxpayer disclosed to you the following information: 26. When is the last day for the government to issue warrant of
Date of filing the Income Tax Return: Mar. 28, 2012 distraint?
Date assessment was received: June 20, 2014 a. April 12, 2017 C. April 15, 2015
Request for reinvestigation was filed: July 4, 2014 b. April 12, 2019 d. April 15, 2019
assessment
27.If of the or judicial action was made on April 20, 2015, the
The last day for the taxpayer to submit relevant supporting documents defense taxpayer is
is a. He had paid the tax on time.
a. September 4, 2014. b. He had paid the correct amount of tax.
b. July 20, 2014 q. The right of the government to collect had already prescribed.
C. September 2, 2014 d. There was no cause of action from the very beginning
d. April 15, 2015
had
28. If the BIR discovered on December 1, 2013 that the taxpayer
send assessment is
22. In question number 21, assuming that the taxpayer submitted the filed a fraudulent return, the last day to an

C. December 1, 2023
documents supporting his motion on August 26,2014.The Bureau of a. April 15, 2014
Internal Revenue should act on the b. December 1, 2016 d. April 2, 2021
protest not later than
a. September 26, 2014 November 1, 2013 that no return
b. April 15, 2015 29 Suppose the BIR discovered on
an assessment
until
make
C.
February 26, 2014 was filed. The BIR can validly
d. November 1, 2016
February 22, 2015 a. April 15, 2014 C.

b. November 1, 2023 d. April 2, 2021

541
540
 Chapter Eearcises Tae edies Chapler zercises lag Remcdies
C. Entering into compromise of tax cases

1,
d. Enforcement of forfeiture
of property
January
return for a donation madeto
on
assess is 2010 was
30.
Donor's tax
2010. Last day
for BIR
37 The
7 following are administrative remedies available to a taxpayer in
filed on January
31, February 14, 2013 connection with collection of taxes, except one
C.
2013
a. February 28, d. January 15, 2013 a. Filing of claim for tax refund or credit
31, 2013
b. January b. Filing of petition for reconsideration or
the return filed was fraud..l. reinvestigation
30, but assume
last day for BIR to
and c. Filing of criminal complaint against erring BIR officials or
Based on no. The
31 March 31,
2010. sess is employees
discovered on
was
d. Entering into a compromise
on?
2020 c. February 14, 20020
a. February 28, d. March 31, 2020
2020 38. Which of the following is incorrect?
b. January 31,
.ln a. A tax assessment is necessary to a criminal prosecution for
Date the estate tax was filed: 10,
March 2, 2012; willful attempt to defeat and evade payment of taxes.
32. Date of death: Internal Revenue to make
the Bureau of an A conviction for tax evation is not a bar for collection of unpaid
2012; Last day for estate taX
.
a s s e s s m e n t for a deficiency taxes
C. April 15,
2015
a. March 2,
2015 c. Criminal proceedings under the Tax Code is now a mode of
b. April 10, 2015 d. September 2, 2015 collection of Internal Revenue taxes, fees and charges.
d. If the taxpayer is acquitted, it does not exonerate him for his
amended return is
33. The last day to file an
civil liability to pay the taxes.
a. March 2, 2015 c. April 15, 2015
b. June 10, 2015 d. September 2, 2015
39. Statement 1: A tax amnesty that forgives tax delinquency of prior
tax in installments, the years is a legislative act of the government.
34. When a taxpayer erroneously paid a
Statement 2: A tax compromisè that lowers the delinquent tax due
for claim for refund should be counted from the:
prescriptive period a
from a taxpayer is an executive act pursuant to a legislative grant of
a. Date of payment of the first installment.
b. Date of payment of the last installment. power to the Executive Department of the government.
a. Statements 1 & 2 are false
c. Last day required by law for the payment of the tax in
lump sum.
one b. Statement 1 is true but statement 2 is false
d. None of the choices C. Statement 1 is false but statement 2 is true
d. Statements 1 and 2 are true
35. The prescription of check or warrant refund or tax credit shall be
within: 40. Statement 1: The Commissioner of the Internal Revenue has the sole
a. 4 years from the date of issue
authority to abate or cancel tax, penalties, an/or interest.
b. 5 years from the date of issue Statement 2: The application for abatement or cancellation of tax,
C. 10 years from the
penalties, and/or interest should be acted upon by the processing
d. 12 years from the date
of issue
date of issue from of said office, and the BIR
receipt
office within five (5) days on the case.
National Office has thirty (30) days within which to act
36. The following remedies are available a. Statements 1 & 2 are false
taxes, except
to the government to collect b. Statement 1 is true but statement 2 is false
a. Distraint and levy C. Statement 1 is false but statement 2 is true
b. Inquiring into bank deposit accounts d. Statements 1 and 2 are true
of taxpayers
542 543
 Chapter ercises Tay Remcdies Chapter cercises
Revenue cannot:
45. Statement 1:
those
Criminal violation of
already filed NIRC
IRC may be
in court.
Tae Remedics
of Internal
41. The Commissioner

Abate or cancel tax liability.

