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Remedies 1 Assessment

The document summarizes key Philippine tax procedures and deadlines: 1) It outlines filing deadlines for various taxes such as income tax, VAT, estate tax, and donations tax. 2) It describes the assessment process from notice of assessment to appeal remedies. Central to this are the Preliminary Assessment Notice (PAN) and Final Assessment Notice (FAN). 3) It discusses remedies after assessment becomes final like compromise, distraint/levy, and prescription periods for assessment and collection. Suspension of collection during appeal is also addressed.

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Betson Cajayon
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134 views1 page

Remedies 1 Assessment

The document summarizes key Philippine tax procedures and deadlines: 1) It outlines filing deadlines for various taxes such as income tax, VAT, estate tax, and donations tax. 2) It describes the assessment process from notice of assessment to appeal remedies. Central to this are the Preliminary Assessment Notice (PAN) and Final Assessment Notice (FAN). 3) It discusses remedies after assessment becomes final like compromise, distraint/levy, and prescription periods for assessment and collection. Suspension of collection during appeal is also addressed.

Uploaded by

Betson Cajayon
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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a) INCOME TAX Calendar 15th of

April; for Fiscal Year 15th Day of


the 4th Month: Corporation 60
Days Each Quarter (Installment:
Individual Only, Above 2,000; 1st
Apr. 15 & 2nd Jul. 15)
b) FIT & CWT 15th of April: CGT 30
Days Each Transaction: (Annual
Information Return (FIT) Jan. 31
(CWT) Mar. 1)
c) VAT 20th End of the Month (25th
under EFPS); 25th End of Quarter
d) ESTATE 2 Months Notice
(Above 20T); Return 6 Months
After Death (Above 200T or w/
registrable property)
e) DONOR 30th Day After Donation


OF INTERNAL

BUREAU
REVENUE
Assessment: Notice of Assessment
a) Ordinary 3 years
b) Extraordinary 10 years (False, Fraudulent
or No Return)
c) By Agreement (Executed before 3 or 10 Expires)
Note: Determination of Prescription
From the LAST DATE when Tax Return (or
Final Adjusted Return) SHOULD have been
filed or From the Date when Return was
ACTUALLY filed.
Reckoning Period for purposes of
Prescription is the Date when such FAN has
been MAILED thru a Registered Mail NOT the
Date of Receipt by the Taxpayer
In case of (b) from Date of Discovery

Notice of Assessment DEEMED MADE


1. Contents:
Factual &
Legal basis
of the
assessment;
2. Must be
received by
the proper
person

ELSE: VOID;
Prescriptive
period runs

GROUNDS for Suspension of the


Running of the PRESCRIPTIVE
Period for Assessment & Collection:

Undisputed (Uncontested)
Assessment: Once Judicial
Action is Filed, the TAXPAYER
can NO longer ASSAIL the
Legality or Validity of the
Assessment

1. CIR is Prohibited from making


Assessment, Distraint or Levy
(Pending Petition for Review in
the CTA)
2. Taxpayers Request for
Reinvestigation or
Reconsideration which is
GRANTED
3. Taxpayer Cannot be Located in
his Return Address
4. No property could be Located
5. Taxpayer is OUT of the
Philippines

Delinquency Assessment:
Immediately Collectible by
Distraint or Levy or Judicial
Action
Deficiency Assessmen: Must
await for the Decision of
CIR/CTA

PAN (Preliminary Assessment Notice)


Mandatory Unless EXEMPT
Within 15 Days

Written REPLY (Not Protest:

As a RULE, No Payment under


Protest is required. However, NO
Action shall be taken UNTIL the
Deficiency Tax has been PAID.
As a RULE, only FAN can be
Protested: The CTA cannot acquire
jurisdiction on an Appeal of a
denied Protest over a PAN.
EXCEPTION: When PAN is a
subject of Protest and
subsequently a FAN was issued
w/ indication that the Protest over
the PAN is denied, then this could
be Appealed to the CTA.

FAN & LETTER OF DEMAND


1.
2.
3.
4.

Failure to Reply
Not Satisfied w/ the Reply
VOID
Based on Facts & Law Otherwise VIOD
As a Rule FAN is VOID
VIOD if NO prior PAN
was issued UNLESS NOT required:
Exceptions
a) Mathematical Error
b) Discrepancy
c) Claim of Refund or Tax Credit
d) Not paid Excise Tax
e) Transfer to Non-Exempt Persons

Note: Filing of a Criminal Case is NOT a Notice of


Assessment

JEOPARDY ASSESSMENT
(Made without Benefit of Audit PAN or FAN)

PROTEST
(Motion for
RECONSIDERATION)
no 60 day period

PROTEST (Motion for


REINVESTIGATION)

REMEDIES

1. JUDICIAL (Civil or Criminal)


2. DISTRAINT - Enforced on Personal Property

Actual: Remedy for enforcement of Assessed Tax Delinquency or Deficiency that


is already Determined
Constructive: Remedy for Protection of the Govt for Taxes that would STILL be
Assessed or Determined (Retiring from Business; Intending to Leave or Conceal
or Obstruct)
Garnishment: Remedy for enforcing Taxes against BANK Deposits

3. LEVY - Seizure of Real Properties & Interest or Rights therein.


4. COMPROMISE - Reasonable Doubt (40%) & Financial Incapacity/Position (10%)
5. TAX LIEN - Attaches from the time the Tax becomes DUE & DEMANDABLE (Personal) or
from the time of REGISTRATION with Registry of Deeds (Real). Preferred over Claim of
Mortgagors.

