D. TAX REMEDIES 2.

Preparation of tentative findings

and holding of informal conference;

Type of Remedies 3. Issuance of Preliminary

1. Summary — remedies at the
administrative level that are executed
without ceremony or delay; short or
concise;
2. Substantive — remedies provided for
by law or regulation; an essential part
or constituent or relating to what is
essential;
3. Procedural — remedies involving law
of pleading, evidence, jurisdiction, etc.;
4. Administrative — remedies available
at the administrative level;
5. Judicial — remedies that are enforced
through judicial action, which may be
civil or criminal.
I. ASSESSMENT OF INTERNAL
REVENUE TAXES
An assessment is the notice to the effect that
the amount therein stated is due from a
taxpayer as a tax with a demand for payment
of the same within the stated period of time.
To assess means to impose a tax.
Assessment Notice (PAN) — the
Assessment Division or the CIR shall
issue by registered mail, a PAN, if
there exists sufficient basis to assess
the taxpayer for any deficiency tax.
The PAN shall show the facts and the
law, rules and regulations, or
jurisprudence on which the proposed
assessment is based.
The taxpayer is given 15 days from
receipt of PAN to reply.
Failure to respond within said time, the
taxpayer shall be considered in
default.
A formal letter of demand and
assessment shall then be issued,
calling for payment of the deficiency
tax liability + penalties.
4. Reply — To contest in writing the
findings contained in a PAN.

Assessment Process REPLY PROTEST

15 days from 30 days from receipt
1. Self-assessment by taxpayer; receipt of PAN of FAN
2. Filing of tax return; Usually done by Needs legal
3. Payment of the entire tax due. the taxpayer assistance
Directory Mandatory
Role of the government in the assessment Failure makes the Failure makes the
process taxpayer in FAN final and
default — no executory — taxpayer
1. Examination of books of accounts and liability for loses right to contest
other accounting records of taxpayers; additional or the assessment both
deficiency tax at the admin and
a. Best evidence obtainable — judicial levels.
When a report required by law
as a basis for the assessment 5. Issuance of Formal Assessment
of any national internal revenue Notice (FAN) and Letter of Demand
tax shall not be forthcoming (LD) — The invalid service of LD/FAN
within the time fixed or when to an unauthorized person will render
there is reason to believe that the assessment VOID for violation of
any such report is false, the due process requirement.
incomplete or erroneous, the
CIR shall assess the proper tax 6. Filing of administrative protest by
on the best evidence the taxpayer against the
obtainable. assessment — The taxpayer has 30
days from receipt of LD/FAN to file a
b. Net worth method of protest.
investigation — this method is
supported by Sec 43 of the The taxpayer may protest part of the
NIRC which allows the CIR to LD/FAN, in which case, those
use any method of computation undisputed issues may be duly
or accounting which would collected.
more clearly reflect the income
of the taxpayer. No action shall be taken on the
disputed issues until the taxes on the

1|Page Group IV
 undisputed issues have been fully b. Prepares report of examination
paid. based on the results of
meeting;
The prescriptive period for assessment
or collection of the tax attributable to c. Submits written report to
the disputed issues shall be Revenue District Officer.
suspended.
2. Post-reporting Notice
The taxpayer should state the facts,
applicable law, rules, regulations, or Revenue District Officer — 15 days
jurisprudence on which his protest is
based; otherwise, protest is deemed a. Taxpayer submits written
VOID. explanations on findings;

Failure to file a valid protest within the b. RDO forwards report to

30-day period shall make the Assessment Division.
assessment final, executory and
demandable. 3. Preliminary Assessment Notice
(PAN)
7. Submission of documentary
evidence and arguments — The Chief, Assessment Division — 15
taxpayer shall submit the required days
documents in support of his protest
within 60 days from date of filing of a. Taxpayer submits written
protest; otherwise, the assessment explanations on findings;
shall become final, executory and
demandable. b. The Chief prepares
assessment notice and
If the protest is denied, appeal to the demand letter for approval by
CTA within 30 days from receipt of the RD.
decision.

8. Denial of protest — Generally, appeal GR: PAN is REQUIRED to be issued

is to be taken to the CTA. But if the
taxpayer appeals the adverse decision
of the duly authorized representative of
the CIR to the CIR, then the decision is
not yet final, executory, and
demandable.
9. Appeal by the taxpayer of the final
decision of the CIR or his
authorized representative on the
disputed assessment to the CTA —
The CIR has 180 days from
submission of required documents to
act on the protest. If the CIR fails to act
during said period, the taxpayer has 30
days from the lapse of the 180-day
period to appeal to the CTA.
A. PROCEDURAL DUE PROCESS IN
TAX ASSESSMENTS
1. Notice of informal conference
Revenue Officer
a. Informs the taxpayer of his
findings as well as the factual
and legal bases after the
completion of his tax audit in an
informal meeting;
by the BIR.
XPNs:
a. When the finding for any
deficiency tax is the result of
mathematical error in the
computation of the tax as
appearing on the face of the
return; or
b. When a discrepancy has been
determined between the tax
withheld and the amount
actually remitted by the
withholding agent; or
c. When a taxpayer who opted to
claim a refund or tax credit of
excess creditable withholding
tax for a taxable period was
determined to have carried
over and automatically applied
the same amount claimed
against the estimated tax
liabilities for the taxable quarter
or quarters of the succeeding
taxable year; or
d. When the excise tax due on
excisable articles has not been
paid; or