Ctafement 2: Criminal compromised eve
those involving fraud. violation of NIRC
a. even
of internal revenue taxes. .
b. Compromise payment may be
C. Credit orrefund taxes erroneously or illegally collecte a.
Statements 1& 2 are false compromised except
d. Compromise criminal aspect of tax viol ns if
already filed
b.
Statement 1 is true but statement
court
C.
Statement 1 is talse but 2 is false
d. statement 2 is true
Statements 1 and 2 are true
not be compromised?
42. Which of the following may
a. Delinquent accounts AGWhich of the following violations
b. Cases under administrative protest after issuance of tha penalties? cannot be subjected to
Assessment to the taxpayer still pending in thet
a. Failure to compromise
Notice
C.
of
Civil cases being disputed.
BIR. records
keep/preserve books of accounts and
d . Withholding tax cases where there is no doubt on the b. Failure to keep books of accounting
taxpayer's obligation to withhold. language or in English. accounts of records in a native
C. Failure to have books of
accounts audited and have
43. Compromise may be entered into based on the following ground: statements attached to income tax return certified financial
ground: Doubtful validity of the assessment.
1 independent CPA. by
d. Keeping two sets of books of accounts or
ground: Financial incapacity
2 records.
a. Both grounds are correct.
b. Both grounds are incorrect. 47. Which of the following offer to
ground of reasonable doubtcompromise
a disputed
C. Only the first ground is correct. the as to the
assessment on
may be accepted? validity of the assessment
d. Only the second ground is correct.
Jeopardy assessment
I. Arbitrary assessment based on presumption
44. Which of the following offer to compromise a delinquent account shall
. Assessment issued on or after January 1, 1998 where
be accepted on the ground of reasonable doubt as to the validity of
the assessment? demand notice allegedly failed to comply with formalities
prescribed in the tax code
The taxpayer failed to file an administrative protest on account a. I, Il, and llI
of the alleged failure to receive notice of assessment. b. Iand Il only
C. Iand ll
The taxpayer failed to file a request for reinvestigation or only d. None of the above
reconsideration within 30 days from receipt of final
48.
assessment notice. A tax assessment made by an Authorized Revenue Officer without the
benefit of complete or partial audit, in light of the RO's belief that the
The taxpayer failed to elevate to the Court of Tax Appeals assessment and collection of a deficiency tax will be jeopardized by
an adverse decision of the Commissioner of Internal
CTA)
Revenue. delay caused by the taxpayer's failure to comply with audit and
a. 1, ll, and lll b. Iand ll only
investigation requirements to present his books of accounts and/or
C. land pertinent records, or substantiate all or any of the deductions,
Ill only d. Ionly
exemptions, or credits claimed in his return.
a. Jeopardy assessment
b. Arbitrary assessment based on presumption

