TAX ADMINISTRATION AND REMEDIES

The Department of Finance (DOF) is the principal administrative agency of the government for tax
administration. It has executive supervision and control over other agencies, such as:
1. Bureau of Internal Revenue (BIR)
2. Bureau of Customs (BC) and the Tariff Commission (TC)
3. Land transportation Office (LTO)
4. Duly and lawfully authorized collectors
5. Local offices in charge to enforce local taxation.

Bureau of Internal Revenue (BIR)

The lead agency in administering and collecting Internal Revenue taxes. It is headed by the
Commissioner and 4 Deputy Commissioners under NIRC and additional 2 deputy Commissioners
under E.O. of former President Arroyo.

Powers and Duties of BIR

1. To assess and collect national internal taxes, fees, and charges;
2. To enforce all forfeitures, penalties and fines connected therewith;
3. To execute judgment in all cases decided in its favor by the CTA and the ordinary courts; and
4. To effect and administer the supervisory and police powers conferred upon it by the Tax Code
or other special laws, such as:
a. Assigning Internal Revenue Officers to establishments where articles subject to excise
tax are produced;
b. Providing and distributing forms, receipts, certification, stamps and other BIR
documents to concerned officials;
c. Issuing receipts for tax collected; and
d. Submitting annual report and pertinent information to the Congress.

General Powers of the Commissioner

1. Power to interpret tax laws and to decide tax cases
- The power to interpret the provisions of the Tax code and other tax shall be under the
exclusive and original jurisdiction of the Commissioner, subject to the review by the
Secretary of Finance (Sec. 4, NIRC).
Problem
The interpretation of the Tax code issued through BIR rulings shall prevail over the decision
of the Court because to interpret tax laws is within the general powers of the Commissioner.
True or False.

2. Power to examine books and other accounting records and obtain information
- In ascertaining the correctness of any return, or in making a return when none has been
made, or in determining the liability of any person, or in collecting such liability, or in
evaluating tax compliance, the Commissioner is authorized:
a) To examine any book, paper, record, or other data which may be relevant or
material to such inquiry;
b) To obtain on a regular basis from any person other than the person whose internal
revenue tax liability is subject to audit or investigation, or from any office or officer
of the national and local governments, government agencies and instrumentalities,
including the Bangko Sentral ng Pilipinas and government-owned and controlled
corporations, any information;
c) To summon the person liable for tax or required to file a return, or any or employee
of such person, to appear before the Commissioner or his duly authorized
representative at a time and place specified in the summons and to produce such
books, papers, records, or other data, and to give testimony;

Page 1 of 16
 d) To take such testimony of the person concerned, under oath, as may be relevant
or material to such inquiry; and
e) To cause revenue officers and employees to canvass from time to time of any
revenue district or region and inquire after and concerning all persons therein who
may be liable to pay any internal revenue tax, and all persons owning or having the
care, management or possession of any object with respect to which a tax is
imposed.

3. Power to inquire into banks deposits of taxpayers

- The Commissioner is authorized to inquire into the bank deposits of
a) A decedent to determine his gross estate and;
b) Any taxpayer who has filed an application for compromise of his tax liability by
reason of financial incapacity to pay his tax liability. The application to compromise
shall not be considered, unless and until the taxpayer waives in writing his privilege
under R.A. 1405 (Bank Secrecy Law).
4. Power to assess and collect the correct amount of tax
- After the return is filed, the Commissioner or his duly authorized representative may
authorize the examination of any taxpayer and the assessment of the correct amount of
tax. The tax or deficiency tax so assessed shall be paid upon notice and demand from the
Commissioner or his duly authorized representative.

The BIR Commissioner shall declare the tax period terminated, and demand for
immediate payment of the tax due when the taxpayer (Jeopardy Assessment)
1) Retires from business subject to tax;
2) Intends to leave the Philippines;
3) Hides or conceals his property; and
4) Performs any act tending to obstruct the proceedings of the collection of tax for
the past or current quarter, or renders the same totally or partially inefficient.

