I. TAX REMEDIES (NATIONAL TAXES): Title VIII (Sec.

202-231)

A. Remedies of the Government

1. Collection of tax liability

1.1 No court injunction against tax collection rule

Sec. 218, NIRC Injunction not Available to Restrain Collection of Tax. - No court
shall have the authority to grant an injunction to restrain the collection of any national internal
revenue tax, fee or charge imposed by this Code.

Rule 12, CTA Rules to implement R.A. 1125 (CTA may issue an injunction)

Republic vs. Lim Tian Teng, 16 SCRA 584 (when the

commissioner did not answer the request for reinvestigation and started
the collection process, such is the answer of the commissioner. Please
note that under the 1997 tax code, the commissioner is required to
answer but the action of starting collection is still on-going so the
action is to go to the CTA)

SEC. 56. Payment and Assessment of Income Tax for Individuals and Corporations. -

(A) Payment of Tax. -

(1) In General. - The total amount of tax imposed by this Title shall be paid by the person subject
thereto at the time the return is filed. In the case of tramp vessels, the shipping agents and/or the
husbanding agents, and in their absence, the captains thereof are required to file the return herein
provided and pay the tax due thereon before their departure. Upon failure of the said agents or
captains to file the return and pay the tax, the Bureau of Customs is hereby authorized to hold the
vessel and prevent its departure until proof of payment of the tax is presented or a sufficient bond is
filed to answer for the tax due. 

(2) Installment of Payment. - When the tax due is in excess of Two thousand pesos (P2,000), the
taxpayer other than a corporation may elect to pay the tax in two (2) equal installments in which
case, the first installment shall be paid at the time the return is filed and the second installment, on or
before July 15 following the close of the calendar year. If any installment is not paid on or before the
date fixed for its payment, the whole amount of the tax unpaid becomes due and payable, together
with the delinquency penalties. 

(3) Payment of Capital Gains Tax. - The total amount of tax imposed and prescribed under Section
24 (c), 24(D), 27(E)(2), 28(A)(8)(c) and 28(B)(5)(c) shall be paid on the date the return prescribed
therefor is filed by the person liable thereto: Provided, That if the seller submits proof of his
intention to avail himself of the benefit of exemption of capital gains under existing special laws, no
such payments shall be required: Provided, further, That in case of failure to qualify for exemption
under such special laws and implementing rules and regulations, the tax due on the gains realized
from the original transaction shall immediately become due and payable, subject to the penalties
prescribed under applicable provisions of this Code: Provided, finally, That if the seller, having paid
the tax, submits such proof of intent within six (6) months from the registration of the document
transferring the real property, he shall be entitled to a refund of such tax upon verification of his
compliance with the requirements for such exemption. 

In case the taxpayer elects and is qualified to report the gain by installments under Section 49 of this
Code, the tax due from each installment payment shall be paid within (30) days from the receipt of
such payments. 

No registration of any document transferring real property shall be effected by the Register of Deeds
unless the Commissioner or his duly authorized representative has certified that such transfer has
been reported, and the tax herein imposed, if any, has been paid. 
(B) Assessment and Payment of Deficiency Tax. - After the return is filed, the Commissioner shall
examine it and assess the correct amount of the tax. The tax or deficiency income tax so discovered
shall be paid upon notice and demand from the Commissioner. 

As used in this Chapter, in respect of a tax imposed by this Title, the term 'deficiency' means: 

(1) The amount by which the tax imposed by this Title exceeds the amount shown as the tax by the
taxpayer upon his return; but the amount so shown on the return shall be increased by the amounts
previously assessed (or collected without assessment) as a deficiency, and decreased by the amount
previously abated, credited, returned or otherwise repaid in respect of such tax; or 

(2) If no amount is shown as the tax by the taxpayer upon this return, or if no return is made by the
taxpayer, then the amount by which the tax exceeds the amounts previously assessed (or collected
without assessment) as a deficiency; but such amounts previously assessed or collected without
assessment shall first be decreased by the amounts previously abated, credited returned or otherwise
repaid in respect of such tax.

