er 10

Ci

Tax Remedies

ummary: Tax Remedies of the Taxpayer and the Governme

Re of the Taxpayers
These are legal actions which a tax .
burden or oppressive effect of ta payer can avail of to seek relief from the undue
: as ~ means to check possible excesses by
I
revenue officers in the performan~ea;s, 0

Remedies before payment their duties.

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.
1) Administrative remedies - refer to government remedies at the administration
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
2) Judicial remedies _ refer to remedies of the government that are enforce through
judicial action
1. Ordinary civil action
2. Criminal action

422
 fon
ent and conec' . of an officer authorized by I
Tax Assessm official action the law from a taxpayer. l'aYi
"Tax Assessmen t" unt
is the
of tax due under his
. ing the amo .
in ascertain . involves.
action necessarily due
. n of the sum taxpayer; and
a. The computat10 that effect to th~h or sometime after the giving
b. Giving n~t1ce ts~multaneously wh1 ·,m for the payment of the
The making, d upon
tao~,
c. notice, of a deman
deficiency stated

. " . the process of

Tax audit is rutinizing the
. . over or sc
examining, going 'f the taxpayer o
books and records o f the tax
ascertain the correctness o It can
declared and paid by the taxpa~r~tter of
only be performed upon a . . er of
authority" issued by the C~mm;s~~r:ctor.
Internal Revenue or Regiona .
"Pre-assessment notice (PAN)" 15 a
written notice given to a taxpayer
informing him of the findings 0 ~ th ~ BIR
officer/s relating to a deficiency in hts tax
return, indicating therein the law and the
facts on which the assessment is made
and requiring the taxpayer to respond
within a given period, otherwise, the
Commissioner or his duly authorized
representative shall issue an assessment
based on his findings.
t Letter of Authority (LOA) is
is an official document that
empowers a Revenue
Officer to examine and
scrutinize a taxpayer's
books of accounts and
other accounting reco~s
in order to determine the'
taxpayer's correct internal
revenue tax liabilities. In
the absence of such an
authority, the assessment
or examination is a nullity.
(CIR vs. Sony Phils., Inc.,
635 SCRA 234).

LETTER OF AUTHORITY (RMC 75-2018)

The judicial ruling of the Su r . .

Phils., Inc. vs. CIR (GR No 2
227 43P erne
st
Court 1n the case of Med,card
issued or no assessment fu~ 1 ) ates that "no assessment can be
of the CIR or his duly aut~ ions can be done Without the prior approval
concept of LOA is therefore ~nzed representative, through LOA . The
issued Without an LOA is a v~10 a~ and unequivocal. Any tax assessmenl
e,
and is th fo abon of the ta s
ere re "inescapably v •d· xpayers' right to due proces
o, (RMc 7s.201ai.
423
 '
The SC s decision f
~ ~~
Cl(!; ,, 'e
·a t Urther p .
~n the NJRC and is not a;
tirelY dI11eren and serve . rov1des that
a different purpos ~ Letter of Notice (LN) is
,nernands that after an LN ~uthority to condict : LO~. It is not found
d uld have properly se as served its P audit. Due process
sh 0 . . cured an LOA b urpose, the revenue officer
exarn1nat1on and assessment of the ta efore proceeding with the further
xpayer.
Delinquency is the state f
obligation t~ pay the tax has b~ena fi~:rson upon whom the personal
thereafter falls to pay the tax within th . d b~ l~wful assessment and are
e time limited by law.
What is a Pre-Assessment Nor
Ice {PAN)?

The Pre-Assessment N t· .
. I A o ice is a com . t· .
RegIona ssessment Division munica 10n issued by the
0
informing a Taxpayer who ha~ ~ any ot~er concerned BIR Office,
Revenue Officer, following the r . een audited of the findings of the
evIew of th f d'
disagrees with the findings stated in th ese in mgs. If _the Tax~ayer
(15) days from his receipt of the PAN e '.AN, he shall then have fifteen
proposed assessment. to file a written reply contesting the

When is PAN not Required?

Under 3.1.2 of RR 18-2013 in accordance to Section 228 of the Tax

Code, as amended, a PAN shall not be required in any of the following
cases:

1. When the finding for any deficiency tax is the result of

mathematical error in the computation of the tax appearing on the
face of the tax return filed by the taxpayer; or

2. When a discrepancy has been determined between the tax

withheld and the amount actually remitted by the withholding
agent; or

3. 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

424
 articles has not bee 11 p,,qJq- .
n eXCI·sable '
·se tax due o
When th• exc1 or imported by an exen,
4. or urchased vehicles, capital equ;Prneti'
5. When an u~h as, but n;arts, has to,
rticle 1oca/ly t~imited bee n sold, traded 0r transferred
person, ~ and spare
hinenes
0
ns
m•~n-exempt pers . I Letter of Demand or Fina1
to n
. d cases, a Fina
II be issue d o utright .
I
the above ?'te(FLDIFAN) sha .
n t Notice
Assessmen AN?
· ue P ·
Who has the Authority to ,ss . ersons has the authority to issue
14
Under RMC 11-20 ' the following p
PAN:

. . f Internal Revenue
1. Comm1ss1oner o al Directors S .
2. Revenue Reg,o~ ·oner Large Taxpayers erv,ce; or
3.
4. Assistant Comm,ss, ner -- Enforcement and Advocacy Service
Assistant Comm,ss,o

duly ~
h II bmitlfile their responses to the PAN with the
au onzead r!upresentative of the Commissioner who signed
Taxpayethrs
the PAN.

Prescriptive Periods for Assessment and Collection

The right of the government to assess and later on to collect the

tax is subject to prescription as provided for under Section 203 of the Tax
Code.
no Upon
longer the lapse
exercise such or expiration of such period , the government can
right.

425
 ASSESSMENT OF THE TAX L
iq .. r IABIL!Ty
• Three (3) years - com me
"b d b nces to r ft .
day pr~scr! e Y law for filin u_n a er date the return is due (last
O
return rs fried before the I gt) r filed, whichever comes later. If the
. t
begins O run only after such I
as day fo f·1 ·
r I ing, the prescriptive period
ast day.
If the return is filed after the 1
st
counted from the day the ret! ?a~ or due date, the period shall be
substantially, the period starts f n is file~.. If the return was amended
rom the filing of the amended return.
• Ten (10) vears when:
1. No return is filed or
The prescriptive period
e 2. T~e _return is false or fraudulent commences from the date
with intent to evade the tax of discovery

Considering the different periods for the filing of various

tax returns , the reckoning for the 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
required for the filing of the monthly return while for value added
tax purposes , prescriptive period shall be reckoned from the
prescribed filing date of the quarterly returns. On the other hand ,
for income taxes , while a quarterly return is required to be filed,
the prescriptive period is counted from the required filing date for
the annual income tax return rather than the quarterly return .

COLLECTION OF THE TAX

• Five (5) years - from assessment
t nd in case of false or
• Ten (10) years - without assessmen , a
fraudulent returns with intent to evade the tax

Criminal Liability . ·on or discovery of the violation,

(5) years - from comm 1ss1
llfhil'.hever is later.

426
 · ds
· tive perio
sion of PrescnP prescribed for the assessl"ll
Suspen f the time y agr . ent
·ration o he taxpayer ma ee in Writi
If before the expimissioner and_ t period within the period agrel'lg
b th the com criptive · • Eld
of the tax, o . g of the pres ·thin the 3-year prescnpt,ve Peri
to suspend th~ runnm t be executed_w, id waiver shall be ineffectua10d
upon. The waiver mu_s 203 otherwise sa .
prescn'bed under Section '

/t is likewise suspe nd ed: .

.

beginning the distrain or

. h'b'ted from making the assessment
1. When the Commissiotner ,'!:Yr~r 'a 'proceeding in court and for 60
.5 a pending petition for review in th
da:~
thereafter, such as _whe~ ;~:r~r~tested assessment,_ the filing of sue~
CTA from the dec,sron ° .
petition interrupts the runnnrn 9
of the prescriptive period for collection
·

2_ When the taxpayer requests for a reinvestigation or reconsideration

which is granted by the Commissioner.

3. When the taxpayer requests for a reinvestigation or reconsideration

4. when taxpayer cannot be located in the address given by him in the

return

5. when the warrant of dislraint and levy is duly served , but no .propert
of the taxpayer could be located y

6. when the taxpayer is out of the Philippines.

27
 7:_,
«t ' ~
1)1: pROCESS REQUIRE 'R". /.
~1:f1CIENCY TAX ASSEs:ENT IN Tl-IE
MENT ISSUANCE OFA

(Mode of procedure in the iss

section 3 of RR 18-2013 d uance of a d . .
~ ated Novemb eref1c1ency
28 2 tax assessm t·
preliminary Assessment No . , 013) en • under
(f.AN) tlce (PAN)/ Final
If after review and Assessment Nati
· · evalu t· ce
cornm1ss1oner
· or his duly a ion by th e
representative, as the c authorized Issuance of FAN
determined that there exis::u;~Y 1 be, it is ~nd Demand Letter
assess the taxpayer for an d _ci_ent basis to is tantamount to
taxes, the said Office s~all ef!c1ency tax or
denial of Reply to
taxpayer a Preliminary As issue to the
(PAN) for the proposed asssessment Notice PAN· Essential
essment (RR 18 elements of due
2013). It shall show in detail the f -
process are notice
law, rules and regulations or j . acts and the
::lnrl nnnnrh initv tn
which the proposed asses~menutr~spbrudence on
1s ased.