2|Page Group IV
 e. When the article locally
purchased or imported by an
exempt person, such as, but
not limited to, vehicles, capital
equipment, machineries and
spare parts, has been sold,
traded or transferred to non-
exempt persons.
Assessment is NULL and VOID for
having been issued on the day the
PAN was received by the taxpayer, or
within 15 days from receipt of the PAN.
CIR v. Metro Star Superama, Inc., 2010
(On mandatoriness of PAN)
PAN is MANDATORY. Section 228 of the
Tax Code clearly requires that the
taxpayer must first be informed that he is
liable for deficiency taxes through the
sending of a PAN.
He must be informed of the facts and the
law upon which the assessment is made.
The law imposes a substantive, not
merely a formal, requirement. The
sending of a PAN to taxpayer to inform
him of the assessment made is but part
of the "due process requirement in the
issuance of a deficiency tax
assessment,” the absence of which
renders nugatory any assessment made
by the tax authorities.
Thus, for its failure to send the PAN
stating the facts and the law on which the
assessment was made as required by
Section 228 of R.A. No. 8424, the
assessment made by the CIR is VOID.
CIR v. Nippo Metal Tech Philippines, Inc,
2019
By disregarding the 15-day period
provided by law, the CIR utterly deprived
respondent of the opportunity to contest
the PAN and present evidence in support
thereto before an FLD/FAN was issued.
Clearly, due process demands that the
taxpayer receives the PAN and that he is
given the opportunity to respond thereto.
CIR v. Enron Subic Power
The advice of tax deficiency, given by the
CIR to an employee of Enron, as well as
the preliminary 5-day letter, were not
valid substitutes for the mandatory
notice in writing of the legal and factual
bases of the assessment. These steps
were mere perfunctory discharges of the
CIR's duties in correctly assessing a
taxpayer.
3|Page
The law requires that the legal and
factual bases of the assessment be
stated in the formal letter of demand and
assessment notice. Thus, such cannot be
presumed. Otherwise, the express
provisions of Sec 228 of the NIRC and RR
No. 12-99 would be rendered nugatory.
The alleged "factual bases" in the advice,
preliminary letter and "audit working
papers" did not suffice.
4. Formal Assessment Notice (FAN)
and Letter of Demand
Regional Director — three (3) years
from date of filing of return or 10
years from date of filing false or
fraudulent return.
a. RD signs assessment notice
and demand letter;
b. He causes to be released and
mailed FAN/DL, or personal
service thereof to the taxpayer.
CIR v. Isabela Cultural Corp.
A final demand letter from the BIR,
reiterating to the taxpayer the immediate
payment of a tax deficiency assessment
previously made, is tantamount to a denial of
the taxpayer’s request for reconsideration.
Such letter amounts to a final decision on a
disputed assessment and is thus appealable
to the CTA.
Philippine Dream Company, Inc. v. CIR,
2020
Did PDCI timely file its appeal?
NO.
PDCI mistakenly computed the period of
appeal. Having chosen the remedy of
appeal against the CIR's supposed
inaction on its protest, PDCI should have
reckoned its thirty-day period for appeal
from the lapse of 180 days from the time
it filed its protest against the Final Letter
of Demand and Assessment Notice.
Thus, the petition should have been filed
on December 6, 2006 and not on October
31, 2007.
Following this Court's ruling in CIR v.
Isabela Cultural Corporation, the CTA En
Banc considered the Final Notice Before
Seizure as CIR's action on PDCI's protest
and reckoned the thirty-day period for
appeal from PDCI's receipt thereof. As
the Final Notice After Seizure is the final
decision on its protest, PDCI’s
Group IV
subsequent MRs thereafter filed did not
toll the running of the 30-day period for
appeal to the CTA.
CIR v. Unioil Corporation, August 4, 2021
1. The CIR's failure to comply with the
notice requirements under Section
228 of the 1997 NIRC effectively
denied Unioil of its right to due
process. Thus, the CIR’s assessment
was void.
2. The CIR's negligence in their power
and duty to properly assess taxes is
palpable in this case.
i. First, the CIR failed to
establish the fact of their
issuance of a PAN by not
keeping proper records of the
tax audit and assessment of
Unioil.
ii. Second, the issue on the
ostensibly "missing" PAN
arose because of the CIR's
contention that the timely
issuance thereof sufficiently
interrupted the 3-year
prescriptive period for the
assessment of taxes under
Section 203 of the NIRC.
iii. Lastly, the FAN
accompanying the Formal
Letter of Demand did not
comply with the obligatory
provision on protesting a tax
assessment under Section
228 of the NIRC.
3. In fine, the assessment is VOID for
not stating the factual and legal
bases therefor and the 3-year
period for assessment has already
prescribed.
4. The SC emphasized the import of an
assessment as containing not only a
computation of tax liabilities but also
a demand for payment within a
prescribed period.
5. Here, the CIR's assessment of Unioil
for deficiency withholding taxes has
prescribed.
i. Section 203 of the NIRC
mandates the government to
assess internal revenue taxes
within 3 years from the last
day prescribed by law for the
filing of the tax return or the
actual date of filing of such
return, whichever comes
later.
6. From the date of the Formal Letter of
Demand and the FAN which were
simultaneously issued on January 14,
2009 and only received by Unioil on
January 26, 2009, the three-year
prescriptive period reckoned from the
4|Page
deadline set by law for the filing of
the return, assessment of the
January to November 2005 monthly
remittance returns has palpably
prescribed.
7. The CIR, in exercising its power to
assess and collect taxes if these are
owed, ought to give due
consideration to the arguments and
evidence submitted by the affected
party.
8. Here, the CIR only perfunctorily
assessed Unioil and went through
just the motions without due
consideration.
i. This is apparent from the
haste in which the FLD and
the FAN were issued on
January 14, 2009 in order to
ostensibly beat the 3-year
prescriptive period which was
set after January 15, 2009.
9. The requirement set by law to state
in writing the factual and legal bases
for the assessment is not a hollow
exhortation. The law imposes a
substantive, not merely a formal,
requirement.
5. Protest Letter
a. Taxpayer files request for
reinvestigation or motion for
reconsideration within 30 days
from receipt of FAN/DL;
b. He submits additional
documentary evidence within
60 days from submission of the
protest letter.
6. Reinvestigation
a. BIR evaluates the legal and
factual arguments;
b. Reiterates original findings or
revises report of examination
and submits it to RDO until it
reaches the RD.
7. Denial of Protest by RD — 180 days
from date of filing protest or
submission of documentary evidence
by taxpayer.
8. Administrative Appeal to CIR of
decision of RD
9. Denial of Protest or Inaction by CIR
within 180-day period
RCBC v. CIR
Group IV
In case the CIR failed to act on the correct return to the CIR, verified
disputed assessment within the 180-day under oath, setting forth the terms of
period from date of submission of such resolution or plan.
documents, a taxpayer can either:
1. File a petition for review with the CTA The dissolving or reorganizing
within 30 days after the expiration of corporation shall, prior to the issuance
the 180-day period; or by the SEC of the Certificate of
2. Await the final decision of the CIR on Dissolution or Reorganization, as
the disputed assessments and may be defined by rules and
appeal such final decision to the CTA regulations prescribed by the
within 30 days after receipt of a copy Secretary of Finance, upon
of such decision. recommendation of the CIR, secure a
However, these options are mutually certificate of tax clearance from the
exclusive, and resort to one bar the BIR which certificate shall be
application of the other. submitted to the SEC.