SEC. 228. Protesting of Assessment. - When the Commissioner or his duly authorized

representative finds that proper taxes should be assessed, he shall first notify the taxpayer of his
findings: Provided, however, That a pre-assessment notice shall not be required in the following
cases: 

(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 

(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. 

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. 

Within a period to be prescribed by implementing rules and regulations, the taxpayer shall be
required to respond to said notice. If the taxpayer fails to respond, the Commissioner or his duly
authorized representative shall issue an assessment based on his findings. 

Such assessment may be protested administratively by filing a request for reconsideration or

reinvestigation within thirty (30) days from receipt of the assessment in such form and manner as
may be prescribed by implementing rules and regulations. Within sixty (60) days from filing of the
protest, all relevant supporting documents shall have been submitted; otherwise, the assessment shall
become final. 

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 Court of Tax Appeals within thirty (30) days from receipt of the said decision, or from
the lapse of one hundred eighty (180)-day period; otherwise, the decision shall become final,
executory and demandable. 
 1.2 Summary remedies Sec. 205-217
Sec. 222 (C), NIRC

1.3 Civil action & Criminal Actions Sec. 205, NIRC

1.4 Form & Mode of Proceedings Sec. 220, NIRC

Arches vs. Bellosillo 20 SCRA 32 (lack of approval of
commissioner is not jurisdictional, it affects only the capacity of
parties)
Republic vs. Salud Hizon G.R. No. 130430 Dec. 13, 1999 (summary
proceedings on collection, prescriptive period had lapsed and had
become final, lack of approval of commissioner is not a bar)
Policies of decentralization Sec. 7, NIRC

1.5 Cases
1.5.1 sec 254-255
Ungab vs. Cusi 97 SCRS 877 (if it is a fraudulent return
criminal actions are to be filed in court, criminal actions need not have the
computation of the tax due.)
BIR vs CA GR 197590 Nov. 24, 2014 (Where it is
shown on the facts that the return was fraudulent, there is no need for an
assessment before a criminal case is filed)
Adamson vs. CA GR 120935& 124557 Nay 21, 2009 (no
need for assessment for crim action to be filed
Cir vs Pascor GR 128315 June 29, 1999 (failure to file a
return is basis to file a crim complaint without assessment)
People vs Docena CTA EB Crim case NO. 30, 04 January
2016 (are the president and treasurer liable for the civil liability arising from the
DST deficiency? The courts ruled that it must be proven that the said officers
intended for the same and are not just officers of the corporation.)
Monteverde vs. People 387 SCRA 196 215(2002)
Graft and corruption case, it was required that the conviction come from the
strength of prosecution and not the weakness of the defense.

People vs. Patanao 20 SCRA 712 (criminal action does not

amount to a decision for unpaid taxes under the old nirc)
CIR, et.al. vs. CA, et. al., 257 SCRA 200, June 4,1996 (fortune
tobacco cases)
Marcos vs. CA, G.R. No. 120880, June 5, 1997
Cir vs Ayala hotels inc. CA-GR SP no. 70025 April 19, 2004
(requirements on fraudulent returns and non-filing of returns for purposes of fraud)
Comm vs asalus corp CTA en banc no 1191
GR 221590 Feb 22, 2017
BIR issued an assessment against asalus for deficiency VAT for 6 years under declaration
of sales which shows the fraud, the CTA dismissed the case on the ground that the proof of fraud
was not substantiated by the BIR. The supreme court however declared the six year period of
underdeclaration of sales “demonstrates the falsity and fraudulence in the income tax with intent
to evade the tax.” Case was remanded to the CTA to determine tax liability.