If the taxpayer "fails to respond" 'th·

fifteen (15) days_ from date of receipt of the
he shall be considered in default, in which case, ~
;A~n LEGAL EFFECTS OF
ISSUANCE OF FAN:
For~al Letter of Demand and Final Assessment
It creates legal
Notice (FLO/FAN) shall be issued calling for obligation on the part
paym~nt of the taxpayer's deficiency tax liability, of taxpayer to pay tax
inclusive of the applicable penalties. to the government.
However, if taxpayer
If the taxpayer, within fifteen (15) days files timely protest,
assessment does not
from date of receipt of the PAN, "responds that become final and
he/it disagrees with the findings of deficiency tax" executory.
or taxes, an FLO/FAN shall be issued within
fifteen (15) days from filing/submission of the
taxpayer's response, calling for ~aym~nt of the th
taxpayer's deficiency tax liability, inclusive of e
Plicable penalties.

428
 RR 18-2013)
nd
sESSMENT (U ~r authorized
01s PUTED AS taxpayer or t' s may protest
The tax agen .d FLO/FAN Request i
t tive or atoresa, f
represen a. ly against the f receipt thereo . Reconsideration or
ad~in1st_rat1(;0) days from date o ment may file a Refer to a Plea
whithr~~;;{er protesting an ar:~~S:sideration or re-evaluation of 01
T e uest tor an
written r~q ass~ssment on the
remvestigatwn. RR 18- basis of existin
9 as amended by . . records Withou~
Under RR 12-9 t for reinvest1gat1on' ne~d of additional
that for regues rfng
2013 provides ·t all relevant suppo .' evidence. It rna
the taxpayer shall subm; his protest within sixty involve both Y
documents in support .f of his letter of protest, . a
question of fact or
(60) days from date of f1 ,n~t shall become fin?I. of law or both.
otherwise, the assessme. documents" refer to
The term "relevant supporting su ort the legal
those documents n_ece:ssary to PP ssessment
Request for
and factual bases in disputing a tax _a Reinvestigation
as determined by the taxpayer. The sixty (60)-day Refer to a plea of
period for the submission of all relevant re-evaluation of an
supporting documents shall not apply to assessment on the
requests for reconsideration. - basis of newly
discovered or
Furthermore, the term "the assessment , additional evidence
shall become final" shall mean the taxpayer is
that a taxpayer
barred from disputing the correctness of FLO/FAN
intends to present in
by the introduction of newly discovered or
the reinvestigation.
additional evidence because he/it is deemed to
It may also involve
have lost his/its chance to present these
a question of fact or
eviden?es. The BIR shall then deny the request
;.o: "re,nve~ti~ation" through the issuance of
Final Dec,s,on on a O· t d
a of law or both.

(FDDA)" (RMC 11-2104). ,spu e Assessment

429
 n;fference between Req
v . t· uest fo R
7cu~ 7:>n,
~c ' ~
o /.

·11vest1ga ,on r econsid .

'
.- - . .. - .
erat1on
a nd Request for Re-

As to N t
Refer to a PIea of re-evaluation of a Ure/Definition
assessment on the basis of existin an Refer to
without need of additional evidenc~ records assessm!f'ea of re-eval_ uation of an
involve both a question of fact or f :t may discovered on t~_e basis of newly
both. o aw or a tax ~r add1t1onal evidence that
rein pa~er. intends to present in the
u v~st1gat1on. It may also involve a
As to the suspension of th q 3estton of fact or of law or both
Shall not suspend the 3-year period t e -year period ·
collect. o Shall suspend the 3-year period to
collect.
Limited to th_e ~vidence already at~~~d~vidence . .
Hence, subm1~s1on of additional evidence is Ent~i_ls the r~cept1on and evaluation of
no longer required. add!t!onal evidence. Failure to submit
additional evidence within 60 days
from the filing of the protest letter will
make the assessment final and
executory.
. As to the approval of the Commissioner
Can _be_ avail~d so long as the request is BIR Commissioner must first grant the
dul indicated in the rotest letter. re uest for reinvesti ation.

THE TAXPAYER SHALL STATE IN HIS PROTEST:

a) The nature of protest whether reconsideration or reinvestigation,
specifying newly discovered or additional evidence he intends to
present if it is a request for reinvestigation
b) Date of the assessment notice, and
c) The applicable law, rules and regulations, or jurisprudenc~ on whi~h
his protest is based, otherwise, his protest shall be considered void
and without force and effect.
" authorized representative" refers to Reve~ue
The term duly . ·ssioner-Large Taxpayers Service,
1st
Regional Directors, _As_s ant Cf ~~:ent and Advocacy Service (RR 18-
d Assistant Comm1ss1oner En °
13, RMC 11-2014).

430
 e Memorandum Circular No.
Revenu 0 nses to the PAN and Prate39,
· ursuant to their re 5 P to the FLO/FAN With the sts
Accordin~K~if subrnit/~~vestigatio~ner who signed the PAN
2013, taxpayers onsiderat,on/;he cornrnrss uests for reconsideration nq
!"'i
(requests for re\entative of wre of re . ing from inactions or adve Of
. ed repre the na . er ans II b t·1 rse
authonz Protest in C rnrniss1on _ tatives" sha e ' ed With th
FLO/FAN. ted to the o. d represen e
taxpayers ~eva "duly authorize
decisions of the issioner.
otnce of the comm PAN, the taxpayer may be allowed to
. the issuance of thebable deficiency taxes and Penalties
Prror to nts of pro
make voluntary payme
14
(RMC 11-2o ). an FLO/FAN issued reiterating th
MC 11-20 14 , . . I e
Likewise, under R . c taxes and penalt,~s previous y made in
.
rmme d',a te payment
, I off the
deficien Y
response to the PAN . A dfinal. .demand letter for
the PAN is a denia o be considered a ecIsIon on a disputed
I.
payment of de inque. .
nt taxes may
r of Internal Revenue vs. sa ea
I b I c
ultural
assessment (Comm,ss,on~ 10 . July 11, 2011 ). This includes a disputed
1 5
Corporation; G.R. No. ~ ' given the opportu. nity to explain their side
PAN S0 I gas the parties are 1· d . ,
· on f d process are satisfactorily comp 1e with (Calma
the requirements o. ue N 122787· February 9, 1999).
vs. Court of Appeals, G.R. o. '

A FOL/FAN issued beyond fifteen (15) days from filing/submission

of the taxpayer's response to the PAN shall be valid, provided, that, it is
issued within the period of limitation to assess internal revenue taxes . The
non-observance of the fifteen ( 15) day period, however, shall constitute an
administrative infraction and the revenue officers who caused the delay
shall be subject to administrative sanctions as provided for by law and
pertinent revenue issuances.

Modes of Service (FLO/FAN)

The notice (PAN/FLD/FAN/F
taxpayer's registered add DOA) shall first b
taxpayer's known addres ress _ before the same m y
taxpayer's registered adds, or in the altema . ,
11-2014). ress and kno n addr

431
5e11eral issues in FLD/FAN Ttl(; z~
If there are sev
axpayer ·only
d disputes eral issues invO I
or Prat ved in th
t
issues raise ' the assess me ests .against the e .FLD/F AN but the
issues shall become final nt attnbutabl t va1td1ty of some of the
shall be required to pay th' executory and de o the undisputed issue or
e defic• emandable· d
which case, a collection lett iency tax or tax '. an the taxpayer
payment of the said deficie~r shall be issued t:~h!ttnbutable ther_eto, in
surcharge and/or interest . cy tax or taxes , in c1us1ve
. taxpayer calling for
of the applicable

If there are several .issues i 1

and th~ taxpar_er_ fails to state the ~vo ved in the disputed assessment
regufatIons,
· or 1unsprudence •in supportacts,f h'the applicable Jaw, rule s an d
O
evera I issues on which the is protest against some of th
5
considered undisputed issue as~essment is based, the same shall b:
0
attn'b ut a bl e th ereto shall becomr issues
f ' in wh·ich case, the assessment
the taxpayer shall be require~ ;:al, executory and demandable; and
th
attributable thereto and a collection left!{ e deficiency tax or taxes
calling for payment of the said defic· shall _be issued to the taxpayer
surcharge and/or interest. tency tax, tncluSIVe of the applicable

Failure to File a Valid Protest

If the taxpayer fails to file a valid protest against the FLO/FAN

within thirty (30) days from date of receipt thereof, the assessment shall
become final, executory and demandable. No request for reconsideration
or reinvestigation shall be granted on tax assessments that have already
become final, executory and demandable.
Protest Denied by the Commissioner's duly authorized

representative
. (RR _zQ13), if the protest is denied, in
18
Under the new regulat 1?n . . er's duly authorized representative,
5510
Whole or in part, by the Cornrni n
the taxpayer may either: f T x Appeals (CTA) within thirty (30)
O
a) Appeal to the court t ; the said decision; or
days from date of rece1p

432
 g h requ est for reconsideration to
t st throu (30) days from ~ _o receiptthe
d te f
El vate his pro e_thin thirty at1on. sha11 bofe
b) e . ner wr e ues t for reinvest1
.
Commissro .. n No r
·ct dec1s10 . . a ea I and only h issues
. d raised in th e
the sard ·n adrnin. istrat1ve
. ·oner s, duly aut onze representat·tve
allowe , h cornrn1ss1 mmissioner.
decision oft t :ained by the Co
shall be en e missioner's duty author;2
ted Upon by
the Com
. . '
ea
Protest No~ Ac the Comm1,;s1oner s duly authorized
representative . not acted upon ~y ( BO) days counted frorn
1
If the protest.;~.n one hundred e,~~ty protest" in case of a reque,1
representatwe w1 ' f "filing of e .
• the date o. .
econsideraflon, or . . " by the taxpayer of the required
• ;~e date of '.'sub:~s'(~o) days from the _date of filing of the
documents w1th1n y est for reinvesflgat10n,
protest in case of a requ

THE TAXPAYER
) Appeal MAY w1th1n
to the CTA EITH~~~1 _Y ( 3. 0) days after the expiration of the one
a . hty ( 1BO)-day penod, or
hundredthee,g.final dec1s1on
b) Await . . of the Commissioner's duly authorized
representative on the disputed assessment.