545
544
 Chapter &eerses-l emedies
C. Arbitrary assessment issued on orafter January 1, 1998
where demand notice allegedly Talled
to comply with
53. Which of the
Chapter
following cases falls within
cises
Tax Remcdies
formalities prescribed
in the tax code. Tax Appeals? the
d. Assessment made based on Best Obtainable Rule a.
Criminal action for violation of jurisdiction of the Court of
Code. the
49. What is the prescribed minimum percentage of compromise
b.
Question of whether or not to National Internal Revenue
doubtful validity of the assessment? assessment upon a taxpayer. impose a deficiency tax
a. 40% of the basic tax
assessed b. 20% the basic C.
Appeal from undisputed
C. 30% of the basic tax
assessed d. 10% of the basic tax assessed
tax asse d.
Action for refund of real tax
assessment.
Ssed E4. The books of acCounts
must be
property tax.
50. Statement 1: No credit or refund of thetaxes or penalties shal be A.Any language kept in
allowed unless the taxpayer files in writing with the CommissioOner b. depending on the
English language preference of the taxpayer
after
(2) years a
Native only
claim for credit or refund within
two the payment of the C.
language or English
tax or penaity.
Statement 2: A returnfiled
d. Native language, English or only
Spanish
showing an overpayment shall be
considered as a written claim for credit refund. 55. The seizure by the
a. Statements 1& 2 are false government of personal property to
pavment of taxes followed enforce
voluntarily paid is called: by public sale, if taxes were not
a
b. Statement 1 is true but statement 2 is false
C. Statement 1 is false but statement 2 is true a. Distraint
d. Statements 1 and 2 are true C. Levy b. Forfeiture
d. None of the above
51. Statement 1: Internal revenue taxes shall be assessed 56. Which of the
within three following cases falls within the
(3) years after the due date. Tax Appeals? jurisdiction of the Court of
Statement 2: Internal revenue taxes shall be assessed within three a. Criminal action for violation of the NIRC
(3) years from the day the return was filed, where a return was filed b. Question of
beyond the due date. whether or not to
assessment upon a taxpayer impose a
deficiency tax
a. Statements 1 & 2 are false
b. Statement 1 is true but statement 2 is false
C. Appeal from undisputed tax assessment
d. Action for refund of réal
C. Statement 1 is false but statement
2 is true property tax.
d. Statements 1 and 2 are true 57. The distinction between
actual distraint and constructive
that: distraint is
52. What constitutes
prima facie evidence ofa false or fraudulent return? a. Actual distraint may be made on the
a. A substantial under declaration of taxable property of any taxpayer
whether delinquent or not while constructive
sales, income or distraint is
receipts as determined by the BR commissioner. on the property only of a
made
b. Failure to report sales in an b.
delinquent taxpayer
In actual distraint, there is a
amount exceeding 30% of that taking of possession, while in
declared per tax return
constitutes substantial under constructive distraint, the taxpayer is merely prohibited from
declaration of sales. disposing of the property
C. A claim of
deduction in an amount exceeding 30% of C. Actual distaint is affected by requiring the
deduction constitutes actua taxpayer to signa
d. All of the above. overstatement of deductions. receipt of the property or by the revenue officer preparing and
leaving list of the distrained property or by service of a
warrant of distraint or garnishment
d. Answer not given.
546
547
 Chapter &ercises Tae Ren.
Remedies Chapter tercises - Tax
58. Where any national
internal revenue tax
collected the
IS alleged to have

taxpayer should first

been 62. Alhich of the
a.
following
To inquire into bank
is
within the
authority of the BIR
Remedies
erroneously or illegally deposit
a. File a claim
for refund or credit
b. To terminate taxable accounts
period
Commissioner
action for refund with the Regional Trial Co CTo prescribedreal
b. File an
for refund with the
Court of Tax ApDealn
d. All of the above property values
C. File an action
d. Answer not given.
63, Following are the powers of the BIR
correct? In case of a tax erroneously collee a. To make assessment and Commissioner, except:
59. Which statement is
may be 1led witn the court simultan
cted for tax prescribe additional
a. A case for
refund
for refund with the Bureau of lusly
administration and enforcement;
To obtain information
requirements
with the filing of a claim b.
and to summon,
Revenue testimony of persons; examine and take
be filed with the cOurt even without ft To register and accredit
b. A case of refund may Filing C.
tax agents;
with the Bureau of Internal Revenue d. To
a claim for refund
c. A claim for refund must first be filed with the Bureau of ternal
promulgate tax laws.
Revenue and a decision of the Bureau must, under 64. The authority of the
circumstance, be awaited before a case for refund mayany Secretary
Finance,of in
conjunction
be Commissioner of Internal Revenue, except: with the
filed with the court
filed with the Bureau of Internal
a. To promulgate
all needed rules and
regulations for the effective
d. A claim for refund must first be enforcement of internal revenue laws cannot be controverted.
Revenue, in a given situation, a case for refund may be filed b. To issue rules and
with the court without awaiting the decision of the Bureau.
regulations, as well as administrative opinions
and rulings deserve respect by the court.
C. Both a and b
are administrative remedies available to a tax payer in d. Neither a or b
60. The following
connection with collection of taxes, except one:
a. Filing for tax refund or credit. 65. Statement- The BIR is authorized to issue a
b. Filing a petition for reconsideration or reinvestigation.
warrant of assessment
against bank account of a taxpayer for the collection of an garnishment
C. of criminal complaint against erring BIR officials or
Filing despite the pendency of protest against tax assessment.
Statement l-
employees. An assessmentis
not necessary before a taxpayer may
be prosecuted for wilfully attempting in any manner to
d. Entering into a compromise.
evade or defeat any tax imposed by the NIRC.
61. Pre-assessment notice shall not be required except: Statements l and ll are false.
a. When the finding for any deficiency, tax is the
result of b. Statements I and ll are true.
mathematical error. C. Only statement I is false.
b. When the finding of discrepancy has been determined d. Only statement I is true.
between the tax withheld and the amount actually remitted uy BIR may be
the withholding agent. 66. In one of the following conditions, the Commissioner of
not een authorized to abate or cancel a tax liability:
C.
When the excise tax due on imported articles has a The administration and collection
costs involved do not justify
the
paid.
d. When the value added tax due collection of the amount due.
on impoted articles nao the validity of the claim against
been paid. b. A reasonable doubt exists as to
the taxpayer.