Cir vs Obayashi PHIL. Corp. CTA eb case no 42 (CTA case no 6222)

June 10, 2005

BIR issued an assessment against the taxpayer which reached the CTA. The CTA initially
dismissed the case of the BIR which was then raised to the new Court of Tax appeals, among the
points raised in the case were as follows:
a. assessment notices were sent to the old address despite the filing and showing of the
change of address by the taxpayer with the BIR. The BIR was informed of the change of
address and should have sent the same to the new address, which the BIR did not do.
b. BIR claims that the letters were mailed to the taxpayer and thus were valid service. This
was denied by the taxpayer. This shifts the disputable presumption on the part of the BIR
to prove mailing, which the BIR failed to show.
c. Period to assess commences from the filing of the final return. In this case this was a
VAT assessment such that the final returns were the quarterly return which are filed at
the end of each quarter of the year and the three year period commences at that point for
each final return. Since the year under investigation was for 1995 and the assessments
were issued in December 1998 and was known to the taxpayer on the year 2000. The
same was beyond the three year prescriptive period.
d. The BIR claims for the first time in the CTA that there was fraud on the case and that the
10 year prescriptive period should apply. The courts ruled that the matter of fraud should
be alleged at the very first instance in the assessment against the taxpayer so that the
latter is made aware of the same, not on the first instance on the petition.

Because of the points above, the case was dismissed against the BIR.

Telsat inc. Vs . Cir. CTA case no 6812, Jan 2,2006

BIR issued an assessment against petitioner on the basis of fraud and using the
10 year prescriptive period. The discrepancy was presented but there was no substantial proof
of actual fraud. Petitioner was able to explain discrepancy. CTA dismissed due to the FAN
issued beyond prescriptive period because fraud was not proven.

2. Forfeiture
Secs. 224-226, NIRC
Republic vs. Enriquez 166 SCRA 608, Oct. 21, 1988 (Sheriff of the
city of manila levied over two barges of maritime company of the Philippines,
which had already been issued warrants of distraint by the commissioner of
internal revenue. City of Manila continued the publica auction sale. Question is
which is more superior, the warrant of distraint vs writ of execution? superiority
of tax lien based on character and in time, distraint over seizure)

3. Compromise Sec. 204 (A), NIRC

(A) Compromise the payment of any internal revenue tax, when:

(1) A reasonable doubt as to the validity of the claim against the taxpayer exists; or
(2) The financial position of the taxpayer demonstrates a clear inability to pay the
assessed tax.

The compromise settlement of any tax liability shall be subject to the following minimum
amounts:

For cases of financial incapacity, a minimum compromise rate equivalent to ten percent
(10%) of the basic assessed tax; and
For other cases, a minimum compromise rate equivalent to forty percent (40%) of the
basic assessed tax.

Where the basic tax involved exceeds One million pesos (P1,000.000) or where the settlement
offered is less than the prescribed minimum rates, the compromise shall be subject to the
 approval of the Evaluation Board which shall be composed of the Commissioner and the four
(4) Deputy Commissioners.

4. Abatement/Cancellation Sec. 204 (B), NIRC

Rev Reg. 7-2001

(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.

B. Deficiency Tax Assessment

1. Meaning of Assessment/Deficiency Sec. 56 (B) (1) & (2), NIRC

Sec 56 (B) Assessment and Payment of Deficiency Tax. - After the return is filed, the Commissioner
shall examine it and assess the correct amount of the tax. The tax or deficiency income tax so discovered
shall be paid upon notice and demand from the Commissioner.

As used in this Chapter, in respect of a tax imposed by this Title, the term 'deficiency' means:

(1) The amount by which the tax imposed by this Title exceeds the amount shown as the tax by the
taxpayer upon his return; but the amount so shown on the return shall be increased by the amounts
previously assessed (or collected without assessment) as a deficiency, and decreased by the amount
previously abated, credited, returned or otherwise repaid in respect of such tax; or

(2) If no amount is shown as the tax by the taxpayer upon this return, or if no return is made by the
taxpayer, then the amount by which the tax exceeds the amounts previously assessed (or collected without
assessment) as a deficiency; but such amounts previously assessed or collected without assessment shall
first be decreased by the amounts previously abated, credited returned or otherwise repaid in respect of
such tax.