Protest Denied by the Commissioner

If the protest or administrative appeal , as the case may be, is
denied, in whole or in part, by the Commissioner , the t axpayer may appeal
to the CTA within thirty (30) days from date of receipt of the said decision.
Otherwise, the assessment shall become final , executory and
demandab/e. A motion for reconsideration of the Commissioner' s denial of
the protest or administrative appeal, as the case may be , shall not toll the
thirty (30) day period to appeal to the CTA.

Protest Not Acted Upon by the Comm· .

If th e pro test o d · · · 1ss1oner
st
Commissioner within 0 ~: m,ni rative appeal is no t a cted upon by lhe
nd
date of filing of the prote t t~u red eighty ( 180) days counted from the
• appeal to tie·
C~~axp~y~r m~y either:
th
expiration of the O hw, ,n th!rty (30) days from after t e
nd
• await the final dec~e. u red eighty (18O)-day period · or
as ,s,on of the C . d
sessrnent and ap I
omm, s1
0 e on he IP
lhi11y (30) days after:a such final dec·s o n o C
e rece,p of a copy of c c

433
 Tac:;R.__~
It must be ernpha s1zect
. h
froteste d assessment with· , owever th t .
axpayer to either: ( 1) file a in . the 180-d,ay a e;n case th of inaction on
after the expiration of the ~it,t,on for review ~-t~~~• e option of the
the commissioner or his 1d , -day period; or (2)
e assessment and appeal s~ch ~uthorized repre:a:~~\i~:
after the receipt
~~a;h
e CTA_w,thm 30 days
decision of
b of a copy of s uchnal decision
dee· · to the CTA w,·th·e
m disputed
30 days
~ to one ars the application of th1s1on, are mutually exclusive and the
d e other.

d final Decision on a Disputed A

The decision of the ~sess_m~nt (FDDA)
representative shall state the: omm,ss,oner or his duly authorized
a) facts, the applicabl 1
jurisprudence on whic~ a;, r_ul_es . and regulations, or
decision shall be void sudc decision is based, otherwise, the
, an
b) that the same is his final decision.

CLAIM FOR REFUND (Sec. 229 and Sec. 112 of the Tax Code)

Tax refund cases are based on the civil law principle of "solutio
indebiti" (refers to the ju ridical relation which arises whenever a person
unduly delivers a thing through mistake to another who has no right to
demand it).
If a taxpayer believes that a national internal revenue tax has been
erroneously or illegally collected , or of any penalty to have been
excessively or in any manner wrongfully collected, he or she must flle a
claim for refund with the BIR.
. re the two provisions for Tax Refund under
Sections 229 and 112 a_ s to refund of tax erroneously or illegally
Tax Code . sec. 229 pertain fund of input vat in relation to zero-
·_.•lected while Sec. 11 2 pertains to re
le.

434
 eously or Illegally Collected
frron
C0 of rax Collected
79 verf ~ lall ie rt for the recovery of any nar,
7
-NIRC.• R Erroneous I . ord in any cou neously or illegally assessed'""
f rax ::- ·· ·ntarne en erro . th · or
9
. , Rec overY.. o sha-,, be mated to have ben co II ected without au onty, or
. of any
src '· roceed1ng arrer alleg have bee er wrongfully co 11 ected, unir a era,
·No surl ~'.:nue rax hef!rry claimed t~r in any mann Commissioner: but such suit ~
;nwrn,1/;e or of anY pbe~n excess1ve,1y filed with thhe tax penalty, or sum has been Pao~
corrcctc . d to credit
sum allege
h.V• has
e .been du y or not sue
d whether ' '"
for refund or be maintain• , . .
proceeding m:;duress.. filed after the exprratron of two (2) Yea~
under protest
00 ·t or proc eeding shallltybe
rega rd less of .any
. supervening cause . that
such sur h tax or pena t the Commrssroner may, even wrthouta
"In any~!~~ of payment of \:ed,
however, Tha eon the face of the return upon Which
from;~:.I .after payment. P~~r credit
refun any tax, w~eyrto have been erroneously paid"
may
written c arm
therefor,
d such paymen t appears clear
payment was ma e, of Tax Credit. -
3 rfeiture of Cash Refund and or warrant issued in accordance _With the
SECTION_2 o. F; Refund. _ A refund chec~I remain unclaimed or uncashed within fwe
"(A)rt'111Forte,tur~ _
ons of this Code,'d which
ent prov1s10 shaor check was mailed or delivered, shall be
rrant
pe year~ from the
(5) f the the sa, waan d th e amount thereof shall revert to the general
dateGovernment
forfeited m favor 0
fund.

. • . _ A tax credit certificate issued in ac~ordance with the

"(BJ Forfeiture _of Tax Cr•~\ hich shall remain unutilized after frve (5) years from
pertinent pro~is,ons ohf tlhl rs 1\ : · ,:validated be considered invalid, and shall not be
the date of issue, s a , un e
allowed as paymen t ,o
' . .. . f h t d th I
, r ,·nternal revenue tax l1ab11tt1es o t e axpayer, an e amoun
covered by the certificate shall revert to the general fund .

GROUNDS FOR FILING A CLAIM for tax refund or tax credit:

1. The tax has been erroneously or illegally assessed or collected. The
term "erroneous or illegal tax" is one levied without statutory authority.
It also include penalty collected without authority.
• law
Illegally collected tax - there is a violation of certain provisions of
or statute.

• col/ect,on.
Erroneously collected tax - there is a law but there is a mistake in
2. The tax has been excessive/ .
3. The tax was Paid by m· t Y or in an~ manner wrong ly collected.
solutio indebiti, the government has t lndebiti). Under the principle of
is ake (so/ut,o
erroneous Payment of taxes. 0 restore the sums represen in

435
 4. Failure to use ex cess ·1 l rhr 7?,, . ~
rr
taxes for the next tax ncorne t
able Yea r ax cred Is
·t ag .
-C:, ., \f!!l, ,je;;
Requisites for Tax R ainst quarterly in
1 Cl · efund come
. aim must be . or credit
a1 NOTE: Ev in Writing
Or en with ·
ny may refund or out a Writt
in, which paymen~redit any tax~; clairn, the BIR C . .
erroneously . Was mad on the face of th omm,ss,oner
or
id 2. It must be
after the p
i:t (Section 2{9
~I appears cle:rlret~rn
with the C ' . RC) Y
O upon
have
3 Sh ayment of th omrn,ssion .
rs
. ow proof of paymenf tax or penalty. er within two (2) years
at
a
h Commencement of th
After filing the adrn~ ~wo (~) year period
file a judicial claim fo inistrat,ve claim for ref
receipt of the denialr ~efund, within 30 days~~! the taxpayer must
e Commissioner. Y th e Commissioner ' or (2~),t~er (~) from
inaction by the
the
e
e
I
Sec. 112-NIRC: Refund or Tax Cred1t
. of Input Vat on 0%-rated sale

Under the Tax Code as amende .

rated sale may be recovered 'throu h an d, input vat _attributable to zero
9 th
the vat registered taxpayer): Y of e following (at the option of
1. Carr~ed-over to succeeding months or quarters·
2. Applied for tax credit certificate· '
3. Applied for tax refund; '

~ion 112 of the tax code applies to refund pertaining to excess or unused
input tax. In the case of '' Visayas Geothermal Power Company v.
Commissioner of Internal Revenue'', dated June 4 2014 (G.R. No. 197525),
the SC outlined the rules with regard to claims for refund or tax credit of
unutilized creditable input VAT.
1. When to file an administrative claim with the CIR
ithin years from the close of the taxable
W 2
I -
Genera I rue
quarter when the sales were made

436
 wit,I ttie cTA:
I c/df{17
tile a Jllrf1n,1 rtial denial of the adrn1nistrar
w11l~n w full or pa 1Ve
2. f om tile d
. I n 30 days r IR - within 30 ays frot11 t
• Witii by the CJR; ?r by the C vided to the CIR to decicte he
~~a1~~se of inac~~~daY period f~~ TRAIN Law (120 days befoori
• . of tt,e under ) re
exp1rat1on rovided for TRAIN Law .
the claim. as pof RA 10963 -
the effect1v1ty . e with the mandatory Period
ornpl1anc d f of
eld that non-c /aim on the groun . o pr~scriptiori
The cow~ uia~al to its refund _c case of full or partial denial of th.
30 day~ istaxpayer's recourse/~naction by the CIR is to appeal Wit~
Th~s, t ~I e CIR or in case ~ h. the 30 day period will render th
claim by , . to appeal wit ,n e
the_ ~TA. Fa,rlur~ unappealable.
dec1s1on fina an

REMEDIES OF THE GOVERNMENT

Distraint

A remedy available to the government whereby the collecti~n of the

tax is enforced on the goods, chattels or effects of the taxpayer including
other personal property of whatever character as well as stocks and other
securities, debts, credits, bank accounts, and interest in and rights to
personal property. The property may be offered in a public sale, if taxes
are not voluntarily paid. Distraint may be actual or constructive.