5. Power not to allow withdrawal of any return, statement or declaration, although the
same may be amended
- Any return, statement or declaration filed in any office authorized to receive the same shall
not be withdrawn. However, the same may be modified, changed, or amended within
three (3) years from the date of such filing, provided that no notice for audit or investigation
of such return, statement or declaration has, in the meantime, been actually served upon
the taxpayer.

6. Power to Delegate
- The BIR Commissioner may delegate the powers vested upon him under the pertinent
provisions of the Tax Code to any subordinate official with a rank equivalent to a division
chief or higher, subject to such limitations and restrictions as may be imposed under the
rules and regulations to be promulgated by the Secretary of Finance, upon the
recommendation of the Commissioner.
The following powers of the Commissioner shall not be delegated:
a) The power to recommend the promulgation of rules and regulations by the
Secretary of Finance;
b) The power to issue first interpretation regarding rulings, or to reverse, revoke or
modify any existing ruling of the Bureau;
c) The power to assign or re-assign internal revenue officers to establishments where
articles subject to excise tax are produced or kept; and
d) The power to compromise or abate any tax liability, except those involving
P500,000 or less or a minor criminal violation.

Page 2 of 16
Multiple choice:
1. The power to interpret the provision of the Tax Code and other tax law shall be under the
exclusive and original jurisdiction of the Commissioner of Internal Revenue subject to review
by:
a. Secretary of Finance
b. Court of Tax Appeals
c. Court of Appeals
d. Municipal courts

2. One of the following does not fall within the powers of the Commissioner of Internal Revenue
a. To interpret tax laws and to decide tax cases
b. To summon, examine and take testimony of persons
c. To make assessment and prescribe additional requirements to tax administration and
enforcement.
d. To review on tax cases decided by the Court of Tax Appeals

3. Which of the following is within the power of the Commissioner to obtain information, to
summon, examine and take testimony of persons?
a. To obtain on a regular basis from any person other than the person whose internal
revenue tax liability is subject to audit or investigation
b. To take such testimony of the persons concerned, under oath, as may be relevant or
material to such inquiry
c. To cause revenue officers to canvass from time to time of any revenue district or region
and require after and concerning all persons therein who may be liable to pay any
internal revenue tax, possession of any object with respect to which a tax is imposed.
d. All of the choices

4. The power to interpret the provision of the National Internal Revenue Code shall be under the
exclusive and original jurisdiction of the
a. Commissioner of the Internal Revenue
b. Secretary of Finance
c. Secretary of Justice
d. Court of Appeals

5. The Commissioner of Internal Revenue cannot (rpcpa)

a. Abate or cancel tax liability
b. Compromise payment of internal revenue taxes
c. Credit or refund taxes erroneously or illegally collected
d. Compromise criminal aspect of tax violation if already filed in court

6. Notwithstanding any contrary provision of R.A. No. 1405 and other general or special laws,
the Commissioner of Internal Revenue is authorized to inquire into bank deposit:
Case 1 – of a decedent to determine his gross estate.
Case 2 – of any taxpayer who has filed an application for compromise of his tax liability by
reason of financial incapacity provided there is waiver of his privilege under R.A. No. 1405 or
under other general or special laws.
a. True in both cases
b. False in both cases
c. True only in the first case
d. True only in the second case

Page 3 of 16
Definition of remedies
“Remedy” is a method by which a cause of action can be enforced by law or equity.
It is the procedure or type of action which may be availed of by the plaintiff as the means to
obtain the relief desired. (Regalado,Remedial Law Compendium, vol 1 p.20)

Types of remedies under the 1997 Tax Code

1. Summary – remedies at the administrative level that are executed without ceremony or delay;
short or concise;
2. Substantive – remedies provided for by laws or regulation; an essential part or constituent or
relating to what is essential;
3. Procedural – remedies involving law of pleading, evidence, jurisdiction, etc.
4. Administrative – remedies available at the administrative (BIR) level;
5. Judicial – remedies that are enforced through judicial action, which may be civil or criminal.