6. FORFEITURE - Seizure and Sale or Destruction of Personal or Real Properties


7. ABATEMENT - Unjust or Excessive; Cost of Collection do not justify the amount Due
PERIOD OF PRESCRIPTION:
ORDINARY 3 Years from Issuance of FAN unless Period is Suspended
EXTRAORDINAY 5 Years from DATE of Final Assessment
EXTRAORDINARY without Assessment 10 Years from Discovery see Sec. 222 NIRC (a) & (b)
BY AGREEMENT (Must be Executed before the 3, 5 or 10 period Expires)

SUSPENSION OF COLLECTION
GENERAL RULE: Tax Collection shall
NOT be Suspended during Appeal. NO
Injunction shall be Issued by any Court.
EXCEPTION:
a) Tax Collection may jeopardize the
Interest of Govt & Taxpayer;
b) Willing to Deposit the amount Equal to
the Taxes or Bond not more than twice;
c) Only under Exercise of Appellate
Jurisdiction; (Sec. 11 of RA 1125)
d) Appeal Not Frivolous or Dilatory.

Else: FINAL & Executory

Within 60 Days from Filing

Submission of
COMPLETE Set of
Documents

DECISION or INACTION
1. Denial of Protest
2. Lapsed of 180 Days from Filing
of Protest or Submission of
Documents
3. NO MR Does not Suspend the
Running of the Period to Appeal

no full investigation in the


issuance of the assessment

2 remedies of TP
1) Appeal
2) Await the
decision of the BIR

15 Days


MR

CIR vs Union shipping:


- Filing of Action in Court
was deemed the DENIAL of the
protest by SC
(NOTE: Not the issuance of
the warrant of distraint/
levy)

MR or W/out

ORDER of Suspension of Tax Collection


NOT a Writ of Injunction or TRO

Protest Deemed Denied


1) Referral to Solicitor General for
Judicial Collection
2) Filing of Civil Action/Criminal Action
3) Issuance of CIR of a Warrant of
Distraint or Levy w/ Clear & of its
Unequivocal language indication its
Final Denial
4) Second Letter of Demand
5) Final Notice before Seizure

SUPREME
COURT

15 Days
Rule 43

CTA
En Banc

15 Days
30 Days
Rule 42

CTA
Division

CA does not obtain


jurisdiction if
taxpayer does not
dispute the assessment
(NO PROTEST)

fr: Receipt of
Denial or from
lapse of 180 days

w/ Assessment w/in 3 years (Ordinary)

Collection W/OUT ASSESSMENT

PHASE

may even be BEYOND 180 days


(Revised Rules of the CTA)
brought by the ruling in
Lascona Land Co. case)

COMMISSIONER

w/ Assessment w/in 5 years (Extraordinary)

(Within 10 Years from Discovery)

COLLECTION

When Assessment becomes F&E:


1. Taxpayer does not file a protest within
39-day period
2. Taxpayer files protest but did not
comply with requirements
3. Taxpayer used incorrect remedy and
period to file has already passed.

As a Rule only FAN can be Protested)

Sec. 228

NIRC

UNDER THE

1) False Return; 2) Fraudulent Return; 3)


No Return or Failure to File

DISTRAINT / LEVY (by CIR)


Summary in Nature (RDO 1M Below, CIR
Above 1M); Lift Order CIR Only
Pursued Independently or Simultaneously
with Civil/Criminal Action once the FAN
has become FINAL & EXECUTORY
Not applicable if Tax involved is NOT more
than 100.00

REB

CIVIL

RTC ORIGINAL

CRIMINAL

(300,001/400,001 & Above) Civil or


Criminal

Assessment of Deficiency is
NOT necessary (Civil aspect
deemed instituted & No
Reservation Allowed)

if based on doubtful assessment - if on Financial


incapacity, law is silent, so i think at any time

NOT REVIEWABLE BY COURT:


The Power is Discretionary, and once
exercised by the Commissioner
CONNOT be Reviewed or Interfered
with by the courts. In other words, it
is an Exclusive Power of the CIR
(People vs. Desiderio 11.29.65)
Compromise is BAR to Criminal/Civil
Action

Original

(Civil or Criminal)

Requires Approval by CIR or


Representative AND Solicitor
General for Civil Actions

COMPROMISE

RDO 500,000 or Less & Minor Criminal


Violations; CIR above 500,000 500-1million-CIR
Evaluation Board exceeds 1M or Settlement
is Less than the prescribed Minimum Rate
If FAN was sustained by CTA compromise
can No longer be based on Reasonable
Doubt as a ground
Criminal Before FILED in Court or in Fraud
Civil Before FINAL & EXECUTORY

1 Million & Above

MTC / MeTC
(300,000/400,000 & Below) Civil or
Criminal

Criminal: 15 Days Notice of


Appeal (Sec. 3 & 6 Rule 122)
Civil: 30 Days Petition for Review (Rule 42)

15 Days Rule 40


TAX RETURN

(Taxpayer or W/holding Agent)

PERIOD OF FILING: (Can be Extended)

NOTICE of INFORMAL CONFERENCE


Not Satisfied w/ Taxpayers Explanation
Failure to Attend (RR 12-99)

PHASE

Within 30 Days

A
S S E S S M E N T

REMEDIES

15 Days (Rule 45)

Therefore, an affidavit complaint, though


containing some computation of tax liability,
may not be considered as an assessment notice

2 FUNCTIONS OF AN ASSESSMENT NOTICE


1. Inform taxpayer of Deficiency
2. Demand payment of such deficiency

RTC
Appellate Court

Criminal: 15 Days Petition


for Review (Rule 43)
Civil: 30 Days Petition for Review (Rule 43)

TAXPAYERS has
1. Right of Preemption
2. Right of Redemption
3. Right to file an Action to Contest
Forfeiture of Chattel w/ 6 months from
Sale or Recovery of NET Proceeds

By: J. V. Santiago & Nadine B.

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