CONSTRUCT/VE DISTRAINT
The Commissioner of Internal R
of the government, may place und evenu~, to ~afe~uard the interest
a delinquent taxpayer or any t er constr_uct,~e dtstraint the property of
axpayer who, ,n his opinion is:
1. Retiring from busin .
2. Intending to 'e ess subject to the tax
1h ,, ave the PhT1 .
erefrom or to hid 'PPines or to remove his property
3. Intending to P ; or conceal his property
Proceed· e orm any t
from hi~ngs for collecting th ~c tending to obstruct the
· e ax due or which may be due

437
 t
Shall be effe Ced r/ ,
possession by re .
the propertyO~-con_tro1 oi""ing th t
' f/ r
(
/ ! t'l1/ 1'1(/1•,
/.
intact and una:tra1ned an~Uch Prop! ~Paycr or any
whatever with ered and n Obligate h.Y to sign " r p, r•,on hav,nq
out the ex ot to disp irn self to pr ecn,pt cov, rin 1
press autho~~e of the same ervn th,, '.,~rnr.
y of the Corn _,n 8ny rnann ,r
missioner
ACTUAL DISTRAINT

. Actual distraint ,·s resort

delinquent tax or deli ed to u th
JI consists of the seiz:quent reventeo~ e failure of th
to such property in suff~~it the perso~!ay the same !t ~:~s?n owing any
with any increment th nt_ quantity t O property and int time required
the distraint and the ereto incident t satisfy the tax ere$l in or rights
cost of the subs o delinquency ~ ~ th charge , together
Procedures for D · t . equent sale . ' n e expenses of
1s ramt:

1) Stocks and other securitie

warrant of distraint u s shall be distrained b .
manager, treasurer or pan the taxpayer and Y serving a copy of the
company or associatio oth_er :esponsible office~pon the president,
2) Debts and credits shal~ b:h1~h issued the Stocks. of the corporation ,
the debts or havin .
or with his a
. d1strained by leavin wit
gin his possession or under t
h the person owing
3) Bank accou~t~n~h!1~~py of the warrant of distrai~.control such credits ,
e garnished by serv·
upon the taxpayer and upon th . mg a warrant of garnishment
other responsible officer of the ba~/res1dent, manager, treasurer or

•Differe
p, nee between actual and constructive distraint
ri~ure. In constructive ~i~int, the BIR does not take the physical possession
~ personal property while 1n actual dlSlraint ,the personal property is physically

• Basis. In oonstruclive distraint, there is no finding yet of disaepancy, onlylhat the

taxpayer is leaving the oountry or disposing of his property infraud of creditors or is in
~ proooss of liquidation while in actual distrain~ the taxpayer is already delinquent
n the payment of his taxes.
Ditposilion cl the personal property. In oonstructive d~in~ the personal property
merely held as securilY to ansWer for any Mure tax dehnquenaes while 1n adUal.

438
 ne 1 -,ld ,n order to <~ti-11 b- ,_
I' ti y.O I to ..., ';
I 1>rrf)l;rt/
f ifJ,I
I tf i11 , H' I purp<Y,e I'"-> to prr; ';<~
\ i,q,, ,,, di'traint, tt1, rrr.nr,rtio/Jr;fttY.;r.y. JJur,rrr, ~ ,
o< 1 di ✓' , < arc ,J ,.,t✓-.... 4:N~ ...
lri u Jf ,·, Jll , ',Jrr tt ,at th ,r 'ot M->f: amount of c.Je,JUl:::r CJ tr:l1< .,
, nd <-r1', , tjon u,, ed -, 11r
• 1 ,111")( 1 1,, 1, ., ,1J' :· ;J , Jd' ;rrnina dy deterrnin . ·
,1< , ,,,,' '' l
) I
I ,ir,· 1 af1e;r •1 ' '
',< • '\I
'Jr0
f;J/(,:, <
alrea
,,{JUk Jr111)( I tlJC d, 1,1:,i<,n<,,
,J 1d1,1r,,ir1 , • hmenl
u, , and garr11
tw n dHI int, I \/'/ operty tang1'ble or ·nta ·
I ng1~ ~
,ff n< ,,....-j()nal pr ' -, u / •.
. ' ttir, ,,r:vur<; o~ pc . :::nalties. Levy of :eal property rr;•\r·
I J1 1r~ tr ,t rr .fr ;r ,Jf ~J<Jl1 of tafe', ,nclud11 prtt,e government in order to eMr :
JV rr ,r nt l1J dt,,~t\~~rJCrty of tt,e taxpa1er J
personal properties, usual yca~.,';,
ttv. ,17JJr': ,;f,r<>~ ~rnishment is tt,e ::;yer which is in tlle possession of a i1':
r rr, 11 of t.i~~-~n~J by a delinquent i
Jrr of rnonr,, ,
virty.
romise and abatement . . lved b .
Difference befWeen comp ct wt,ereby tlle parties 1nvo , y reaPl"<Xa
Compromise 1s a oontrat end to one already commenced. It invaves
id liti tion or pu an .
uJ11r..r~oons, avo ga . .ity wh'le abatement involves tlle cancellation of thee ·
rr.;<Juction of the taxpayers hab11 ' I
ta/ llabilrty of a taxpayer.

As to the grounds:

Commissioner may compromise payment of internal revenue taxes 'When a

reasonable doubt as tot he validity of the daim against the taxpayer exists·, or \he
financial position of ttie taxpayer demonstrates a dear inability to pay the assessed tax.
Commisioner may Abate or Cancel a Tax Liability, when the tax or any portion there:i
appears to be unjustly or excessively assessed; or the administration and collecfu'l
oosts involved do not justify the collection of the amount due.

439
1,.evY Levy _refers to the s .
-'.lr,d interest
"szit1sfac
. t·ion inf or right s to eizure
s of real p
o taxes d ue uch f pro . roperties
Pert,e f Distraint and
xpayer. Th e property rorn th s or the ~evy are summary
sale if after the sei rnay be offer\ delinquent
18 1~ nature and
voluntarily paid . It zu~e, the ta~et a public
either may be
;,nuftaneously or after t~n be made are not
propertY.
5 e d1straint 0 I before, p~rsued at the
Levy is effected b .. personal discretion of the
prepared by the Co~ wntmg upon a c .. authorities
authorized representativ rn1ss1oner or ;rt1f1cate charged with the
taxpayer and the amou~t!hitng th the na~!
due. from him, a. descr·ipt·ion of th
0

e tax and Penalty

1~~
?ollection of tax
,~dependently or
which. the levy 1s made and · · e property upon simultaneously

ui~~ ~~
•• . :41.. _: • •:1 --..J
Register of Deeds of the .1 giving notice to th
property is located and eprovince
taxpayer.where th!

Forfeiture
Forfeiture of
consequence is a divest·t1oru re ffof pr ope rtY without
thedefault .
. o ense Th fO rf . compensation , ·in
remova o 1xtures of any sort h • e e1ture of chattels and
f f 11
I
or destruction of the specific ~o~ei~eed enforced by the seizure and sale,
property shall be enforced by a jud ~roperty. The forfeiture of real
legal action or proceeding · civil or crfmm·,nenl a, of
as ctohndemnat1on and
e case may be . sa\e in a

Enforcement
A tax lien ofisTax Lien claim or charge on property, whether real or
a legal
personal, established by law as a source of security for the payment of tax
obligations. It is more extensive in scope and is superior to all other

claims or preferences.
In seizure for the enforcement of tax lien, the residue, after deducting
th tax liability and expenses, will go to the taxpayer. In forfeiture, all the
eeds of the sale will go to the coffers of the government.
o. _ as amended by Rev. Reg. No. 30·
7 2001
Reg . N
QNN,tromise (Rev.

440
 n
hi Ill P nd 1
I S rv 1
n Service d

th courts (MTC, RTC, CTA,

A.