10. Appeal to CTA by taxpayer — 30 PAN FAN

days from receipt. Merely informs the Contains not only a
taxpayer of the initial computation of tax
GR: Taxes are SELF-ASSESSING. findings of the BIR. liabilities but also a
demand for payment
XPNs: It contains the within a prescribed
proposed period.
1. Tax period of a taxpayer is assessment, and the
terminated — When it shall come to facts, law, rules, and As soon as it is
the knowledge of the CIR that a regulations or served, an obligation
taxpayer is: jurisprudence on arises on the part of
which the proposed the taxpayer
a. retiring from business subject assessment is concerned to pay
to tax, or based. the amount
assessed and
b. intending to leave the It does not contain a demanded.
Philippines or to remove his demand for payment
property therefrom or to hide or but usually requires It also signals the
conceal his property, or the taxpayer to reply time when penalties
within 15 days from and interests begin
c. performing any act tending to receipt. Otherwise, to accrue against the
obstruct the proceedings for the the CIR will taxpayer.
collection of the tax for the past
or current quarter or year or to Failure to file an
render the same totally or partly administrative
ineffective unless such protest within 30
proceedings are begun days from receipt of
immediately; the FAN will render
the assessment
2. Deficiency tax liability arising from a final, executory, and
tax audit conducted by the BIR; demandable.

3. Tax lien — If any person liable to pay B. REQUISITES OF A VALID

an internal revenue tax, neglects or
refuses to pay the same after demand,
the amount shall be a lien in favor of
the Government of the Philippines from
the time when the assessment was
made by the CIR;
4. Dissolving corporation — Every
corporation shall, within 30 days after
the adoption by the corporation of a
resolution or plan for its dissolution, or
for the liquidation of the whole or any
part of its capital stock, including a
corporation which has been notified of
possible involuntary dissolution by the
SEC, or for its reorganization, render a
ASSESSMENT
1. The Final Assessment Notice (FAN)
contains:
a. the name, address, and TIN of
the taxpayer;
b. the kind of tax, period covered,
basic tax, and penalties;
c. signed by the authorized BIR
official, and
d. the date of payment of the tax.
The Demand Letter (DL) contains:

5|Page Group IV
 a. the computation of the
deficiency tax, including
penalties, if any;
b. the factual and legal bases of
the assessment; and
c. the demand for payment of the
tax.
2. The FAN/DL must be issued on
account of or covered by a validly
issued letter of authority.
A LOA is the authority given to the
appropriate revenue officer assigned to
perform assessment functions. A
Letter Notice (LN) cannot be converted
into a LOA. A LN is merely a notice of
audit or investigation only for the
purpose of disqualifying the taxpayer
from amending his returns.
Medicard Philippines v. CIR, 2017
re: LOA vs LN
The following differences between a LOA
and LN are crucial.
1. First, a LOA addressed to a revenue
officer is specifically required under
the NIRC before an examination of a
taxpayer may be had while a LN is
not found in the NIRC and is only for
the purpose of notifying the taxpayer
that a discrepancy is found based on
the BIR’s relief system.
2. Second, a LOA is valid only for 30
days from date of issue while a LN
has no such limitation.
3. Third, a LOA gives the revenue
officer only a period of 120 days from
receipt of LOA to conduct his
examination of the taxpayer whereas
a LN does not contain such a
limitation.
CIR v. Fitness by Design, Inc, 2016
To avail of the extraordinary period of
assessment in Section 222(a) of the
NIRC, the CIR should show that the facts
upon which the fraud is based is
communicated to the taxpayer. The
burden of proving that the facts exist in
any subsequent proceeding is with the
CIR. Furthermore, the Final Assessment
Notice is not valid if it does not contain a
definite due date for payment by the
taxpayer.
3. Must state the factual and legal
bases of the assessment and
jurisprudence on which it is based;
otherwise, it shall be void;
4. Must be signed by the CIR or his duly
authorized representative;
6|Page
5. Must be issued within the original
prescriptive period prescribed by law
or within the extended prescriptive
period as validly agreed between the
BIR and the taxpayer; and served by
personal delivery or by registered mail;
and
6. Must be addressed and served to
the correct person in his registered or
duly notified new address.
Forms of Assessment
1. Formal Assessment Notice or FAN;
2. Informal written notice — An
assessment may also be in the form of
a letter or other less formal
communications to the taxpayer. The
notification must contain an outright
demand for payment of the amount
alleged to be due in order to constitute
an assessment.
Significance of Assessment — It is relevant:
1. In the proper pursuit of judicial and
extrajudicial remedies to enforce tax
liabilities and other charges;
2. In the application of statutes of
limitations;
3. In the establishment of tax liens; and
4. In estimating the revenues that may be
collected by the government in the
coming year.
When is a tax assessment made or
deemed made?
1. Issue Date — NOT the reckoning
point in prescription.
2. Date of Service or Mailing —
Assessment is deemed made when
notice is released or mailed to the
correct taxpayer.
3. Date of Receipt — The law does not
require that the demand or notice be
received within the prescriptive period.
C. TAX DELINQUENCY VS. TAX
DEFICIENCY
A taxpayer is delinquent in the payment of
his tax when:
1. The self-assessed tax per return filed
by the taxpayer on the prescribed date
was not paid at all or was only partially
paid; or
2. The deficiency tax assessed by the
BIR became final and executory.
The term 'deficiency' means:
Group IV
 1. The amount by which the tax imposed b. If before the expiration of the time
exceeds the amount shown as the tax prescribed in Section 203 for the
by the taxpayer upon his return; or assessment of the tax, both the CIR
2. If no amount is shown as the tax by the and the taxpayer have agreed in
taxpayer upon this return, or if no writing to its assessment after such
return is made by the taxpayer, then time, the tax may be assessed within
the amount by which the tax exceeds the period agreed upon.
the amounts previously assessed (or
collected without assessment) as a c. Collection by distraint or levy or by a
deficiency. proceeding in court within 5 years
following the assessment of the tax.
Remedies in the collection of deficiency
and delinquency tax CIR v. Asalus Corp, 2017
re False Return
Delinquent Deficient
Can (✓) Has to go Under Section 248(B) of the NIRC, there
immediately be through is a prima facie evidence of a false return
collected protest if there is a substantial under declaration
administratively of taxable sales, receipt or income. The
through the failure to report sales, receipts or income
issuance of in an amount exceeding 30% what is
warrant of declared in the returns constitute
distraint and substantial under declaration. The CIR
levy, and/or need not immediately present evidence
judicial action to support the falsity of the return, unless
Filing of civil (✓) May be the taxpayer fails to overcome the
action for the dismissed presumption against it.
collection in during
ordinary court pendency Asalus was bound to refute the
of protest presumption of the falsity of the return
Subject to (✓) NOT and to prove that it had filed accurate
administrative subject to returns. Its failure to overcome the same
penalties 25% warranted the application of the 10-year
such as 25% surcharge prescriptive period for assessment under
surcharge, Section 222 of the NIRC.
interest and
compromise CIR v. PDI, 2017
penalty re Concept of Intentional Falsity as
reiterated in CIR v. BPI-Philam Life
D. PRESCRIPTIVE PERIOD FOR Assurance, 2019
ASSESSMENT
Mere understatement of a tax is not itself
A. FALSE RETURNS VS. proof of fraud for the purpose of tax
FRAUDULENT RETURNS VS. NON- evasion.
FILING OF RETURNS
While the filing of a fraudulent return
Internal revenue taxes shall be assessed necessarily implies that the act of the
within 3 years after the last day prescribed by taxpayer was intentional and done with
law for the filing of the return or from the day intent to evade the taxes due, the filing of
the return was filed in case of belated filing. a false return can be intentional or due to
honest mistake. For instance, an entry of
Exceptions as to Period of Limitation of wrong information due to mistake,
Assessment and Collection of Taxes — carelessness, or ignorance, without
intent to evade tax, does not constitute a
a. In the case of a false or fraudulent false return
return with intent to evade tax or of
failure to file a return — within ten (10) 2. SUSPENSION OF THE RUNNING OF
years after the discovery of the falsity, STATUTE OF LIMITATIONS
fraud or omission:
The running of the Statute of Limitations shall
Provided, That in a fraud assessment be suspended:
which has become cognizance of in 1. For the period during which the CIR is
the civil or criminal action for the prohibited from making the
collection thereof. assessment or beginning distraint or

