Cielo Tax Remedies Diagram

Calling for the payment of a deficiency tax or
Chapter 19 unpaid tax can only be made after the gov’t

ASSESSMENT has established the correct/reasonably correct
TAX amount of tax of the taxpayer.
REMEDIES EXCEPTIONS TO THE 3-YEAR PRESCRIPTION RULE

DEADLINE OF VARIOUS PRESCRIPTIVE PERIOD OF
TAXES ASSESSMENT 1. Fraudulent returns
The General Rule: 3 years: 2. Willful neglect to file
A. Income Tax Returns  Early filing 3. Waiver of the statutes of limitation by the
1. Annual income tax  Late filing taxpayer
2. Capital gains tax return
3. Withholding tax returns
Deadline of assessment
With a tax return filed
D. Transfer Tax Returns -Return is non-fraudulent 3 yrs. From date of filing / deadline w/C ever is late
1. Donor’s Tax – W/ in 30
-Return is fraudulent 10 yrs. From the discovery of fraud
days from the date of
Non-filing o of tax return 10 yrs. From the discovery of non-filing
the donation.
2. Estate Tax – w/ in 1 year
from the date of the STAGES OF ASSESSMENT
decedent’s death 1. Selection of taxpayers to be audited ASSESSMENT PROCEDURES:
C. Business Tax Returns 2. Audit of the taxpayers 1. Pre-Assessment Notice (PAN)

1. Non-VAT taxpayers – 3. Assessment of taxpayers w/ unpaid / 2. Formal Letter of Demand & Final Assessment
BIR form 2551Q deficiency tax. Notice (FLD/FAN)
2. VAT Taxpayers – BIR 3. Final decision on a Disputed Assessment
Form 2550Q (FDDA)
THE BIR TAX AUDIT PROCESS
B. Documentary stamp tax
1. Release of Letter of Authority to the
return
Except in the case of late filing, the revenue officer TYPES OF TAXPAYERS’ PROTEST:
prescriptive period foe assessment 2. Conduct of the audit examination
3. Reporting on the results of a. Request for reconsideration – on the basis of
shall be counted from the
examination existing records
aforementioned deadline of filing of
the tax type being assessed. b. Request for re-investigation – on the basis of
newly discovered / additional evidence
COLLECTION
STAGES OF COLLECTION
1. Preliminary Collection Letter
2. Final Notice before Seizure Letter
Collection will be enforced by the 3. Warrant of Distraint / Levy or Garnishment
government once the assessment 4. Researched of taxpayer properties Requirements for the validity of a protest:
achieves finality under any of the ff. 5. Notice of Tax Lien % or Notice of Tax Levy 1. Nature protest
instances: 6. Seizure of Properties 2. Date of the assessment notice
A. When the taxpayer defaulted in 7. Auction Sale 3. State the facts, the applicable law, rules
his administrative remedies 8. Filing of civil/ criminal action and regulations or jurisprudence
B. Denial of the taxpayer’s protest 4. In person or through registered mail
by the CIR / his authorized All documents must submitted within 60
representative. days.
C. Whether or not on appeal, when
the assessment is upheld by the Content of Rely to PAN
court. The taxpayer’s reply to the PAN shall include:
a. Explanation on matters questioned by the
examiner
b. Factual and legal bases supporting the AUTHORITY OF THE CIR TO ABATE TAXES
Government Remedies to Enforce taxpayer’s position Under Section 204(B) of the NIRC, the VIR is
Collections: c. Prayer for full or partial cancellation of the authorized to abate or cancel a tax liability under
1. Imposition of tax alien PAN the following conditions:
2. Seizure of the taxpayer’s 1. The tax / any portion of it which appears to
properties be unjustly / excessively assessed.
3. Auction sale & forfeiture of 2. The administrative / collection costs
taxpayer’s properties involved do not justify the collection of the
4. Filing of civil / criminal action amount due.
Deadline of collection Mode of collection 3. The taxpayers is dead, leaving no
against taxpayer.
With a prior 5 years from assessment Summary proceedings or distrainable or leviable property.
5. Imposition of administrative of
business operation assessment by judicial action 4. The taxpayer is abroad leaving no
6. Suspension of business Without a prior 10 years from discovery of By judicial action only forwarding address with no
operations assessment fraud or falsify distrainable/leviable property.
7. Entering into a tax compromise 5. The taxpayer is a corporation who has
w/ the taxpayer. already dissolved and all subscribed shares
of stock have been fully paid.
6. The tax case has already prescribed.

Cielo Tax Remedies Diagram

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Calling for the payment of a deficiency tax or

Chapter 19 unpaid tax can only be made after the gov’t

REMEDIES EXCEPTIONS TO THE 3-YEAR PRESCRIPTION RULE

C. Business Tax Returns 2. Audit of the taxpayers 1. Pre-Assessment Notice (PAN)

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