CommiSSiOf18'msycompromise any internal revenue tax when·

A rNSOl1Sb,. doubt BS to the validity" .
d the cta,m aga,nst the taxpayer exists;
OI
2 The ffnanoial position of the taxpayer A co pro

-----
(extrajudicial sernc,,....... _.
a "cl8sr inability to pay"
t~e . !axpayer' s criminal
De considered in a tax hab1hty) is co a
lftMt.
. . . . . . . .I . . . . . nature. Hence, ay
be imposed
taxpayer w t
Gier by the consent. The Bl may
of only suggest settlement of
the the taxpayer's liability
lhrough a compromise.
 cASES WHICH CANNOT B
1 Withholding tax ca
· . .
E COMpROM
ses u ISE
provisions of law that ' nless the .
withhold; cast doubt applicant taxpaye .
· · I t on the t r invokes
2 Crrmrna ax fraud cas axpayer·s obligation t0
Internal Revenue or h' es confirrnect a
. . I . I . rs duly a th s such by th C
3. Crrmina v10 at,on alread . u orizect r e ornmissioner of
4. Delinquent accounts ~ fried in court· epresentative;
t . Wrth d I ,
paymen s, u Y approv d
5· Cases· where final rep 0 rt s of r · e schedule of installment
been issued resulting to r ~investigation or re . .
taxpayer is agreeable t eduction in the original ~~ns1derat1ons have
agreement form for the p o such decision by sig ~essrnent and the
Cases which b .urpose; ning th e requ ired
6. ecorne final and
co~~· where compromise is re executory after final judgment of a
val1d1ty of the assessment; and quested on the ground of doubtful
7. Estate tax cases where c . .
financial incapacity of the taoxrnprom,se is requested on the ground of
payer. .

Minimum amounts for Compromise S ft/

■ F . e ement
0~1 coafstehs obf f1~ancial incapacity, a minimum compromise rate of
10 10 e as,c assessed tax·
• For oth~r cases, a minimum c~mpromise rate equivalent to 40% of
the basic assessed tax.

Compromise versus Abatement

A compromise is a contract whereby the parties, by reciprocal
concessions, avoid a litigation or to put an end to one already
commenced. It involves reduction of a taxpayer's liability. On the other
hand, abatement is authorized when the tax appears to be unjust or
excessive.

. ·1 Act1on.
CIVI · It 1s
· reso rted to when: f ·is to file an administrative
1 A . ed and the taxpayer a1
. tax ts ass_~ss re uest for reconsideration or reinvestigation
protest by filing a q . t f the assessment;
within 30 days from rece1p o t ,·s filed by the taxpayer but the
2. A protest against th~ ~ssess~~~ in whole or in part the said
Commissioner's dec1s1on de t~ gcourt of Tax Appeals within 30
t appealed to e
protest, was n~ f such decision.
days from receipt 0

442
 of taxes shall be filed Without ~~. .
th<· rec 0 verY
v,t .re, I,on for , . s1oner.
comm1s
No r, l of thu
,Jf) r)rovnl

tlon nly f o r collection · dtaxes but ai So

h of
cr1m1nal Ac orted to, n_ot o f all sorts. T e JU 9rnent in lhe
fon is ros enalt1es o lty but shall also Order th
cmninal "\' of statutory -~pose the pe~acase. The crirnina1 liab;rt
for ,,nforccmc;hall not on_lyc: of the cr~m1nah,·s civil obligation to Pay t~ y
1 case subJe t,sfy ·I q)(
comma f the taxes debtor to sa
payment on failure of the atisfaction of a tax liability w1I not operate Io
arises upo bsequent s_ .
e the su . J 1iab1l1ty.
::i~~~ish the crim1na d even without pri~r assessment or
faint may procee ed that a crrmmal complaint is
The criminal co~px It must be stressnalize the taxpayer for violation
computation of th~:nd payment but to pe
instituted not to de
of the Tax Code. .

. T Collect,on . . . .
No ln1unc
. h
t,·on to Restram uthonty
ax . tO grant an mJunct,on· to restrain the
N
o court shall .have
t alt erevenue
a tax ' fee or charged
. . imposed
d' by the
collection of any rn ern . . of the Commissioner rs pen 1ng appeal
N/RC, except when the dee:~~: the said court may enjoin the collection
before
of taxesthe of Ta~ App
Court collect1on
if such . 'opardize the interest of the government
w,.11 Je
and/or the taxpayer.

TAX CREDIT CERTIFICATE (TCC)

May be applied against any internal

1. withholding revenue tax except
taxes,
2. Original copy is surrendered to the revenue office,
3. No tax refund shall be given resulting from availment of incentives
granted by law where no actual payment was made.
Forfeiture of tax refund/tax credit
1 F0 ,ti ·t ·
· e, ure of refund 1n favor of the government when a refu
;hec\ or warrant remains unclaimed or uncashed within nd
ears ram date of mailing or delivery. 5

443
 2. Forf~i_ture of tax credit -
unut1llzed after 5 years
unless revalidated, and
internal revenue taxes
amount covered by the
fund.
a tax credit certificate which remai~s
from date of issue shall be invalid
shall not be allowed as payment for
liabilities of the taxpayer, and th e
certificate shall revert to the general

validation period of recs . ..

~e A TCC may be revalidated prior to the expiration of its validity
period. h
r:r The revalidated TCC shall be valid for a period of 5 years from t e
date of issue.

444
 f the co rrect answer
th letter o. 9 oing over, or scrut,r i / , ,
cnaose e xamining, rtain the correctn,, .•.. ,if,
cHOICE- rocess of e ayer to asce
r,1UL T/LPLf: is tned~ of the tax~axpayer. assessment
~recor .d bY the b tax ·t
books an d and pa1
1.
t/18 dee/are essrne nt notice d.. tax audt
o,e tax . 1·nary ass .
a. pre/1mr of au thority thonze. d by law 1n ascertaining
c. tette n officer au m a taxpayer.
ffjcial action of:der the law fro
2.
It is the o of tax due u
mount t· e b.
tax assessment
.
the a rnent no ic d tax audit
re/iminary a ssess
. .

a. /Ptter of authority Revenue Officer to exam ro

c e owers a th ' .
o a yer's correct internal re ie . . "V~
It · nt that emp f ccounts and o er accourt ,
3. and,·s an official
. . docurneayer's
a taxp
scrutinize t determine
books
the taxpa
· order O
1 t
record~ .. _n b. tax assessmen
tax liab1/1t1es_. . assessment
a. preliminary
notice .
letter of authority d. tax audit

4 c. · 1·ven to a taxpay er informing

· · him oft the find1°gs
· d :'
It is a written notice 9 . 0 a deficiency m his tax re urn, 1n ,ca ·;
· the BIR officer(s)
I relating tt which the assessment 1s made a~:
nd the fac s on • h
therein the aw a nd within a given period , ot erw,se ··,
or his tdou1r~es~~thorized
requiri~g _the taxpay~r
Comm1ss1oner . representative shall iss e 2·
assessment based on his f1nd1ng_s.
a. preliminary assessment notice b. tax assessment
c. letter of authority d. tax audit

5. Preliminary assessment notice is not required in the following excep

a. When the finding for any deficiency tax is the resul·
mathematical error in the computation of the tax appeari g
the face of the tax return filed by the taxpayer.
th a discrepancy has been determined between I e ·a,
b. When
w, he/d and the amount actually remitted by the with ol ,
agent.
1
c. When a taxpayer Wh
0
excess creditabl .th opte~ to claim a refund or tax ere
determined to ha~ew, ~olding tax for a taxable perio
earned over and automatical y applle

445
 r;~fcr/
/
.
-r..._l' C/'Cl ,i('1
'/Jti( l\[__ll/tt(Jt
•/) / ~
same amount claimed .
the taxable quarter or ~gainst the estimated tax liabilities for
d. None of the above q arters of the succeeding taxable year.

VVhich of the following statements .

6, a. If the taxpayer to b ~s co~rect?
National Office th el auct,ted ts under the jurisdiction of the
Regional Direct~r. e etter of authority shall be issued by a
b. If the taxpayer to be audite . . . . .
regional offices th d ts under the Junsd1ct1on of the
I
Commissioner 'f e etter of authority shall be issued by the
0 Internal Reven
c. Both "a" and "b" ue.
d. Neither "a" nor "b"

7, The prescrtiptive period for the issuance of a formal notice of

assessmen may not ordinarily be stayed because of the lifeblood
theory. However, there are certain instances where the running of the
prescriptive period may be suspended. Which among the following is
not among the recognized exceptions which suspend the prescriptive
period within which to assess?
a. Where the taxpayer requests for and is granted a
reinvestigation by the Commissioner;
b. If the taxpayer is out of the country;
c. If the taxpayer ,changes his address informing the
Commissioner of such change .
When the Commissioner of Internal Revenue ,s prevented
d. from making an assessment and within 60 days thereafter.

hich of the statements regarding collection of tax assessment is

8. W
incorrect? f assessment .
a. Within five (5) years ~om ase there is no assessment and in
b Within ten (10) years inc t s with intent to evade the tax.
· f audulent re urn
case of false or r b. Both I and II
a. I only d. Neither I nor II

c. II only the prescription for violation of

. rutes governs
9. Which of the following - violated and if the
? day the 1aw 15 f
the Tax Co d e. . . tarts from the the discovery of viola 10n
1st Rule· Prescnpt1on s . t·on starts from
· prescnp 1
same is not known '
thereof.
446
 ,,.-- . / t't'I r/1t~~ '//; l' Rc111ec{_
( /;/11/lt'I l 1 ( ',<

I . f the Tax Code shall Pre .