ADMINISTRATIVE REMEDIES OF GOVERNMENT

A. Power to Assess
The power to assess and collect the correct amount of tax is vested with the Commissioner
of Internal Revenue under the Tax Code. After the return is filed, the Commissioner or his duly
authorized representative may authorize the examination of any taxpayer and the assessment of
the correct amount of tax.

“Assess’ means to impose a tax; to charge with a tax; to declare a tax to be payable; to
apportion a tax to be paid or contributed, to charge a certain sum to each taxpayer; to settle
determine or fix the amount of tax to be paid.

ASSESSMENT, determination of tax liability by considering the gross taxable amount, the deductions
allowed and the applicable tax rate.
- Self-assessment, reported in the Tax Return filled up by the taxpayer.
- Deficiency assessment, made by the government tax assessor himself whereby the correct
amount of the tax is determined after examination or investigation is conducted.
- Jeopardy assessment, issued by the Commissioner without waiting for the prescribed date of
filing and payment when it comes to his knowledge that a taxpayer is leaving the Philippines
or to remove his property there from or to hide or conceal his property.

Presumption of correctness
The assessments made by the Commissioner and his authorized agents are presumed
correct. The burden of proof to show the incorrectness or inaccuracy of such assessments or the
details thereof lies on the taxpayer.

Prescribed period of Assessment

The period of assessment refers to the time allowed by the law to appraise and determine the
total value or amount of the subject of taxation.
Assessment made outside the allowed period is not valid, and the results or findings of the
examination cannot be implemented. In the event assessment is made outside the allowable period,
the taxpayer can raise the defense that the right of the government to assess has already lapsed or
prescribed.

The assessment periods allowed under the NIRC are as follows:

1. Three (3) years from the date of filing the return. The three-year period applies when a
correct tax return has been filed. It is computed as follows:
a. If the return was filed before the last day of filing, the three-year period will start after
the last day of filing the return.
b. If the return was filed after the mandated period of filing, the three-year period of
assessment will start from the date of filing the return.
Page 4 of 16
 2. Ten (10) years from the date of discovery or omission.
This period applies under the following instances:
a. Failure to file a return
b. Return filed was false or fraudulent with the intention to evade the tax.

3. Agreement on assessment period. Before the expiration of the three-year period, the BIR
Commissioner and the taxpayer may agree in writing on the assessment period.

Effect of filing an amended return

The taxpayer is granted the right to file an amended return, statement of declaration,
subject to the following conditions:
a. the amendment shall be made within three years from the date of filing of the original
return, statement or declaration; and
b. No notice of audit or investigation of such return, statement of declaration has, in the
meantime, been actually served upon the taxpayer.

The Supreme Court held that where the amended return is substantially different from
the original return, the right of the BIR to assess the tax is counted from the filing of amended
return.

Multiple choices:
1. A notice to the effect that the amount therein stated is due from a taxpayer as a tax with a
demand for payment of the same within a stated period of time
a. Assessment
b. Forfeiture
c. Audit engagement letter
d. Institution of criminal action

2. Where a return was filed, as a general rule, the prescriptive period for assessment after the
date the return was due or was filed, whichever is later, is within? (rpcpa)

3. Anton filed her 2028 income Tax Return and paid the tax due thereon on April 1,2029. The
last day for the Bureau of Internal Revenue to send and assessment is?

4. Mr. Pampi filed an income tax return for the calendar year 2028 on March 10, 2029. The BIR
assessed a deficiency income tax on April 10, 2031. When is the last day for the BIR to make
an assessment? (rpcpa)

5. Carlos filed his Income Tax Return (ITR) for taxable year 2028 on May 2,2029. After an
investigation, it was discovered that the tax paid was deficient. The last day for the BIR to
send an assessment is?