548 549
 Chaster &yercises Ta
-

of the taxpayer demonstr

Remedies apter lzercises
c. The financial position
the assessed tax. clear Statement
70. 1:
AUdder or manuracturer Tax Remedidieso
inability to pay the Bureau of Internal Revenue must
d. All of the above accounting period; within thirty submit an inventory list to
days after the close of
statements is The Burea
true? The Bureau of
Statement 2: The Commissioner of Internal his
67. Which of the followingCommissioner method
Revenue shall have a
and Internal the of
inventory valuation of a Revenue may
1 deputy
commissioner once only every three
years. taxpayer, but he canprescribe
a.
a. Both du this
b. 4 deputy
commissioners statements are correct;
b. Both statements
First statement is are wrong'
commissioner
C. 3 deputy
commissioner C.
First statement is correct, but second statement is
d. 10 deputy
d.
wrong, but wrong:
second statement is
authorities of the Commissioner
68. The following are the sioner to reduce 71. Which of the
correct.
revenue taxes, except: following violations cannot be
a. Compromise the payment of any internal revenue tax penalties? subjected to compromise
when:
reasonable doubt as to the validity of claim against
a. Failure to
the records
keep/preserve books of accounts and
taxpayer exists. accounting
of the b. Failure to keep books of
b. Compromise the payment internal revenue when the
language or in English.
accounts of records in a native
financial condition of the taxpayer demonstrates a clear abilih
to pay assessed tax. c. Failure to
have books of accounts
statements attached audited and have financial
C. Abate tax liability when a portion thereof appears to he to income tax return
independent CPA. certified by
unjustly or excessively assessed.
d. Credit or refund taxes erroneously or illegally received d. Keeping two sets of
or
books of accounts or records.
penalties imposed without authority.
72. Books of accounts to be used
by a
taxpayer for his existing business
69. Statement1: The Commissioner of lnternal Revenue must first be approved by the
may, at any BIR, when?
time, order inventory taking of goods of any taxpayer in order to
determine his internal revenue tax liability; a. Before the end of
taxable year.
Statement 2: The Commissioner of Internal b. 10 days before the start of the last quarter.
Revenue, after C. On the 15"
comparison with other taxpayers in similar business, may prescribe a day of the 4 month following the close of the
minimum amount of gross receipts, sales and taxable base of a taxable year.
taxpayer under investigation; d. None of the above
a. Both statements are
correct;
b. Both statements are 73. The Commissioner of Internal Revenue cannot:
C. First statement is
wrong
correct, but second statement is wrong a. Abate or cancel tax
liability.
d. First statement is b.
wrong, but second statement is correct. Compromise payment of internal revenue taxes.
.d. Credit or refund taxes erroneously or llegally collected.
Compromise criminal aspect of tax violationsif already filed in
COurt

550
551
 Chapler trruises Tay Remedie
except:
BIR,
ofthe national internal
following
are
the
powers

and
of all
c o l l e c t i o n
na
revenue
4 . The assessment
decided in
a. The in all
cases
favor by
judgments
ofall
taxes.
and finen
and fines connected
execution courts.

b. The ordinary penalties

and the forfeitures,

the CTA of all taxes.

e n f o r c e m e n t

The
r e v e n u e

customs duties
C. internal some
national collection
of
with
a s s e s s m e n t
and
d. The taxable year
taxpayer's
the
terminate busines ness subject to tax
the BlR from
75. When may
taxpayer
is retiring the Philippines
I.When
I. Wher the intends to leave

When the
taxpayer
his property
from the Philippines the Philippines
I. removes
taxpayer c o n c e a l s his property
. When the
hides or
V. When the taxpayer any act tending
to the
the obstruct
When the taxpayer
performs
taxes
V. of
for collection above
proceeding C. Any of the
a. Ill and IV only d. All of the above
b. I, Il and IV only

552