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NOT SUBJECT TO COMPROMISE

1. Withholding tax cases unless the


applicant- taxpayer invokes provisions of law
that cast doubt on the taxpayers obligation to
withhold
2. Criminal tax fraud cases confirmed as
such by the CIR or his duly-authorized
representative
3. Delinquent accounts with duly approved
schedule of installment payments

4. Cases where the final reports of


reinvestigation or reconsideration have been
issued resulting to reduction in the original
assessment and the taxpayer is agreeable to
such decision by signing the required
agreement form for the purpose.

(Note: Regional Evaluation Board may enter


into a compromise on:
a. Assessment issued by the Regional Officers
involving basic deficiency taxes of P500,000 or
less; and b. Minor criminal violations,
discovered by regional and district (See Section
7(c), Tax Code)

5. Cases which become final and executory


after final judgment of a court where
compromise is requested on the ground of
financial
Incapacity of the taxpayer ( Sec. 2 , RR no. 302002)

6. Estate tax cases where compromise is


requested on the ground of financial incapacity
7. Criminal violations already filed in
court

MINIMUM AMOUNTS FOR


COMPROMISE
SETTLEMENTS
1. For cases of financial incapacity, the
minimum compromise rate is 10% of the
basis assessed tax.
2. For other cases (including doubtful
validity), the minimum compromise rate is 40%
of the basic assessed tax.

Note: The Evaluation Board ( composed of


CIR and 4 Deputy Commissioners) shall
approve the settlement if
a) the basic tax involves >1 million or
b) the settlemet offered is < the prescribed
minimum rates

The CIR alone has the power to compromise


or abate tax liability. The power is
discretionary. However, he should consider the
pecuniary interest of government,
considerations of justice, equity and public
policy.
Tax assessments issued by regional offices
involving basic deficiency tax of P500,000 or
less and minor criminal violations discovered
by regional and district officials may be
compromised by Regional Evaluation Board

A B AT E M E N T O R C A N C E L L AT I O N
Grounds:
1. If the assessment is excessive or erroneous
2. If the administration costs involved do not
justify the collection of the amount due

DISTRAINT
( A C T UA L / C O N S T R U C T I V E ) A N D
LEVY
Requisites:
1. The taxpayer must be delinquent
2. There must be a subsequent demand for its
payment
3. The taxpayer must fail to pay the delinquent
tax at the time required
4. The period within which to collect the tax
has not yet prescribed

Note:
1. Constructive distraint does not require
delinquency of taxpayer
2. Distraint and levy cannot be availed of where
amount does not exceed P100.00

PROPERTIES NOT SUBJECT TO


DISTRAINT/LEVY
1. Bond or cash deposit for possession of firearms
2. Property under judicial settlement or in custodia
legis without consent of competent court
3. Property or interests in property which by
special law are exempt from attachment or levy (e.g.
benefits paid by GSIS and SSS)

D I S T R A I N T M AY B E M A D E B Y
CIR/ authorized representatives Deliquent
tax is more than 1 million

Revenue District Officer- Delinquent tax is 1


million or less

SUSPENSION OF BUSINESS
O P E R AT I O N S

For Vat- registered person, there must be an


understatement of taxable sales or receipts by
30% or more of his correct taxable sales or
receipts for the taxable quarter
Note: The duration of the suspension of
business operation is for a period of not less
than 5 days and shall be lifted only upon
compliance of whatever requirements imposed
by the CIR in the collection order.

TA X L I E N
Note: A tax on specified property of a
taxpayer is also a lien on his other property.
However, this does not extend to a property
merely leased to him
The lien shall not be valid against any
mortgagee, purchaser, or judgment creditor
until notice of such lien shall be filed by the
Commissioner of Internal Revenue in the Office
of the Register of Deeds of the province or city
where the property of the taxpayer is situated

E X T I N G U I S H M E N T O F TA X L I E N S
By payment or remission
By prescription of right of government to assess or
collect
By failure to file notice of lien in the office of ROD
as against any mortgagee, purchaser or judgment
creditor
By destruction of property

FORFEITURE
Forfeited property maybe sold or destroyed.
Note: Subject to limitation that forfeited property
shall not be destroyed until atleast 20days after
seizure

E N F O R C E M E N T O F A D M I N I S T R AT I V E
FINE

JUDICIAL REMEDIES
Civil action
Criminal actions
Note: In filing of criminal actions ( false or
fraudulent return), proceedings may commenced
without an assessment

PRESCRIPTIVE
PERIOD
Assessment- 3 years from date of last day of filing
Except:
Section 222. False, fraudulent or failure to file ITR10 years from discovery
Agreement to extend period before expiration of
3years
Waiver of renunciation

Collection of taxes:
5years from assessment
10years without assessment in case of fraudulent
or false return with intent to evade or failure to file

For violation of tax code: 5 years form date of


commission or discovery thereof