6. Cris filed her 2028 Income Tax Return (ITR) on April 10,2029. On June 20,2029, she filed an
amended return which is substantially different from the original return. The last day to
release, mail or sent an assessment is?

7. The amount of tax still due (net of withholding tax of P20,000) in the 2021 tax return of Early
is P3,560. She paid said amount on June 14,2022. On May 12,2022 she filed an amended
return which is not substantially different from the original. If the last day for the BIR to make
an assessment is April 15,2025, the original return must have been filed by Early on?

8. Cosa file a fraudulent income tax return for the year 2028 on April 11,2029. The Bureau of
Internal Revenue (BIR) discovered the fraud on February 20,2030. The last day for the BIR
to collect or to send as assessment notice is?
Page 5 of 16
 9. The income tax payable (net of withholding tax of P29,500) in the 2028 tax return of Tolits is
P1,950. He filed the return on April 8,2029. Assuming he paid the balance in the tax return
on June 28,2029, the last day for the BIR to make an assessment is?

10. Chipipi file her Income Tax Return (ITR) for taxable year 2029 on March 20,2030. Assuming
that the return filed is not false or fraudulent, the last day for the Bureau of Internal Revenue
(BIR) to make an assessment is?

Assessment Process
The assessment process starts with the self-assessment by the taxpayer of his tax liability,
the filing of the tax return, and the payment of the entire tax due shown in his tax return in accordance
with the methods and within the dates prescribed in the law and regulations.
The role of the government in the assessment process includes the following:
1) Examination of books of accounts and other accounting records of taxpayers by revenue
officers to determine correct tax liability.

2) Preparation of tentative findings and holding of informal conference – to be sent by the

Revenue officer to the taxpayer with noted tax discrepancy.
The taxpayer is given 15 days to respond from date of receipt of the notice for unofficial
meeting. Failure to respond will warrant endorsement of the case to assessment
Division of the Revenue Office for appropriate action.

3) Issuance of Preliminary Assessment Notice (PAN). - if the result of the review conducted
by the Assessment Division has established sufficient basis to assess the taxpayer for any
deficiency tax, the preliminary assessment notice shall be served to the taxpayer or
through the registered mail.
The taxpayer is given 15 days from receipt thereof to contest the amount being
assessed. Failure to respond will warrant the issuance of Formal Letter of Demand
(FLD) of Payment together with the assessment showing the computation inclusive of
the applicable penalties.

4) Reply – for purposes of contesting in writing the findings of the revenue officers contained
in a PAN, the regulations used the term “reply” to distinguish the written objection(s)
against a FAN issued by the BIR, where the generic term “protest” or the specific term
“request for reconsideration” or “request for reinvestigation” is utilized.

5) Issuance of Formal Assessment Notice (FAN) and letter of demand. – The formal letter of
demand assessment notice shall be issued by the Commissioner or his duly authorized
representative. The letter of demand calling for payment of the taxpayer’s deficiency
tax(es) shall state the facts, the law, rules and regulations, or jurisprudence on which
assessment is based; otherwise, the formal letter of demand and assessment notice shall
be void.

B. Power to collect Taxes

The remedies of the government for the collection of national internal revenue taxes
can be classified into administrative remedies and judicial remedies.
 The administrative remedies are:
1) Tax lien;
2) Distraint of personal property, or levy of real property, or garnishment of bank
deposits;
3) Sale of property;
4) Forfeiture;
5) Compromise and abatement;
Page 6 of 16
 6) Penalties and fines; and
7) Suspension of business operations.

 The judicial remedies of the government are civil action and criminal action.

Tax Lien
“Tax lien” is understood to denote a legal claim or charge on property, either real or
personal, as security for the payment of some debt or obligation.

