BIR PROCESS ON TAX

ASSESSMENT
MICHELLE M. TEMPLADO
BIR HAS OBSERVED PROPER PROCEDURES ON TAX
ASSESSMENT. THE PROCESS PROVIDES THE TAXPAYER
THE RIGHT TO DISCUSS, AND PROTEST OR APPEAL, THE
FINDINGS OF THE BIR, IN THE COURSE OF THE TAX
INVESTIGATION. PURSUANT TO THE MANDATE OF THE
TAX CODE, THE DEPARTMENT OF FINANCE ISSUED
REVENUE REGULATIONS 12-1999, WHICH PRESCRIBES
THE PROCEDURE FOR TAX ASSESSMENT. THIS WAS
SUBSEQUENTLY AMENDED BY REVENUE REGULATIONS
18-2013, 7-2018, AND, MOST RECENTLY, 22-2020, WHICH
WAS PUBLISHED ON 17 SEPTEMBER 2020.
BIR PROCESS ON TAX ASSESSMENT

BIR Issuance of The most notable change introduced by RR 22-2020 is the

Notice of Discrepancy (NoD)
30 days
-Reply
-Discussion of Discrepancy
requirement for the issuance of a Notice of Discrepancy (NoD)
before the Preliminary Assessment Notice (PAN) is issued. The
NoD replaced the Notice of Informal Conference (NIC), which was
reinstated on 22 January 2018 by RR 7-2018 after it was removed
on 2013 in RR 18-2013. Under RR 22-2020, the taxpayer and the
BIR have 30 days from taxpayer’s receipt of the NoD to discuss
the BIR’s findings of alleged discrepancies in tax payment
(Discussion of Discrepancy). It is during the Discussion of
Discrepancy that the taxpayer is given the opportunity to present
his side of the case and explain the discrepancy found during the

-Conclusion of Discussion investigation of the revenue officer assigned and submit

documents to support the explanation or arguments.
BIR PROCESS ON TAX ASSESSMENT
.

-Reply
-Discussion of Discrepancy
-Conclusion of Discussion

If the taxing authority still finds the taxpayer liable for

deficiency tax or the taxpayer is unable to sufficiently
address the items of the alleged tax discrepancy, the PAN
10 days may be issued within 10 days from the conclusion of the
Discussion.

BIR Issues
Preliminary Assessment Notice
(PAN)
BIR PROCESS ON TAX ASSESSMENT
.

BIR Issues
Preliminary Assessment Notice
(PAN)

The assessment shall be formalized through the issuance

of the formal assessment notice (FAN).
10 days

Issuance of Formal Assessment

Notice (FAN)
BIR PROCESS ON TAX ASSESSMENT
Issuance of Formal Assessment
Notice (FAN)
30 days
Tax Payer file PROTEST
.
The taxpayer has 30 days from receipt of the FAN to protest the
assessment by writing a request for reconsideration or
reinvestigation. The taxpayer should state in the protest: 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; date of the assessment notice; and the
applicable law, rules and regulations, or jurisprudence on which his
protest is based, otherwise, the protest shall be considered void and
without force and effect. The taxpayer should state in the protest:
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; date of the assessment
notice; and the applicable law, rules and regulations, or
jurisprudence on which his protest is based, otherwise, the protest
shall be considered void and without force and effect.
 BIR PROCESS ON TAX ASSESSMENT

Issuance of Formal Assessment

Notice (FAN)

Additional supporting
documents should be submitted Issuance of Formal
by the taxpayer within 60 days Assessment Notice (FAN)
30 days from filing of the protest for
requests for reinvestigation,
otherwise, the assessment shall
become final.

Tax Payer file PROTEST

DECISION
180 days (Commissioner on Internal 180 days
Revenue or authorized
representative)
BIR’S DECISION ON THE PROTEST, WHICH IS CONTAINED IN THE FINAL DECISION ON
DISPUTED ASSESSMENT (FDDA), SHALL STATE FACTS, APPLICABLE LAW, RULES AND
REGULATIONS OR JURISPRUDENCE ON WHICH THE DECISION IS BASED;
OTHERWISE, THE FDDA SHALL BE VOID. IF THE PROTEST IS DENIED, IN WHOLE OR IN
PART, THE TAXPAYER MAY EITHER: APPEAL TO THE COURT OF TAX APPEALS (CTA)
WITHIN 30 DAYS FROM RECEIPT OF THE FDDA; OR ELEVATE THE PROTEST,
THROUGH REQUEST FOR RECONSIDERATION, TO THE COMMISSIONER OF INTERNAL
REVENUE (CIR) WITHIN 30 DAYS FROM RECEIPT OF THE FDDA. IF THE TAXPAYER
ELEVATED THE PROTEST TO THE CIR AND THE CIR DID NOT ACT ON THE REQUEST
FOR RECONSIDERATION WITHIN 180 DAYS, THE TAXPAYER MAY EITHER APPEAL TO
THE CTA WITHIN 30 DAYS FROM THE LAPSE OF THE 180-DAY PERIOD OR FROM THE
DATE THE CIR FINALLY DECIDES ON THE REQUEST.