7|Page Group IV
 levy or a proceeding in court and for
sixty (60) days thereafter;
2. When the taxpayer requests for a
reinvestigation which is granted by
the CIR;
3. When the taxpayer cannot be
located;
4. When the warrant of distraint or levy is
duly served upon the taxpayer and no
property could be located; and
5. When the taxpayer is out of the
Philippines.
CIR v. Hambrecht & Quist Philippines,
2010
The mere filing of a protest letter which is
not granted does not operate to suspend
the running of the period to collect taxes.
In the case at bar, the records show that
respondent filed a request for
reinvestigation on December 3, 1993,
however, there is no indication that
petitioner acted upon respondent’s
protest.
II. TAXPAYER’S REMEDIES
Administrative
1. Before payment of the deficiency tax
assessment, the remedy is to file a
written protest within 30 days from
receipt of FAN;
2. After payment of the same, the remedy
is to file a written claim for refund or
tax credit — either with the BIR or the
DOF One Stop Shop Center.
The taxpayer need NOT pay the
deficiency tax assessment under
protest nor is he required to protest at
the time of payment.
Judicial
1. Appeal to CTA. If the protest is denied
in whole or in part, or is not acted upon
within one hundred eighty (180) days
from submission of documents, the
taxpayer adversely affected by the
decision or inaction may appeal to the
CTA:
a. within 30 days from receipt of
the said decision, or
b. from the lapse of 180-day
period;
otherwise, the decision shall become
final, executory, and demandable.
8|Page
2. When in the opinion of the Court the
collection may jeopardize the interest
of the Government and/or the
taxpayer, the Court, at any stage of the
proceeding, may suspend the said
collection and require the taxpayer
either:
a. to deposit the amount claimed
or
b. to file a surety bond for not
more than double the amount
with the Court
c. A preliminary hearing is
required for the proper
determination of the necessity
of a surety bond or the
reduction thereof. (Pacquiao v.
CTA)
Substantive
1. Questioning the constitutionality or
validity of statutes or regulations
2. Failure to inform the taxpayer in
writing of the legal and factual
bases of assessment makes it VOID
— The taxpayers shall be informed in
writing of the law and the facts on
which the assessment is made;
otherwise, the assessment shall be
void.
3. Preservation of books of accounts
and once-a-year examination — For
income tax purposes, such
examination and inspection shall be
made only once in a taxable year,
except in the following cases:
a. Fraud, irregularity or mistakes,
as determined by the
Commissioner;
b. The taxpayer requests
reinvestigation;
c. Verification of compliance with
withholding tax laws and
regulations;
d. Verification of capital gains tax
liabilities; and
e. In the exercise of the CIR's
power under Section 5(B) to
obtain information from other
persons in which case, another
or separate examination and
inspection may be made.
All taxpayers are required to
preserve their books of accounts for
a period of 10 years reckoned from
the day following the deadline in filing
a return, or if filed after the deadline,
from the date of the filing, for the
Group IV
 taxable year when the last entry was
made in the books of accounts.
a. First 5 years — hardcopies;
b. Next 5 years — may retain
only an electronic copy of the
hardcopies.
4. ACTION OF THE COMMISSIONER
ON THE PROTEST FILED
a. Period to act upon or decide on
protest filed — 180 days

4. Publication of RMC and RMO — b. Remedies of the taxpayer in case of

Absence of publication renders the denial or inaction of the
RMC and RMO invalid. Commissioner:

5. Power of CIR to distribute or How to Appeal:

allocate gross income and i. If the protest is denied by the
deductions does NOT include the CIR’s duly authorized
power to impute ‘theoretical representative:
interests’ to the controlled
taxpayer’s transactions a. Appeal to the CTA; or
b. Elevate the protest
6. Availment of tax amnesty through a request for
reconsideration to the
A. PROTESTING AN ASSESSMENT CIR.