Distraint of personal property

Distraint is a remedy whereby the collection of delinquent taxes is enforced on the goods,
chattels or effects and other personal property of whatever character of the taxpayer, including
stocks and other securities, debts, credits, bank accounts and interests in and rights to
personal property.
a) Actual distraint is resorted to when at the time required for payment; a person fails to pay
his delinquent tax obligation. Distraint consists in the actual seizure and taking possession
of personal property of the taxpayer.
b) Constructive distraint is issued where no actual tax delinquency of the taxpayer is
necessary before the same is resorted to by government. It may be availed of when:
a. The taxpayer is retiring from any business subject to tax;
b. He intends to leave the Philippines;
c. He removes his property there from; or
d. He performs any act tending to obstruct the proceedings for collecting the tax due
or which may be due from him.

Constructive distraint shall be affected by requiring the taxpayer or any person having
possession or control of the personal property to sign a receipt covering the property distraint
and obligate himself to preserve the same intact and unaltered and not to dispose of the same
in any manner whatever, without the express authority of the Commissioner.

Guidelines in Effecting and Administering Distraint

a. If the amount involved is P1,000,000 or less the Revenue District Officer shall
administer the distraint
b. However, if the amount involved is more than P1,000,000, the BIR Commissioner or
his/her duly authorized representative will administer the distraint.

Levy of Real Property

Levy or Real property is the seizure by the government of real property in order to
enforce the payment of taxes. As in distraint, the property may be sold at a public sale if, after
seizure, the taxes are not voluntarily paid.

Levy and distraint

 Both are administrative remedies and cannot be availed of where the amount of tax
involved is not more than P100.
 Distraint is enforced on personal property of the taxpayer, while levy is enforced on the
real property.
 The taxpayer is not given the right of redemption with respect to distraint personal
property, while such right is granted in case of real property levied upon and sold, or
forfeited to the government.
 Levy may be made before, simultaneously or after distraint.

Forfeiture
Forfeiture of Confiscated Article implies taking of property without compensation as a
result of an offense committed.

Page 7 of 16
 Compromise
Compromise is a contract whereby the parties, by reciprocal concessions, avoid
litigation or put an end to one already commenced.
The tax code provides that the Commissioner may 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 taxpayer and the BIR may agree to compromise the following cases:
1. Delinquent accounts;
2. Cases under administrative protest after issuance of the Final assessment Notice to
the taxpayer which are still pending in the Regional Offices, Revenue District Office,
Legal Service, Large Taxpayer Service, Collection Service, Enforcement Service and
other officers in the National office;
3. Civil tax cases disputed before the courts
4. Collection cases filed in courts; and
5. Criminal violations, other than those already filed in court, or those involving criminal
tax frauds. (Rev. Reg. No. 30-2002)

Minimum Regulation No. 7-2001 provides the following minimum compromise rate on tax
compromise settlement:
1. 10% of basic tax assessed due to financial incapability for
a. An individual taxpayer whose only source of income is from employment and
whose monthly salary, if single, is P10,500 or less, or if married, whose salary
together with his spouse is 21,000/month, or less; the taxpayer, however, must
possess no other leviable/distraintable assets, other than his family home;
b. An individual without any income;
c. Zero net worth, negative net worth;
d. Non-operating companies for a period of 3 years or more as the date of application
for compromise.
2. 20% of basic tax assessed due to financial incapability for
a. Dissolved corporation;
b. Non-operating companies for a period of less than 3 years; and
c. Corporations declared insolvent or bankrupt.
3. 40% of assessed tax due to financial incapability for surplus or earnings deficit resulting to
impairment in the original capital at least 50%
4. 40% for doubtful validity of assessment

Abatement
The authority of the Commissioner to cancel the tax liability of the taxpayer based on
the following:
1. When the tax or any portion thereof appears to be unjustly or excessively assessed
2. When the administration and collection costs involved do not justify the collection
of the amount due
Multiple choices:
1. The following remedies are available to the government to collect taxes except (rpcpa)
a. Distraint and levy
b. Inquiring into bank deposit accounts of taxpayers
c. Entering into compromise of tax cases
d. Enforcement or forfeiture of property

2. Which of the following is not an extrajudicial remedy of the government against the taxpayer
a. Distraint of personal property
b. Levy of real property
Page 8 of 16
 c. Garnishment of bank accounts
d. Filing of criminal case in court