Scribe
·ons of anY provision o
. All vio/atr

,~:h
2"d Rufe.
after 10
ect
rules are ~~~rrule correct
a. 1st rule wrong, wrong
b. th rules are 2nd rule wrong
c. bo orrect, . .
d. 1'' rule c ent or declaration filed by a taxpq
t X return, statem ded within three (3) years from tter
"e
10. Statemen t dified,
1· A achange d o r amen
may be n:10
date of fil,ng. th rity or investigation of tax retur
tt
2· When a le er of au o
actually serve d upon th e taxpayen,
Statement . declaration has b~e~ longer be allowed. r,
statement or h return sha n
amendment of sue

1 & 2 are false

a. statements . e but statement 2 is fa 1se
b. Statement 11 !s ftarulse but statement 2 is true
Statement rs
c.
d. Statements 1 and 2 are true

. statements is incorrect?
11. Which of the fo//o~rnt~ e period of three (3) years commences to run
a The prescrrp rv 'b d b
· after the date the return is due (last day prescn e y law for
filing) or filed, whichever comes later. ..
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
shall be counted from the day the return is filed.
d. If the return was amended su bsta nti ally, the period starts from
the due date of the return.
2
1 . tax
Which ot_the
audit following prescriptive period for the 8.1.R. to conduct a
,s correct?
a. Ten (10) years when no return is filed
:· J~~i
.
10
(J)Years When return filed is false or fraudulent
Years from actual fT f
for filing if the ret fil . 1 mg o return or from he dead e
d. All of the above urn , ed is not fraudulent.

447
 13·
Mike filed his 2015 In
·1 1 2
Co/er ~ cises -
come T
7,u-c
P..
., ~
I.
on Apn , 016. The Iast d ax Return and ·
send a~ assessment is ay for the Bure paid the tax due thereon
a. Apnl 1, 2019 au of Internal Revenue to
b. April 15,2021 ~-Ap~15,201g
. Apn1 15, 2026
14 . jhe following are related tot
Date when assessrnent ax assessment O f
r petition for reconsider t'Was received a taxpayer:
BIR d~cision of denia1:1on Was filed with the BIR Oct. 1, 2014
2nd Request for reco _as received Oct. 9, 2014
BIR ns1deration was filed with the July 2, 2015
Date revised assessrnent July 15,
Was received 2015
· July 5, 2016
The last day to appeal to t
a. July 15, 2016 he Court of Tax Appeals is on
c. August 6, 2016 b. August 4, 2016
d. September 5, 2016
15. Assume the following information
Date of tax erroneously paid
Date of ·claim for refund was filed w·1th BIR June 10, 2015
D t f BIR March 3, 2016
aeo decision of denial was received April 5, 2016
Last day to appeal to the Court of Tax Appeal is on
a. June 8, 2016 b. March 3 2017
c. June 10, 2016 ' d. May 5, 2016

16. A taxpayer filed an income tax return for the calendar year 2014 on
March 10, 2015. The BIR issued a deficiency income tax on April 10,
2016 which has become final. When is the last day for BIR to collect?
a. April 10, 2021 b. April 15, 2020
c. April 15, 2018 d. March 10, 2018

17. A taxpayer receives an assessment notice on January 5, 2015. He

files a motion for reconsideration with the BIR on Janduary 15, t20t15.
b ission of complete acumen s o
When is the last day for the su m . ?
support his motion for reconsiderat1~n January 15, 2017
a. February 4, 20 15 d. None of the above
b. March 16, 201 5 ·

448
 L~,it,/,
1://"' L,1 .
lC
£L,ern:.Se.s -
L
7-;_z, Re,
"'-!._
~-
1{c ·
~\

ar corporate taxpayer's
f a calendar yent income tax return on Frebcore1s
examina
tion o
d •ts final a
d1·ustme fil d e rl..J
bsequently I e an amended ar-y
18. :;ows that ;~ fil~o1'1 income . lt;~e has the BIR within Which tor~tlJr~
14, 2012 for ,t~o12. Up to wha~ a letter of demand? isslJe
on March 17, ment notice an c April 15, 2015
a formal asse~~ 15, 2015 d: March 18, 2022
a. Febru 2015
b March 18,
· Return (ITR) for taxable year 2
. I me Tax . d th 013 on
·nario filed his nc? i ation, it was d1scovere at the tax .
19. Apo/12 2014. After an rnves; g the BIR to send an assessment· Paid
May , Th last day ,or .
was deficient. ~ May 2, 2016
17
a. April 15, 20 ~- April 15, 2016
b. May 2, 2017 ·

13 1 0 Tax Return (ITR) on April 10, 2014. On

20. Ana filed her 20 ;~ ;aen amended return which is substantially
June 20,}014t,hsehoerig' ~al return. The last day to release, mail or se'"'d
different ,rom ,,
an assessment is-
a. April 10, 2017 c. June 20, 20 ~~
b. April 15, 2017 d. June 20 , 2 0

21. A taxpayer disclosed to you the following information:

Date of filing the Income Tax Return: Mar. 28, 2012
Date assessment was received: June 20, 2014
Request for reinvestigation was filed: July 4, 2014

_The last day for the taxpayer to submit relevant supporting docume t
IS nS
a. September 4, 2014
b. July 20, 2014
c. September 2, 2014
d. April 15, 2015

22. In question number 21 .

documents supporting ·h:ssum.mg th at the taxpayer submitted the
Internal Revenue should a~otton on August 26, 2014. The Bureau of
a. Se~tember 26, 2014 on the protest not later than
b. Apn11s,201s
c. February 26, 2014
d. February 22, 2015
 ( ;~fer I..:.- "er .
. E3as don the number /
2 protest , the last day fo 21 · assuming th
r! Cl-<Se:s - 74(!; R,____~-
·
Appeals is r the taxpayer t at the BIR did not act o
a. March 22, 2014 °
appeal to the Court of ~::e
b. March 24, 2015 c. March
23 , 2014
d A
· Pril 15
use the fo/lowin data for th , 2016
income tax return for 20 11 we ne~t three 6 ue .
,axshown on the return wa:~
filed April 2, 201 ~ftons:
Tax upon audit Was P 6,000 Which w . .
Assessment ford t· . 10,0oo. as Paid upon filing.
e 1c1ency· .
. Apnl 12,2014
24. Last day to send not· ·
a. Apn ,·1 2 20 15 ice
c A . of as sessment is_
b. April 15, 2015 . Pnl_ 15, 2014
d. Apnl 12, 2017
25. If no assessment wa
collec_t by judicial proceedfn;ai~~· the last day for the government to
a. Apnl 2, 2015 c Ap ·1 15
-
1
· n 2015
b. Apn 15, 2014 d. April 12', 2015

26. When is the la t d

distraint? s ay for th e government to issue warrant of
a. April 12, 2017 c. April 1S, 2015
b. April 12, 2019 d. April 15, 2019
27. If assessment or judicial action was made on- April 20 2015 th
defense of the taxpayer is: ' ' e
a. He had paid the tax on time.
b. He had paid the correct amount of tax.
c. The right of the government to collect had already prescribed.
d. There was no cause of action from the very beginning.

28. If the BIR discovered on December 1, 2013 that the taxpayer had
filed a fraudulent return, the last day to send an assessment is
a. April 15 2014 c. December 1, 2023
b. December 1, 2016 d. April 2 , 2021

Suppose the BIR discovered on November 1. 201:1 that no return

l'dly
I
make an assessment un 1
led. The BIR can vac Novem ber 1, 2016
115, 2014 . A ril 2 2021
NOwanr,oer 1, 2023 d. P '

450
 ·on made on January 15 20
dona t1 • • 1()
, t,turn for d y for BIR to assess 1s on? wil1
1 ,0 1 1·,;/11, 201 O L, s~e~ruary 14, 2013
0. filed on /,1rHYJ•;8, 2013 de January 15, 2013
l 11, ll 1 2013 .
t . J •,n ,1 rY ' me the return filI e d was frauctu\
don no 3 , 31 2010. The Ias t d ay f or Bl R to asent an~
0 but assu
Bdi s ov ,,. d on March , ses"~ ,~
1.
w? c February 14, 2020
on F b uary 28, .7020 d. March 31, 2020
8· 31 2020 ·
b. Jan ry ·
; oate the estate tax was filed: Jun
2012
32. Date of eath : March 2h, Bureau of Internal Revenue to rnake 1Q
12· st day for t e . . e an
20 , d ficiency estate tax.
assess ent for a e A ·1 15 2015
2 2015 c, pn l
a Ma~ · d September 2, 2015
b. Apnl10, 2015 ·

33 The last ciay to file an amended return is

· a Mar 2 201 5 c.April 15, 2015
b: June 10 : 20 15 d. September 2, 2015

34. When a axpayer erroneously paid a tax in installments, the

prescrip ive period for a claim for refund should be counted from the:
a. a ate of payment of the first installment.
b. ate of payment of the last installment.
c. .ast day required by law for the payment of the tax in one
I mp sum.
d. one of the choices.

ription of check or warrant refund or tax credit shall be

a. years from the date of issue

b. 1 years from the date of issue
c. years from the date f .
d. 1 years from the date oaf ~ssue
issue
36. The follo in r .
_ taxe s, ex eptg emed1es are ava,·1 able to the government to collect
a. straint and le
b. I uiring int vy
o bank deposit
accounts of taxpayers

451
 cCtto·
/ · _ ~~
E(i:crcue.s L ~ ~
7:'n,
~ e. (,.
a
c. Entering into cornprorn·
d. Enforce ent of fort . ise of tax cases
e1ture of property
,he following ar administrat·
31· connect·10 n with o II ect1on
• of tive remedi es available
· to a taxpayer in
a. Filing of laim for ta axes, except one
b. Filing of etition for x refun? or credit
c. Filing of riminal co:~o~sider~tion or reinvestigation
employ es p amt against erring BIR officials or
d. Entering into a com pr om1se
.