1. PERIOD TO FILE PROTEST Both within 30 days from

receipt of decision.
Within 30 days from receipt of the
assessment. NO request for
reinvestigation is allowed in
There are basically two types: administrative appeal.
1. Request for Reconsideration —
anchored on documents, arguments, ii. If the protest is NOT acted
and legal authorities already submitted upon by the CIR’s duly
to the BIR. authorized representative
within the 180-day period:
This may involve a question of fact, or
law, or both. a. Appeal to the
CTA within 30
2. Request for Reinvestigation — days after the
grounded on new or additional expiration of the
documents, arguments, and legal 180-day period;
authorities not yet submitted. or
b. Await the final
The taxpayer shall state in his protest: decision of the
1. The nature of the protest; CIR’s duly
2. Date of the assessment notice; and authorized
3. The applicable law, rules, and representative of
regulations, or jurisprudence on which the disputed
the protest is based; otherwise, the assessment.
protest shall be deemed void.
iii. If the protest or administrative
2. SUBMISSION OF SUPPORTING appeal is denied by the CIR:
DOCUMENTS
a. Appeal to the CTA
Submit additional relevant supporting within 30 days from
documents within 60 days from filing of receipt.
protest. The 180-day period will be reckoned
from the day the taxpayer submitted such A MR of the CIR’s denial
documents. shall NOT toll the 30-day
period to appeal to the
3. EFFECT OF FAILURE TO FILE CTA.
PROTEST
iv. If the protest is NOT acted
The assessment shall become final, upon by the CIR within the 180-
executory, and demandable. No requests for day period:
reconsideration or reinvestigation may then be
granted.

9|Page Group IV
 a. Appeal to the CTA
within 30 days after the
expiration of the 180-
day period; or
b. Await the final decision
of the CIR on the
disputed assessment
and appeal such final
decision to the CTA
within 30 days after
receipt of the decision.
NB: These options are
MUTUALLY EXCLUSIVE.
Denial of Protest:
i. DIRECT — The decision of the
CIR or his duly authorized
representative shall:
a. State the facts,
applicable law, rules
and regulations, or
jurisprudence on which
such decision is based;
and
b. That the same is his
final decision.
ii. INDIRECT —
a. CIR did not rule on the
motion for
reconsideration;
b. Referral by the CIR of
request for
reinvestigation to OSG;
c. Reiterating the demand
for immediate payment
of deficiency tax due to
taxpayer’s continued
refusal to execute
waiver;
d. Preliminary collection
letter may serve as
assessment notice.
c. Effect of failure to appeal
The assessment shall become final,
executory, and demandable.
B. COMPROMISE AND ABATEMENT
OF TAXES
The Commissioner may —
a. Compromise the payment of any
internal revenue tax, when:
1. Doubtful validity. A assessment agreed to by the
reasonable doubt as to the
validity of the claim against the
taxpayer exists; or
10 | P a g e
2. Financial incapacity. The
financial position of the
taxpayer demonstrates a clear
inability to pay the assessed
tax.
This should be accompanied by
a waiver of the secrecy of bank
deposits.
The compromise settlement of any tax
liability shall be subject to the following
minimum amounts:
1. For cases of financial
incapacity, a minimum
compromise rate equivalent to
ten percent (10%) of the
basic assessed tax; and
2. For other cases, a minimum
compromise rate equivalent to
forty percent (40%) of the basic
assessed tax.
Where the basic tax involved exceeds
P1M or where the settlement offered is
less than the prescribed minimum
rates, the compromise shall be subject
to the approval of the National
Evaluation Board.
TN: Compromise cannot be availed of
by a withholding agent.
b. Abate or cancel a tax liability, when:
1. The tax or any portion thereof
appears to be unjustly or
excessively assessed; or
2. The administration and
collection costs involved do not
justify the collection of the
amount due.
All criminal violations may be
compromised except:
a. those already filed in court, or
b. those involving fraud.
In addition, the following cannot be
compromised:
c. Cases where final reports or
reinvestigation or
reconsideration have been
issued resulting in the
reduction of the original
taxpayer when he signed the
required agreement form.
d. Payment of withholding tax,
where the financial position of
Group IV
 the withholding agent shows a
clear inability to pay. 4. A refund shall not be granted when
there is a deficiency tax assessment
GR: The power to compromise and against the claimant-taxpayer.
abate belongs to the CIR.
5. Once the taxpayer opts to carry-over
XPNs: the excess income tax against the
1. assessments issued by the taxes due for the succeeding taxable
regional offices involving basic years, such option is irrevocable for
deficiency taxes of the whole amount of the excess. The
Php500,000.00 or less, and excess shall be carried over and duly
2. minor criminal violations. applied UNTIL FULLY UTILIZED.

may be compromised by a regional 6. An exception to the irrevocability

evaluation board. rule is when a corporation
dissolves. A refund is then allowed for
The last step in the abatement process any unutilized tax credit it had
is the issuance of a termination letter. previously opted to be carried over.

C. RECOVERY OF TAX 7. A withholding agent is allowed to claim

ERRONEOUSLY OR ILLEGALLY for tax refund, because under the law,
COLLECTED said agent is the one who is held liable
for any violation of the withholding tax
If the sum of the quarterly tax payments made law should such violation occur.
during the said taxable year is not equal to the
total tax due on the entire taxable income of 8. Starting date for counting the two-year
that year, the corporation shall either: period —
a. Pay the balance of tax still due; or GR: From the date of payment
b. Carry-over the excess credit; or regardless of any supervening cause
c. Be credited or refunded with the that may arise after payment.
excess amount paid, as the case may
be. XPNs:
a. Corporate income tax —
Once the option to carry-over and apply the Where a corporation paid
excess quarterly income tax against income quarterly income taxes in any
tax due for the taxable quarters of the of the first three quarters during
succeeding taxable years has been made, the taxable year but incurs a
such option shall be considered irrevocable net loss during said year, the
for that taxable period and no application for period shall be counted from
cash refund or issuance of a tax credit the date of the filing of the
certificate shall be allowed therefor. annual corporate income tax
return.
1. A Tax Credit Certificate is a
certification, duly issued to the b. Income tax paid in
taxpayer named therein installments — Where the tax
acknowledging that the grantee- had been paid in installments,
taxpayer is legally entitled a tax credit, the taxes are deemed paid, for
the money value of which: purposes of determining the
a. May be used in payment of commencement of the two-year
any of his internal revenue tax period, on the date the last
liability, or installment was paid.
b. May be converted as a cash
refund.
Rhombus Energy v. CIR, 2018
re Irrevocability Rule
2. A refund is a claim for the payment of
cash for taxes erroneously or illegally
The controlling factor for the operation of the
paid by the taxpayer.
irrevocability rule is that the taxpayer chose
an option; and once it had already done so,
3. No credit or refund of taxes or
it could no longer make another one.
penalties shall be allowed unless the
taxpayer files in writing with the CIR a
Procedure for Claiming Refunds or Tax
claim for credit or refund within 2
Credits of Tax Erroneously or Illegally
years after the payment of the tax or
Collected under Section 229
penalty.