3. The seizure by the government of real property and interest on rights to property of the
taxpayer to enforce the payment of taxes followed by its public sale
a. Confiscation
b. Distraint
c. Forfeiture
d. Levy

4. The property of a delinquent taxpayer shall not be placed under constructive distraint by the
Commissioner of Internal Revenue if in his opinion the taxpayer is
a. Retiring from any business subject to tax;
b. Intending to leave the country or to remove his property therefrom;
c. Doing all possible means to dispute the assessment
d. Performing an act tending to obstruct the proceedings for collecting the tax due.

5. The remedies of distraint and levy cannot be availed of where the amount of tax involved is
not more than
a. P1.00
b. 10.00
c. 100.00
d. 1,000.00

6. The following are coercive means in the collection of taxes by the BIR, except one: (rpcpa)
a. Distraint and levy
b. Seizure of goods which the government has a claim for unpaid taxes
c. Enforcement of tax lien
d. Compromise

7. The summary remedies of distraint of personal property shall be exercise by the

Commissioner of Internal Revenue if the amount involve is in excess of
a. P10,000
b. 100,000
c. 1,000,000
d. 10,000,000
8. Which of the following violations cannot be subjected to compromise penalties? (rpcpa)
a. Failure to keep/preserve books of accounts and accounting records
b. Failure to keep books of accounts or records in a native language or English
c. Failure to have books of accounts audited and have financial statements attached to
income tax return certified by independent CPA
d. Keeping two sets of books of accounts or records

9. A contract whereby the taxpayer and the government by reciprocal concessions avoid a
litigation or put an end to one already commenced
a. Confiscation
b. Compromise
c. Distraint
d. Suspension of action

10. Which of the following statements is not true? (rpcpa)

a. If a taxpayer is acquitted in a criminal violation of the tax Code, this acquittal does not
exonerate him from his civil liability to pay the taxes
b. A conviction for tax evasion is not a bar for collection of unpaid taxes

Page 9 of 16
 c. A tax assessment is necessary to a criminal prosecution for willful attempt to defeat
and evade payment of taxes.
d. Criminal proceedings under the Tax Code is now a mode of collection of internal
revenue taxes, fees or charges.

SURCHARGE
Tax surcharge are classified as simple neglect and willful neglect.

A. Simple Neglect – 25% surcharge

A simple neglect surcharge of twenty five percent in addition to tax assessed to be
paid shall be imposed when the taxpayer:
1) Fails to file any return and pay the tax due thereon;
2) Files income tax returns with an internal revenue officer other than with whom
the return is required to be filed;
3) Fails to pay the deficiency tax within the time prescribed for its payment in the
notice of assessment, or
4) Fails to pay the full or part of the amount of tax shown on any return required
to be filed, or the full amount of tax due for which no return is required to be
filed, on or before the prescribed date for its payment. (sec. 248a,NIRC)

B. Willful Neglect – 50% of the tax or the deficiency tax.

A willful neglect surcharge of fifty percent in addition to tax assessed to be paid shall
be imposed when the taxpayer:
1) Willfully (intentionally) neglects to file the return with the period prescribed by
the tax code or by rules and regulations, or
2) Presents false or fraudulent return to the BIR.(sec. 248b, NIRC)

Failure to report sales, receipts, or income in an amount exceeding thirty percent (30%) of
that declared per return, and a claim of deduction in an amount exceeding thirty percent
(30%) of actual deductions, shall render the taxpayer liable for substantial understatements
of sales, receipts or income or for overstatements of deductions, as mentioned herein. (sec.
248, NIRC)

INTEREST
In general, rules and regulations require that from the date prescribed for payment until the
amount is fully paid may prescribe an interest of twelve percent per annum or such higher rate
as determined by the BIR. A twelve percent (12%) per annum shall be imposed on the basic
unpaid after due date. (sec 249,NIRC) as amended by the TRAIN law.