38 . Which of the foll wing is incorrect?

a. A tax as essment is n . . .
willful at tempt to d f ecessary to a cnmmal prosecution for
b A convi tion for ta e eat ~nd _evade payment of taxes .
· t x evat1on 1s not a bar for collection of unpaid
axes
c. Crimin~! proceedings under the Tax Code is now a mode of
collect,o of lnt~rnal Revenue taxes, fees and charges.
d. If the ta .payer 1s acquitted, it does not exonerate him for his
civil liability to pay the taxes.

39, Statement 1: A tax amnesty that forgives tax delinquency of prior

years is a legislative act of the government.
Statement 2: A tax compromise that lowers the delinquent tax due
from a taxpaye is an executive act pursuant to a legislative grant of
power to the Ex cutive Department of the government.
a. Sta tern nts 1 & 2 are false
b. Statem nt 1 is true but statement 2 is false
c. Statem nt 1 is false but statement 2 is true
d. Sta tern nts 1 and 2 are true ·

40 St t t 1· T e Commissioner of the Internal ~evenue has the sole

. a emen • lties an/or interest.
authority to aba e or ca_nce_l ta1~~=~:tem~nt or cancellation of tax,
Statement 2: T ~ applicationuld be acted upon by the processing
penalties, and/ r intereSt sh~ receipt of said office, and the BIR
office within fiv (5) d~ys fro da s within which to act on the case.
National Office
3
as th1 rtY ( 0) Y
t 1 & 2 are false
a. Statem n s . but statement 2 is false
b. Statem nt 1 ,s tfrul ee but statement 2 is true
t 1 is as
c. Statem n d 2 are true
d. Statem nts 1 an

452
 ,,... / r,'r{'l:"fef
(>if/A/1'/ l

Reven ue cannot:
. of lnterna 1
omm1ss1oner ncel tax l1abll1~\ernal reve_nue taxes.
1. The Abate or ~a payment of in ously or tllegally collected.
romise errone I t· ·t I
b comp
Credit or ~e
fund taxes
riminal aspec
t of tax vio a ions' a ready fil .
ed ll'l
~ compromise c
court · d?
t be cornprorn1se .
4 th following may no
2. WhicH of l e uent account~ t· e protest after issuance of the p·
De 1nq d ·n,stra 1v . d' . 1na1
ba Cas es under assment
m, to the taxpayer sll 11 pen ,ng in the 810~
Notice of Ass~ · uted.
c. Civil cases
. being drsp where there is no doubt on the
tax cases
d. Withholding . tion to withhold.
taxpayer's obl1ga

. be entere d m• to based on the following

t ground:
43. comprnm,se may l'dity of the assessmen .
1st round: Doubtfu I va I •
z1a1~round: Financial incapacity
Both grounds are correct.
i.·
Both grounds are inc?rrect.
c. Only the first ground is c?rrect.
d. Only the second ground ,s correct.

44. Which of the following offer to compromise a delinquent account shall

be accPpted on the ground of reasonable doubt as to the validity of
the as essment?

I. The taxpayer failed to file an administrative protest on accounl

of the alleged failure to receive notice of assessment.
II. The taxpayer failed to file a request for reinvestigation or
reconsideration within 30 days from receipt of final
assessment notice.
II I.
he taxpayer failed to elevate to the Court of Tax Appeals
CTA) an adverse decision of the Commissioner of Internal
evenue.
a. I, II, and Ill
c. and Ill only
b. I and II only
d. I only

453
 r;Cyr fer -

45
· statement 1: C 1·rn1· nal ·
those already fi ed . violation
r
cl't'l"( ' I M, '. 1 rZ..., , ,n ./4
4C /":hi e u .,
statement 2: c imi~ court. of NIRC may be .
those involving raudal violation compromised even
a. Statem nts 1· of NIRC may be corn .
b. Statem nt . & 2 are fal promised except
1 is tru se
c. Statem nt 1 . e but stat
d. Statem nts 11s false but sta~rnent 2 is fal se
and 2 are trueernent 2 is true

46. Which of the fo low· .

penalties? ing violations cannot b
a. Failure • kee e subjected to com promis
0 I
records p preserve book e
b. Fa,·Iure to keep b s of accountsand accounting
languaqe or in E oo~s of accounts of .
c. Failure to h nghsh. records ma native
ave books f
~ta tern mts attach o. accounts audited .
independent CPAed to income tax retu an~ _have financial
d K • . rn certified by

. . eepm~J two sets of books of accounts or records.

47. th
Which of the following offer to com . a_ d_isputed assessment on
e ground of rEeasonable doubt ~rom,se
may be accepted? as O th e vahd,ty of the assessment

I. Jeopar~ y assessment
111II. Arbitra n assess men t based on presumption
A ~
~ no~ice allegedly failed to com~ly,with ~o;!:~~es
. ssess ent issued on or after Januar 1 199
dema~
prescn ~ed in the tax code
b. I and 11 only
a. I, 11, an Ill
d. None of the above
c. I and II only
48. A tax assessm nt made by an Authorized Revenue Officer without the
benefit of com lete or partial audit, in light of the RO's belief that the
assessment a cl collection of a deficiency tax will be jeopardized by
delay caused the taxpayer's failure to comply with audit and
investigation r quirements to present his books of accounts and/or
pertinent recor s or substantiate all or any of the deductions,
exemptions, c;edits claimed in his return.
0
a. Jeopar y assessment .
b. Arbitra assessment based on presumption

454
 /' El (_'/Y'{~\· { ';._f - 7:t_ l , Ru, /'
Cidf1£e/ L lc<{1~,

/ or after January 1, 199

ment issueddolyn failed to comply With
8
assess . 11ege
Arbitrary d notice a tax code.
,:;. where deman cribed in the "Best Obtainable Rule"
$ rrna/ities pres de based on
,o ent ma .
d Assessrn entage of compromise in ca
. inimum perc se Of
escribed m ent? .
What is the_P~ of the assessm b. 20% of the basic tax as
49. doubtful val1d1t~asic tax assesseJ d. 10% of the basic tax asSesse,
40% of the . tax assesse sess~r1
a. 0 f the basic \j

c. 30% d f the taxes or penalties shall be

t 1· No ere , d't orrefun° · ·
fl1 sin writing w,t
h th e C omm1ss1oner
· ·
50. State~e~nle~s the taxpayerh. etwo (2) years after the payment of ~
allowe d 't r refund wit ,n
claim for ere ' o 1e
tax or penalty. fl d showing an overpayment shall be
Statt~ment 2: A ret~rn , el ,·m for credit refund.
. d a wntten c a
considere as & 2 are false
a1. Statements1 ~ t e but statement 2 is false
b. Statementt 1 !s far~se but statement 2 is true
c Statemen is
d: Statements 1 and 2 are true

51. Statement 1: Internal revenue taxes shall be assessed within three

(3) years after the due date.
Statement 2: Internal revenue taxes shall be assessed within three
(3) yeiars from the day the return was filed, where a return was filed
beyond the due date.
a. Statements 1 & 2 are false
b. Statement 1 is true but statement 2 is false
c. Statement 1 is false but statement 2 is true
d. Statements 1 and 2 are true

52. What onstitutes prima facie eviden

a. A substantial under dee/ c: of a false or fraudulen re ?
re~eipts as determined b a~at,on of taxable s le nc
b. Failure to report I . y t e BIR comm; ioner 0
de I sa es 1n an a
cared Per tax mount exceed, 9 30
decla.ration of sales return cons ; u e
c. A claim of ded . .
deduct; uct,on in an
d on constitut am n
. All of the above. es o er'. ta e e 0
 cCtZlcr E . /,
SJ· Which of the following c / -cerc,«u - '{'1(: ~e,(,ie,;
fax Appeals ases falls With·
a. Crim al action f . in the jurisdiction of the Court of
Cod . or v101 at·ion of the .
b. Que ion of Wheth National Internal Revenue
asse sment u er or not to i
c. Appe I from u~~~ a~axpayer. rnpose a deficiency tax
)f
d. Actio '.l for refund P ted tax asse
b k of real ssrnent
54. The oo s o accounts must property tax. .
a. Any I anguage de ~e kept in
b Engli c,h I pe nd ing on th
c.· Nativ I anguage only e preference of the taxpayer
anguage or E .
d. Nativo language E n_ghsh only
, nghsh or Spanish
55 · The seizure ~ y the gciver
paymen. o t"' xes followednment
t f b of p~rsonal property to enforce
voluntarily p id is called: y a public sale, if taxes were not
a. Distr~aint
c. Lev · b. Forfeiture
d· None of the above

56. Which of the allowing cases falls •th . th .

Tax Appeals1~ wi tn e Jurisdiction of the Court of
. ~: Crimi _al action for violation of the· NIRC
Ques ,on of whether or not to impose a deficiency tax
asses·sment upon a taxpayer
c. Appe t from undisputed tax assessment
d. Actio ~ for refund of real property tax.