11 | P a g e Group IV
 1. A written claim for refund must be filed taxes comes with the responsibility to return
with the CIR within 2 years from date the same to the principal taxpayer.
of payment of the tax;
Winebrenner & Iñigo v. CIR, 2015
2. A decision of the CIR denying the reiterated in CIR v. Philippine National
claim is appealable to the CTA within Bank, 2019
30 days from receipt thereof or within
2 years from date of payment, WON the submission and presentation of
whichever comes first; the quarterly ITRs of the succeeding
quarters of a taxable year is
3. If no decision is made by the CIR, the indispensable in a claim for refund.
aggrieved taxpayer must consider the
inaction as a denial and appeal to the NO.
CTA must be filed before the lapse of
2 years counted from date of payment. The irrevocability rule under Section 76
of the NIRC means that once an option,
either for refund or issuance of tax credit
When is Tax Erroneously or Illegally certificate or carry-over of CWT has been
Collected exercised, the same can no longer be
modified for the succeeding taxable
1. Erroneously or illegally assessed or years. What Section 76 requires, just like
collected internal revenue taxes; in all civil cases, is to prove the prima
2. Penalties imposed without authority; facie entitlement to a claim, including the
3. Any sum alleged to have excessively fact of not having carried over the excess
or in any manner wrongfully collected; credits to the subsequent quarters or
4. Refund of BIR stamps when returned taxable year. It does not say that to prove
in good condition by the purchaser; such a fact, succeeding quarterly ITRs
5. Redemption or change of unused are absolutely needed.
stamps rendered unfit for use and
refund of their value. This simply underscores the rule that any
document, other than quarterly ITRs may
204(c) and 112(c) 228 be used to establish that indeed the non-
229 carry over clause has been complied
Recovery of Refund of Administrative with, provided that such is competent,
tax unutilized Protest on relevant and part of the records.
erroneously input VAT Assessment
or illegally from 0% Zuellig-Pharma Asia Pacific Ltd. Phils.
collected transactions ROHQ v. CIR, 2020
The 2-year prescriptive 30-day
period reglementary As held in Pilipinas Total Gas, it is the
Applies to Applies to period taxpayer who ultimately determines when
AC and JC AC only complete documents have been
from date of from close submitted for the purpose of
payment of taxable commencing and continuing the running
quarter of the 120-day period. As herein applied,
when sale the 120-day period should therefore be
was made reckoned from the April 29, 2014 letter of
CIR has no CIR has 90 CIR has 180 Zuellig-PH wherein it stated that it had
prescribed days to days to already submitted the complete
period to resolve resolve documents in support of its refund claim.
resolve In turn, the BIR had 120 days from such
Appeal to the CTA time (or until August 27, 2014) to act on
Within the 2- 30 days 30 days from Zuellig-PH's administrative claim for
year from receipt receipt of refund. Since it was established that the
prescriptive of denial of decision; OR BIR failed to act within such period,
period; or 30 CIR. From inaction Zuellig-PH had thirty (30) days, or until
days from or await then September 26, 2014, to file its judicial
receipt of appeal within claim. Thus, its Petition for Review was
decision of 30 days timely filed on September 25, 2014.
CIR.
III. GOVERNMENT REMEDIES FOR
CIR v. Smart Communication, Inc., 2010 COLLECTION OF DELINQUENT
TAXES
The right of a withholding agent to claim a
refund of erroneously or illegally withheld In a nutshell:

12 | P a g e Group IV

1. Tax lien;
2. Distraint of personal property, or levy
of real property, or garnishment of
bank deposits;
3. Sale of property;
4. Forfeiture;
5. Compromise and abatement;
6. Penalties and fines; and
7. Suspension of business operations.
A. REQUISITES
A taxpayer is delinquent in the payment of his
tax when:
1. The self-assessed tax per return filed
by the taxpayer on the prescribed date
was not paid at all or was only partially
paid; OR
2. The deficiency tax assessed by the
BIR became final and executory.
B. PRESCRIPTIVE PERIODS
1. Period of Limitation Upon
Assessment — Internal revenue taxes
shall be assessed within 3 years:
a. after the last day prescribed by
law for the filing of the return, or
b. where a return is filed beyond
the period prescribed by law,
from the day the return was
filed.
In the case of a false or fraudulent
return with intent to evade tax or of
failure to file a return — within 10
years after the discovery of the falsity,
fraud or omission.
If the return is amended substantially,
then the period to assess will be
reckoned from the filing of the
amended return.
The taxpayer is given 3 years from
date of filing of original return to
amend, provided that no notice for
audit or investigation of such return,
statement or declaration has in the
meantime been actually served upon
the taxpayer.
2. Collection —
a. When the CIR validly issues an
assessment within the three
(3)-year period, it has another
three (3) years within which to
collect the tax due by distraint,
levy, or court proceeding. (CIR
v. United Salvage and Towage
2014)
13 | P a g e
b. In the case of an omission to
file or if the return filed is false
or fraudulent, the period to
collect is:
i. within ten (10) years
from discovery without
need of assessment; or
ii. within five (5) years
from date of
assessment. (Sec 222,
NIRC)
3. Period to File Criminal Action — All
violations of any provision of this Code
shall prescribe after five (5) years.
Prescription shall begin to run from
the day of the commission of the
violation of the law, and if the same be
not known at the time, from the
discovery thereof.
The prescription shall be interrupted
when proceedings are instituted and
shall begin to run again if the
proceedings are dismissed for reasons
not constituting jeopardy.
The term of prescription shall not run
when the offender is absent from the
Philippines.
Imelda Sze, et al. v. BIR, 2020
How to determine the reckoning point of the
5-year prescriptive period for violations of
the NIRC?
The CTA explained that RMC 101-90
provides that an offense under the tax
code is considered discovered only after
the manner of commission and the
nature and extent of fraud has been
definitely ascertained. This occurs when
the BIR renders its final decision and
requires the taxpayer to pay the
deficiency tax,
Here, counting 30 days from the service
of the FLD and the FAN, the violations
were considered discovered on March 9,
2005. The BIR's revenue officers filed
their joint affidavit in the DOJ for
preliminary investigation on May 26 2005.
However, the original Information was
only filed in court on April 23, 2014,
which exceeded the five-year prescriptive
period. Therefore, the action had
prescribed.
4. No credit or refund of taxes or
penalties shall be allowed unless the
taxpayer files in writing with the
Commissioned a claim for credit or
Group IV
 refund within two (2) years after the
payment of the tax or penalty.
5. Local taxes, fees, or charges shall be
assessed within five (5) years from
the date they became due.
In case of fraud or intent to evade the
payment of taxes, fees, or charges, the
same may be assessed within ten (10)
years from discovery of the fraud or
intent to evade payment.
6. Local taxes, fees, or charges may be
collected within five (5) years from the
date of assessment by administrative
or judicial action.
7. Under the Tax Code, if the law does
not provide for any particular
prescriptive period of assessment, the
rule is that the tax sought to be
assessed becomes
IMPRESCRIPTIBLE.
8. The issue of prescription must be
raised at the administrative level and
evidence to prove prescription must be
introduced by the taxpayer.
CIR v. Phil. Global Communication, Inc.
WON CIR's right to collect respondent's
alleged deficiency income tax is barred by
prescription.
YES.
The assessment, in this case, was
presumably issued on 14 April 1994 since
the respondent did not dispute the CIR's
claim. Therefore, the BIR had until 13
April 1997. However, as there was no
Warrant of Distraint and/or Levy served
on the respondents nor any judicial
proceedings initiated by the BIR, the
earliest attempt of the BIR to collect the
tax due based on this assessment was
when it filed its Answer in CTA Case No.
6568 on January 9, 2003, which was
several years beyond the three-year
prescriptive period. Thus, the CIR is now
prescribed from collecting the assessed
tax.
Fishwealth Canning Corp. v. CIR 2010
Since petitioner received the denial of its
administrative protest on August 4, 2005,
it had until September 3, 2005 to file a
petition for review before the CTA
Division. It filed one, however, on
October 20, 205, hence, it was filed out of
time. For a motion for reconsideration of
the denial of the administrative protest
14 | P a g e
does not toll the 30-day period to appeal
to the CTA.
Lascona Land Co., Inc. v. CIR, 2012
Waited for CIR Decision even after lapse
of 180 days
Considering that Lascona opted to await
the final decision of the CIR on the
protested assessment, it then has the
right to appeal such final decision to the
Court by filing a petition for review within
thirty (30) days after receipt of a copy of
such decision or ruling, even after the
expiration of the 180-day period fixed by
law for the CIR to act on the disputed
assessments.
CIR v. Primetown Property Group, Inc.
The rule is that the two-year prescriptive
period for the filing of tax refunds and tax
credits is reckoned from the filing of the
final adjusted return. But how should the
two-year prescriptive period be
computed?
Section 31, Chapter VIII, Book I of the
Administrative Code of 1987, being the
more recent law, governs the
computation of legal periods. Lex
posteriori derogat priori.
We therefore hold that respondent's
petition (filed on April 14, 2000) was filed
on the last day of the 24th calendar month
from the day respondent filed its
adjusted return. Hence, it was filed within
the reglementary period.
CIR v. Univation Motor Philippines, Inc.,
2019
WON the CTA has prematurely assumed
jurisdiction on respondent's judicial claim for
tax refund or credit without waiting for the
decision of petitioner.
NO.
In the instant case, the two-year period to
file a claim for refund is reckoned from
April 15, 2011, the date respondent filed
its Final Adjustment Return. Since
respondent filed its administrative claim
on March 12, 2012 and its judicial claim
on April 12, 2013, therefore, both of
respondent's administrative and judicial
claim for refund were filed on time or
within the two-year prescriptive period
provided by law. Under the
circumstances, if respondent awaited for
the commissioner to act on its
administrative claim (before resort to the
Court), chances are, the two-year
Group IV
 prescriptive period will lapse effectively
resulting to the loss of respondent’s right
to seek judicial recourse and worse, its
right to recover the taxes it erroneously
paid to the government. Hence,
respondent's immediate resort to the
Court is justified.
Guidelines for the Execution of Waivers
form the Defense of Prescription See RMO
No. 14-2016
1. The taxpayer's failure to follow the
forms does not invalidate the executed
waiver, for as long as the following are
complied with:
a. The Waiver of the Statute of
Limitations under Section 222
(b) and (d) shall be executed
before the expiration of the
period to assess or to collect
taxes. The date of execution
shall be specifically indicated in
the waiver;
b. The waiver shall be signed by
the taxpayer himself or his duly
authorized representative;
c. The expiry date should be
indicated.
2. Except for waiver of collection of taxes
which shall indicate the particular taxes
assessed, the waiver need not
specify the particular taxes to be
assessed nor the amount thereof.
3. The waiver may be notarized.
However, it is sufficient that the waiver
is in writing as specifically provided by
the NIRC, as amended.
4. Considering that the waiver is a
voluntary act of the taxpayer, the
waiver shall take legal effect and be
binding on the taxpayer upon its
execution thereof.
5. The taxpayer shall have the duty to
retain a copy of the accepted waiver.