Informer’s Reward
10% of revenue recovered or 10% of fair value of smuggled goods confiscated, but in no case to
exceed P1,000,000. This is subject to 10% final withholding tax.

Multiple choices:
1. Which statement is wrong? The surcharge of 25% is imposed if (RPCPA)
a. A tax return was not filed within the time prescribed by law
b. A tax was not paid within the time prescribed by law
c. A tax return was not filed within the time prescribed by law and at the same time the tax
was not paid within the time prescribed by law
d. None of the above

2. For filing a false and fraudulent tax return, a surcharge is imposed. Which of the following is
correct? (RPCPA)
a. 50% as administrative penalty
b. 50% as criminal penalty
Page 10 of 16
 c. 25% plus 50%
d. 25% as criminal penalty

3. In which of the following cases where the civil penalties of 25 or 50 imposed by the Tax Code
is not applicable? (RPCPA)
a. In case a false or fraudulent return is willfully made.
b. Failure to pay the full amount of tax shown on any return required to be filed under the law.
c. Failure to file certain information required by the tax code.
d. Failure or willful neglect to file the tax return within the period prescribed by law.

4. Lebron, a resident of Manila, filed her income tax return for taxable year 2021 on June 15,
2022 in Naga City. If the amount of tax shown thereon is P12,000, the total penalty (exclusive
of interest) is?

5. Taxpayer Dwane and did not file his income tax return for taxable year 2020 on time. On June
15, 2022, he was notified by the Bureau of Internal Revenue of his failure to file the return.
Taxpayer Dwane filed the return and paid the tax on July 15, 2022. Assuming that the basic
tax is P120,000 the total among payable is?

Numbers 6 and 7 are based on the following information:

Taxable year 2020
Date of filing and payment April 10,2021
Amount of tax paid P120,000
Correct amount of tax due 150,000
Deficiency tax is payable per assessment October 15,2022
Date of deficiency tax was paid October 15,2022

6. The amount of tax still due as of October 15, 2022 is?

7. Assuming that the deficiency tax was paid on December 15, 2022 the total amount payable
is?

Numbers 8 and 9 are based on the following information:

Taxable year 2029
Date of filing and payment April 5, 2030
Amount of tax paid P150,000
Correct amount of tax due 300,000
No protest was filed on preliminary assessment notice
Date assessment notice was issued May 2, 2031
Date of payment in final assessment June 15, 2031

8. The amount payable in the notice of assessment is?

9. Assuming that the tax was paid on September 15, 2031 the total amount payable is?

Numbers 10 through 12 are based on the following information:

Amount of tax due, P800,000
No return for TY 2021 was filed.
Taxpayer’s permission for an extended payment and to pay in installment was granted.
Partial payment made on October 15,2022 was P320,000.
Date BIR demanded payment of the balance on January 15,2023.

10. The amount due on October 15, 2022 before partial payment is made.

11. The unpaid balance as of January 15, 2022 is?

Page 11 of 16
 12. Assuming that the taxpayer paid the balance on February 15, 2023. The amount to be paid by
him is?

13. Miss Palacio filed her 2020 income tax return and paid the tax thereon in the amount of
P100,000 on July 15, 2021. How much is the total penalties in the form of interest collectible
from her? (RPCPA)

14. Mr. No filed his income tax return for 2021 and paid the tax thereon on March 15, 2022. On
May 10, 2022, the BIR enforcement officer with letter of authority to examine his tax return for
2019 visited him. He accommodated the BIR examiner and after the examination of is
accounting records, it was found out that he was still liable for a deficiency income tax of
P40,000 which he agreed. On June 15, 2022, he received a notice and demand for payment
of the said deficiency tax within one (1) month thereof. Mr. No paid the assessment on October
15, 2022. How much total interest did Mr. No pay on account of his deficiency and
delinquency? (RPCPA)

15. Virginia Miranda filed her tax return and paid the tax thereon in full on April 15, 2021.
Subsequently, she received an assessment notice and demand from the BIR to pay a
deficiency tax of P20,000 on or before April 15, 2022. Miranda requested for an extension of
3 months within which to pay it and her request was granted. How much interest is Miranda
liable on her deficiency if she paid the deficiency tax three (3) months after April 15, 2022?