57. The distinctio between actual distraint and constructive distraint is

that:
a. Actu I distraint may be made on the property of any taxpayer
whet er delinquent or not while constructive distraint is made
on th property only of a delinquent taxpayer . . .
b. In ac ual distraint, there is a taking of pos sess1oh~b· ·twdh1~e in
1
const uctive distraint, the taxpayer is mere Y pro , , e rom
dispo ing of the property •
d' t . t is affected by requiring the taxpayer to sign a
c. Actu is ain rt or by the revenue officer preparing and
t of the prope Yd. t ained property or by service of a
list of the 15 r.
t of distraint or garnishment
d. r not given.

456
 r - Ert'n·,~ft.'..i - 7/;e_l' /\f!,,<,,[
{/4.1/cl L (c·1

.
15 alleged to have been
·nternal re venue tax
d the taxpay er should first:

58. w,,~:ously or
erro
::ii
anY nati_o;•~:/y collect:, credit e ional Trial Court
for refu~!nd with the ~o~rt of Tax Appeals
File a c tion for re
a. p·1e an ac . for refun
d with the
b ' ct,on
1 an a
. F'/e ven
1

dc. Ans wer not 9 •

se o f a tax erroneously
rt .Collected-
I .
· ect? In ca . d with the cou sImu taneau
. h statement is ~~ind may ~e
59. Whiz A case for r of a claim o/~:fimd with the Bureau .of Inter~~
· with the filing . d with the court even without filin
Revenue f nd may be file
of re u . h the Sure au of Internal BRevenue g

a c1a1_m~~r
b. A case r refund wit be filed with the ureau of Internal
refund must _first of the Bureau must, under any
c. Revenue
A claim and be awaited before a case for refund may be
a dec1s1on
circumstance, .
fl d with the court
A f t be filed with the Bureau of Internal
1elaim for refund mus~ ,rst·on a case for refund may be filect
d. c · en s,tua 1 ' · f th B
Revenue,
with in awithout
the court giv awaiting the decision o e ureau.

. e admm1stra rv e remedies available to a tax payer in

60. The following_ ar t'. .n of t·taxes, except one:
connection wrth col/ec ro d ·t
a Filing for tax refund or ere. ' . . . . .
· .. 1
t"tion for reconsrderat,on or reinvest1gat1on.
b. F,ltng ape
C. • • • BIR tt· ·
Filing of criminal complaint against ernng o IcIals or
employees.
d. Entering into a compromise.

61. Pre-assessment notice shall not be required except:

error. for any deficiency tax is the result of

When the finding
mathematical

When the finding of discrepancy has been determined

between
the the taxagent.
withholding withheld and the amount actually remitted bj
th
Paid.
c When e excise tax due on imported articles has not been

d :~~~!~ value added tax due on imported art1c es has nc

457
 62• Which of th~ foll Wing is _c~er E.t.erci.oe,s - T'Y!: ~ h i~
a. To inquire in ba k W1th1n the auth .
t .
b. To erminate
n depo ·t
taxable
onty of th
. s1 account e BIR Commissioner
c. To prescribe real Period s
d. All of the ab e property Values

63 . following are th Powe

a. To make asse rs of the BIR Corn . .
for tax a mini ssrn_ent and prescri~1ss1o~~r, except:
b. To obtain infostrat,_on and enforce; ad_d1t1onal requirements
t f rrnat1on and t ent,
;s im~ny of persons; o surnrnon, examine and take
c. o reg 1st ... rand ace .
d. To prom ulgate tax 1 ~6:)~~ tax agents;

64, The authority

. . o the Sec re t ary of Fina
. .
CornmIssIoner ofi Internal Re nee, tn conjunction with the
_ venue, except"
a. T o promu Ig e all needed I .
enforcement of internal re rues and regulations for the effective
b. To issue rule•s and regula~~~~e laws cannot be controverted.
and rulings dese ' as well as administrative opinions
rve respect by the court
c. Both a and b ·
d. Neither a or tp

65. Statement I - T BIR is authorized to issue a warrant of garnishment

against bank ac ount of a taxpayer for the collection of an assessment
despite the pend ncy of protest against tax assessment.
Statement 11 - A ~ assessment is not necessary before a taxpayer may
e prosecuted for willfully attempting in any manner to
vade or defeat any tax imposed by the NIRC.
a. Statements I and II are false.
b. Statements I and 11 are true.
c. Only statem nt I is false.
d. Only statem nt I is true.
. ditions the Commissioner of BIR may be
66. In one of the f lowing con tax'liability: .
authorized to ab te ~r cancel allection costs involved do not justify the
a. The admini trat1on and co .
collection o the arnoun~ due. to the validity of the claim against
A reasonab e doubt exists as
the taxpaye ·

458
 c,t;
r ff qermes - r~
f the taxp
ayer demonstrates
«__'
a I
c eat
. I position oed tax.
financra the assess
The paY
c. · bilitY to e B
ma t the aboV is true? The ureau of Intern
d. All o . statements nd i:11
. h ofthe followinga com missioner a
67. Wh1c shall have mmissioner
R,evenue 1 deputy co missioners
a. ty com . r
b. 4 depu mmiss1one
3 deputy co mmissioner
c. 10 deputy co . .
d. .. f the Comm1ss1oner to reduc e
· g are the authorities o
68. The fo/low1:s, except: t of any internal revenue tax When a
revenueCom bl e doubt as to the validity of claim against the
tax promise
a. reasona the paymen

taxpayer exists. a men! of the internal revenue When the

compromise
b . financial the Pof~he taxpayer demonstrates a clear ability
cond1t1on

to pay asses_sed_tax.
Abate tax ltab1/1ty when a portion thereof appears to be
c. unjustly or excessively assessed.
Credit or refund taxes erroneo_usly or illegally received or
d. penalties imposed without authority.

69. statementt: The Commissioner of Internal Revenue may, at any

time, order inventory taking of goods of any taxpayer in order to
det ~rmine his internal revenue tax liability;
Statement 2: The Commissioner of Internal Revenue, after
corr parison with other taxpayers in similar business, may prescribe a
min mumunder
taxpayer amount of gross receipts, safes and taxable base of a
investigation;
a. Both statements are correct·
b. B_oth statements are wrong''
statement is correct, but second statement is wrong·
c. ;1rs: st
d. irs atement is wrong, but second statement is correct:

459
 r;C;,(
I <
.. 1-
I
.
-l1 ·,•1 ·0 .1,·.1
rz_J ,n 1.
,I( /\{!!U£UC.S
statement 1: A rad er or rnan f
70. the Bureau of I ~ternal Reven u ac~ur~r must submit an inventory list to
ccounting peri d; ue w, th ,n thirty days after the close of his
~tatement 2~ T e Cornrnissio
the method of ·nventory Yalu ~~r of Internal Revenue may prescribe
once only eve three years. a ion of a taxpayer, but he can do this
a Both st tements are co
· rrect·
b. B?th st 1tements are wrong·'
c. First st ement is corre t b
d. First st ement is wrongc 'buuttssecondd statement is wrong;
, econ statement is correct.
Wh ich of the following violat' .
71, penalties?.
. ions cannot be subjected to compromise
a. Failure to keep/preserve books of accounts and accounting
records.
b. Failure to keep books of accounts of records in a native
language or in English.
c. Failure :o have books of accounts audited and have financial
statements attached to income tax return certified by
independent CPA.
d .. Keepin~1 two sets of books of accounts or records.

72 . Books of accounts to be used by a taxpayer for his existing business

must first be approved by the
BIR when?
~ Before the end of taxable year.
. 0d before the start of the last quarter.
b. 1 ays th f th 4th month following the close of the
C. on the ·15 day O e
taxable -year.
d. None oi· the above

nal Revenue· cannot:

73 The Commissi ner of Inter . bflit
. Abate o cancel tax ha f _Y ternal revenue taxes.
a. • e payment o in . gaily collected.
11
b. Com~r m1sfund taxes erroneously o~ '1!uons if already filed in
c. Credit r re . . I aspect of tax v,o
d. Compr mise cnmma
court

460
 c~rv~ Eev~aje.'.,- - 'l;r: 7' e~,e/
'/7-- ~_.(-
owers of the BIR, except._ . a
The fo//owin9 are the P d collection of all national internal
74.
a. 'The assessment an . . re v&
!:.
/taxes. . f .udgments ,n all cases decided in ,t "
The execution o a 11 1 s fav
b. d the ordinary courts. . or b
the cTA an ent of all forfeitures, penalties and fines I
rhe enforcem conn
c. with national internal revenu_e taxes. ecteQ
The assessment and col/ect1on of some customs duties .
d.
When may the BIR terminate the taxpayer's taxable year?
75 · I. When the taxpayer is retiring from business subject t O
11. When the taxpayer intends to leave the Philippines lax
111. When the taxpayer r~moves his property from the Ph · . .
IV. When the taxpayer hides or conceals his property ilipp1nes
V. When the taxpayer performs any act tending t O
proceeding for collection of taxes obstruct
a. Ill and IV only c. Any of the b e
b. I, II and IV only d. All of the a~o~~e