2. Kinds of Tax Assessment RR No. 12-85

RR No. 12-99
Sec. 228

SEC. 228. Protesting of Assessment. - When the Commissioner or his duly authorized representative finds
that proper taxes should be assessed, he shall first notify the taxpayer of his findings: Provided, however,
That a pre-assessment notice shall not be required in the following cases:
(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

(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.

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.

Within a period to be prescribed by implementing rules and regulations, the taxpayer shall be required to
respond to said notice. If the taxpayer fails to respond, the Commissioner or his duly authorized
representative shall issue an assessment based on his findings.

Such assessment may be protested administratively by filing a request for reconsideration or reinvestigation
within thirty (30) days from receipt of the assessment in such form and manner as may be prescribed by
implementing rules and regulations. Within sixty (60) days from filing of the protest, all relevant
supporting documents shall have been submitted; otherwise, the assessment shall become final.

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
Court of Tax Appeals within thirty (30) days from receipt of the said decision, or from the lapse of one
hundred eighty (180)-day period; otherwise, the decision shall become final, executory and demandable.

RR No. 2-98 Sec. 2.80 (C), (D) & (E)

Sec 247-252

SEC. 247. General Provisions. -

(a)  The additions to the tax or deficiency tax prescribed in this Chapter shall apply to all taxes, fees and
charges imposed in this Code. The Amount so added to the tax shall be collected at the same time, in the
same manner and as part of the tax.

(b)  If the withholding agent is the Government or any of its agencies, political subdivisions or
instrumentalities, or a government-owned or controlled corporation, the employee thereof responsible for
the withholding and remittance of the tax shall be personally liable for the additions to the tax prescribed
herein.

(c)  The term 'person', as used in this Chapter, includes an officer or employee of a corporation who as such
officer, employee or member is under a duty to perform the act in respect of which the violation occurs.

SEC. 248. Civil Penalties. -

(A) 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 as required under the provisions of this Code or
rules and regulations on the date prescribed; or

(2)  Unless otherwise authorized by the Commissioner, filing a return with an internal revenue officer other
than those with whom the return is required to be filed; or

(3)  Failure to pay the deficiency tax within the time prescribed for its payment in the notice of assessment;
or

(4)  Failure to pay the full or part of the amount of tax shown on any return required to be filed under the
provisions of this Code or rules and regulations, or the full amount of tax due for which no return is
required to be filed, on or before the date prescribed for its payment.

(B) In case of willful neglect to file the return within the period prescribed by this Code or by rules and
regulations, or in case a false or fraudulent return is willfully made, the penalty to be imposed shall be fifty
percent (50%) of the tax or of the deficiency tax, in case, any payment has been made on the basis of such
return before the discovery of the falsity or fraud: Provided, That a substantial under-declaration of taxable
sales, receipts or income, or a substantial overstatement of deductions, as determined by the Commissioner
pursuant to the rules and regulations to be promulgated by the Secretary of Finance, shall constitute prima
facie evidence of a false or fraudulent return: Provided, further, That 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.

SEC. 249. Interest. -

(A) In General. - There shall be assessed and collected on any unpaid amount of tax, interest at the rate of
double the legal interest rate for loans or forbearance of any money in the absence of an express stipulation
as set by the Bangko Sentral ng Pilipinas from the date prescribed for payment until the amount is fully
paid: Provided, That in no case shall the deficiency and the delinquency interest prescribed under
Subsections (B) and (C) hereof, be imposed simultaneously.

"(B) Deficiency Interest - Any deficiency in the tax due, as the term is defined in this Code, shall be subject
to the interest prescribed in Subsection (A) hereof, which interest shall be assessed and collected from the
date prescribed for its payment until the full payment thereof, or upon issuance of a notice and demand by
the Commissioner of Internal Revenue, whichever comes earlier.