6. Note that there shall only be two (2)
material dates that need to be present
on the waiver:
a. The date of execution of the
waiver by the taxpayer or its
authorized representative; and
b. The expiry date of the period
the taxpayer waives the statute
of limitations.
15 | P a g e
7. Before the expiration of the period set
on the previously executed waiver, the
period earlier set may be extended by
subsequent written waiver made in
accordance with this Order.
CIR v. Kudos Metal, 2010
A perusal of the waivers executed by
respondent's accountant reveals the
following infirmities:
1. The waivers were executed without
the notarized written authority of
Pasco to sign the waiver in behalf of
respondent.
2. The waivers failed to indicate the
date of acceptance.
3. The fact of receipt by the respondent
of its file copy was not indicated in
the original copies of the waivers.
Due to the defects in the waivers, the
period to assess or collect taxes was not
extended. Consequently, the
assessments were issued by the BIR
beyond the three-year period and are
VOID.
CIR v. Next Mobile, 2015
Asian Transmission v. CIR, 2018
The deficiencies of the Waivers in this
case are the same as the defects of the
waiver in Kudos. In the instant case, the
CTA found the Waivers because of the
following flaws:
1. they were executed without a
notarized board authority;
2. the dates of acceptance by the BIR
were not indicated therein; and
3. the fact of receipt by respondent of
its copy of the Second Waiver was
not indicated on the face of the
original Second Waiver.
Similarly, the BIR violated its own rules and
was careless in performing its functions with
respect to these Waivers. Due to its peculiar
circumstances, We shall treat this case as
an exception to this rule and find the
Waivers valid.
It is true that petitioner was also at fault
here because it was careless in
complying with the requirements of RMO
No. 20-90 and RDAO 01-05. Nevertheless,
petitioner's negligence may be addressed
by enforcing the provisions imposing
administrative liabilities upon the officers
responsible for these errors. The BIR's
right to assess and collect taxes should
not be jeopardized merely because of the
mistakes and lapses of its officers,
especially in cases like this where the
taxpayer is obviously in bad faith.
Group IV
 CIR v. Transitions Philippines Optical,
Inc., 2017
Estoppel applies against a taxpayer who did
not only raise at the earliest opportunity its
representative's lack of authority to execute
two (2) waivers of defense of prescription,
but was also accorded, through these
waivers, more time to comply with the audit
requirements of the BIR. Nonetheless, a tax
assessment served beyond the extended
period is void.
Thus, having benefited from the Waivers
executed at its instance, respondent is
estopped from claiming that they were
invalid and that prescription had set in.
CIR v. Avon Products Manufacturing,
2018
The estoppel upheld in the RCBC case
arose from:
a. the benefit obtained by the taxpayer
from its execution of the waiver, in
the form of a drastic reduction of the
deficiency taxes, and
b. the taxpayer's payment of a portion
of the reduced tax assessment.
Here, Avon did not receive any benefit from
the waivers. On the contrary, there was even
a drastic increase in the assessed deficiency
taxes when the Commissioner increase in
the assessed deficiency taxes when the
Commissioner increased the alleged sales
discrepancy. Under these circumstances,
Avon's payment of an insignificant portion of
the assessment cannot be deemed an
admission or recognition of the validity of the
waivers.
CIR v. La Flor Dela Isabela, Inc., 2019
In CIR v. Systems Technology Institute,
Inc., the Court had ruled that waivers
extending the prescriptive period of tax
assessments must be compliant with
RMO No. 20-90 and must indicate the
nature and amount of the tax due.
In the present case, the Waivers failed to
indicate the specific tax involved and the
exact amount of the tax to be assessed
or collected. Clearly, the Waivers did not
effectively extend the prescriptive period
under Section 203 on account of their
invalidity. The issue on whether the CTA
was correct in not admitting them as
evidence becomes immaterial since even
if they were properly offered or
considered by the CTA, the same
conclusion would be reached — the
assessments had prescribed as there
was no valid waiver.
16 | P a g e
IV. CIVIL PENALTIES
A. DELINQUENCY INTEREST AND
DEFICIENCY INTEREST
In General — There shall be assessed and
collected on any unpaid amount of tax,
interest at the rate of double the legal
interest rate (12%) for loans or forbearance
of any money in the absence of an express
stipulation:
Provided, That in no case shall the
deficiency and the delinquency interest be
imposed simultaneously.
Deficiency Interest — Any deficiency in the
tax due shall be subject to the 12% interest.
Delinquency Interest — In case of failure to
pay:
1. The amount of the tax due on any
return to be filed, or
2. The amount of the tax due for which no
return is required, or
3. A deficiency tax, or any surcharge or
interest thereon on the due date
appearing in the notice and demand of
the CIR,
there shall be assessed and collected on the
unpaid amount, interest at the rate of 12%
until the amount is fully paid, which interest
shall form part of the tax.
Interest on Extended Payment — If any
person required to pay the tax is qualified and
elects to pay the tax on installment, but fails
to pay, or where the CIR has authorized an
extension of time within which to pay, there
shall be assessed and collected interest at the
rate of 12% on the tax or deficiency tax or any
part thereof unpaid from the date of notice and
demand until it is paid.
B. SURCHARGE
There shall be imposed, in addition to the tax
required to be paid, a penalty equivalent to
twenty-five percent (25%) of the amount
due, in the following cases:
1. Failure to file any return and pay the
tax due thereon on the date
prescribed; or
2. Unless otherwise authorized by the
CIR, filing a return with an internal
revenue officer other than those with
whom the return is required to be filed;
or
Group IV
 3. Failure to pay the deficiency tax year or the tax due.
within the time prescribed for its The amount set is There is a minimum
payment in the notice of assessment; based on the nature amount prescribed
of the tax violation depending on the
4. Failure to pay the full or part of the and the minimum ground.
amount of tax shown on any return amount is not less
required to be filed, or the full amount than Php1,000.00.
of tax due for which no return is
required to be filed, on or before the Requires consent of the taxpayer and a validly
date prescribed for its payment. entered compromise agreement between the
taxpayer and CIR.
The penalty to be imposed shall be fifty
percent (50%) of the tax or of the deficiency Fraud penalty
tax, in case any payment has been made on
the basis of such return before the discovery A taxpayer who files a false return is liable to
of the falsity or fraud: pay the fraud penalty of 50% of the tax due
from him or of the deficiency in case payment
1. In case of willful neglect to file the has been made on the basis of the return filed
return within the period prescribed by before the discovery of the falsity or fraud.
this Code or by rules and regulations,
or
2. In case a false or fraudulent return is
willfully made.

A substantial under-declaration of taxable

sales, receipts or income, or a substantial
overstatement of deductions, shall
constitute prima facie evidence of a false or
fraudulent return.
Failure to report sales, receipts or income in
an amount exceeding thirty percent (30%) of
that declared per return, and a claim of
deductions in an amount exceeding (30%) of
actual deductions, shall render the taxpayer
liable for substantial under-declaration of
sales, receipts or income or for overstatement
of deductions, as mentioned herein.

Qatar Airways Company v. CIR, 2020

The Court agrees that the surcharge

imposed upon petitioner was not unjust
or excessive pursuant to Section 248(A)
(1) of the 1997 NIRC which provides for
the imposition of a penalty equivalent to
25% of the amount due for failure to
timely file any return and pay the tax due
thereon. Dura lex sed lex.

C. COMPROMISE PENALTY

COMPROMISE COMPROMISE
PENALTY
An amount paid by a Amount paid to
taxpayer to settle civil liability for
compromise a tax tax assessed by the
violation that he has government.
committed, which
may be the subject
of criminal
prosecution.
The basis is the The basis of the
gross sales or amount paid is the
receipts during the basic tax assessed.

17 | P a g e Group IV