(C) 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 Commissioner, there shall be assessed and collected on the unpaid amount, interest at the
rate prescribed in Subsection (A) hereof until the amount is fully paid, which interest shall form part of the
tax.2

(D) Interest on Extended Payment. - If any person required to pay the tax is qualified and elects to pay
the tax on installment under the provisions of this Code, but fails to pay the tax or any installment hereof,
or any part of such amount or installment on or before the date prescribed for its payment, or where the
Commissioner has authorized an extension of time within which to pay a tax or a deficiency tax or any part
thereof, there shall be assessed and collected interest at the rate hereinabove prescribed on the tax or
deficiency tax or any part thereof unpaid from the date of notice and demand until it is paid.

SEC. 250. Failure to File Certain Information Returns. - In the case of each failure to file an
information return, statement or list, or keep any record, or supply any information required by this Code or
by the Commissioner on the date prescribed therefor, unless it is shown that such failure is due to
reasonable cause and not to willful neglect, there shall, upon notice and demand by the Commissioner, be
paid by the person failing to file, keep or supply the same, One thousand pesos (1,000) for each failure:
Provided, however, That the aggregate amount to be imposed for all such failures during a calendar year
shall not exceed Twenty-five thousand pesos (P25,000).

SEC. 251. Failure of a Withholding Agent to Collect and Remit Tax. - Any person required to withhold,
account for, and remit any tax imposed by this Code or who willfully fails to withhold such tax, or account
for and remit such tax, or aids or abets in any manner to evade any such tax or the payment thereof, shall, in
addition to other penalties provided for under this Chapter, be liable upon conviction to a penalty equal to
the total amount of the tax not withheld, or not accounted for and remitted.

SEC. 252. Failure of a Withholding Agent to refund Excess Withholding Tax. - Any

employer/withholding agent who fails or refuses to refund excess withholding tax shall, in addition to the
penalties provided in this Title, be liable to a penalty to the total amount of refunds which was not refunded
to the employee resulting from any excess of the amount withheld over the tax actually due on their return.

a. Self Assessment Pay as you file Sec 56 [A] [1] 1997 NIRC
Self – assessing
Republic vs Ricarte, G.R. No. L-46893,
Nov. 12, 1985

On June 20, 1959, Republic Act No. 2343 took effect amending Commonwealth Act No. 466 including
Section 51(a). Under the amendatory act, the taxpayer assesses himself, files his return and pays the tax as
shown in his return upon filing thereof.

Appellee filed his income tax return for the year 1958 on March 2, 1959 and the same was assessed by the
Bureau of Internal Revenue on April 6, 1959. The tax was paid in two installments. The Bureau of Internal
Revenue reviewed the said return and found out a deficiency in the assessment it previously made and the
income tax paid by the appellee. A notice of assessment was sent to the appellee on January 19, 1961. Such
subsequent assessment undertaken by the Bureau of Internal Revenue was based merely on the income tax
return filed by the appellee where no assessment has been made by him. As has been said, the amount of
tax due was previously computed by the Bureau of Internal Revenue. Finding that it made an error, the
Bureau reassessed the income tax return of the appellee; but such reassessment was made pursuant to the
old law and not under the amendatory act.

Although a subsequent notice of assessment was allegedly made and sent to appellee on January 19, 1961,
it was the finding both of the former City Court of Cebu and the defunct Court of First Instance of Cebu
that no evidence has been presented by the appellant that the appellee actually received a copy of that
assessment notice regarding the alleged deficiency tax. Such finding, being one of fact, can no longer be
reviewed by this Court. Even in the stipulation of facts entered into between the parties, there is no
stipulation showing that the appellant actually received the subsequent notice of assessment. Thus, the
prescriptive period provided for in Section 332(c) of the tax code should be counted from April 6, 1959, the
date when the Bureau of Internal Revenue assessed the income tax return of the appellant. From said date
until the filing of this case on January 14, 1966, six years and nine months had elapsed. Verily, the action
had already prescribed.
WHEREFORE THE APPEALED DECISION DATED SEPTEMBER 29, 1968, IS HEREBY AFFIRMED.
NO COSTS.

Tupaz vs. Ulep 316 SCRA 118

Exception
Taxpayer period is terminated
Tax Audits
Tax Liens
Dissolution
b. Deficiency Assessment Sec. 56 (B) (1) & (2), NIRC
c. Illegal and Void Assessment Sec. 228
Victorias Milling Co. Inc. vs. CTA L-24213, mar. 13, 1968

On September 3, 1964 the Court of Tax Appeals held that the assessment in controversy which allegedly
did not conform with the provisions of the Department of Finance's Provincial Circular dated February 7,
1940, were merely "erroneous", rather than "illegal" and "null and void", for which reason it was incumbent
upon Victorias to prosecute its appeal first in the Provincial Board of Assessment Appeals before resorting
to the courts.  The Tax Court consequently dismissed the case with costs against Victorias.  Hence, this
appeal of Victorias.
The issue is whether or not the Court of First Instance had jurisdiction to entertain the complaint of Vic-
torias.
It is settled in our jurisdiction that where an assessment is illegal and void, the remedy of a taxpayer, who
has already paid the realty tax under protest, is to sue for refund in the competent court of first instance.  On
the other hand, where the assessment is merely erroneous, his recourse is to file an appeal in the Provincial
Board of Assessment Appeals within 60 days from receipt of the assessment.
An assessment is illegal and void when the assessor has no power to act at all.  It is erroneous when the as-
sessor has the power but errs in the exercise of that power.
In this case, the Provincial Assessor of Negros Occidental had the power to make the assessments in
question under Section 7 of the Assessment Law.  At any rate, the authority of the assessor is not disputed
by Victorias.
Since the Provincial Assessor had the power to make the assessments, but in the exercise of such power he
deviated from the procedure set down by law, in that he employed the "fixed percentage of diminishing
book value method" instead of the "straight-line method" in depreciating the machineries, logically, the
assessment should be considered as erroneous.  In which event, Victorias' remedy, pursuant to Section 17
of the Assessment Law, was to appeal to the Provincial Board of Assessment Appeals.
By the doctrine of the primacy of administrative remedy, the Provincial Board of Assessment Appeals had
jurisdiction over the dispute to the exclusion of the Court of First Instance.

CIR vs Reyes 480 SCRA 382, 396-397 (2006) void assessment bears no fruit

second paragraph of Section 228 of the Tax Code[12] is clear and mandatory.
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."
In the present case, Reyes was not informed in writing of the law and the facts on which the assessment of
estate taxes had been made. She was merely notified of the findings by the CIR, who had simply relied
upon the provisions of former Section 229[13]... prior to its amendment by Republic Act (RA) No. 8424,
otherwise known as the Tax Reform Act of 1997.
First, RA 8424 has already amended the provision of Section 229 on protesting an assessment. The old
requirement of merely notifying the taxpayer of the CIR's findings was changed in 1998 to informing the
taxpayer of not only the law, but... also of the facts on which an assessment would be made; otherwise, the
assessment itself would be invalid.
It was on February 12, 1998, that a preliminary assessment notice was issued against the estate. On April
22, 1998, the final estate tax assessment notice, as well as demand letter, was also issued. During those
dates, RA 8424 was already in effect. The notice required under the... old law was no longer sufficient
under the new law.
The act cannot be taken to mean that Reyes... already knew the law and the facts on which the assessment
was based. It does not at all conform to the compulsory requirement under Section 228
It would be premature for this Court to declare that the compromise on the estate tax liability has been
perfected and consummated, considering the earlier determination that the assessment against the estate
was void. Nothing has been settled or finalized. Under Section 204(A)... of the Tax Code, where the basic
tax involved exceeds one million pesos or the settlement offered is less than the prescribed minimum rates,
the compromise shall be subject to the approval of the NEB composed of the petitioner and four deputy
commissioners.

d. Erroneous Assessment