REMEDIES OF TAXPAYER

Administrative remedies
The legal remedies available to taxpayers at the administrative level will depend of whether or
not payment of the tax deficiency tax assessment was made.

Before payment of the deficiency tax assessment

The taxpayer’s remedy is to file a written protest within thirty (30) days from date of receipt
of the formal assessment notice. The timely filing of the written protest against the assessment is
mandatory; otherwise the assessment will become final (sec. 228, NIRC)

Within 60 days from the filing of the protest, taxpayer shall submit all relevant supporting
documents, otherwise the assessment becomes final.

After payment of the deficiency tax assessment was made

His remedy is to file a written claim for refund or tax credit with the appropriate government
agency – the BIR or the DOF one Stop Shop Center. The taxpayer need not pay the deficiency tax
assessment under protest nor is he required to write a letter to the BIR protesting said assessment at
the time of payment (sec. 204(c) and 229, NIRC)

The credit or tax refund remedies shall be filed in writing with the Commissioner within 2
years after the payment of tax or penalty.(sec.229 and 230, NIRC)

If the tax is paid on installment basis, the two-year period shall be counted from the date of
last payment.

The period for claiming refund is suspended when

1. There is a pending litigation between the government and the taxpayer.
2. The Commissioner abides by the decision of the Supreme Court as to the collection of the
tax.

Page 12 of 16
 The Commissioner may, even without a written claim therefore, refund or credit any tax, where on
the face of the return upon which payment made, such payment appears clearly to have been
erroneously made.

Judicial remedies

Before payment of the deficiency tax assessment

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 the one hundred eighty (180) days period; otherwise, the decision
shall become final, executory and demandable (sec. 228, NIRC)

Decision of the Court of Tax Appeals is appealable to the Supreme Court through a petition
for review by certiorari within 15 days from receipt of the CTA decision.

After payment of the deficiency tax assessment was made

Appeal to the CTA. The taxpayer, within 30 days from an unfavorable decision of the BIR on
the claim for refund, may file an appeal to the CTA

Decision of the Court of Tax Appeals is appealable to the Supreme Court through a petition
for review by certiorari within 15 days from receipt of the CTA decision

Principle
As a general rule, no court shall have authority to grant an injunction to restrain the collection of any
national internal revenue tax, fee or charge imposed by NIRC.
Exemption:
When the following requisites for injunction are met:
1. that the collection of the tax may jeopardize the interest of the government and/or the taxpayer
2. that the taxpayer is willing to deposit the amount equal to the taxes assessed or to file a bond
amounting to not more than twice the value of the tax being assessed.
3. That the CTA may issue injunction only in the exercise of its appellate jurisdiction.

Multiple choices:
1. A pre-assessment notice is required
a. Before a final notice of assessment is sent to the taxpayer
b. When a discrepancy has been determined between the tax withheld and the amount
actually remitted by the withholding agent
c. When an article locally purchased or imported by an exempt person has been sold, traded
or transferred to non-exempt persons.
d. When the deficiency tax is the result of mathematics errors in the computations appearing
on the face of the return

2. Before a formal Notice of Assessment is issued, the taxpayer is required to respond to the
Preliminary Assessment Notice within a period of?

3. Given the following actions of a revenue officer during an informal conference and prior to the
issuance of a Preliminary Assessment Notice (PAN):
I. He submits written report to the Revenue District Officer.
II. Revenue Officer informs the taxpayer of his findings as well as factual and legal bases.
III. He prepares a report of examination based on the results of meeting with taxpayer, after
considering factual and legal explanation of taxpayer.

The above actions are arranged chronologically as follows:

Page 13 of 16
 a. III, I, II c. II, III, I
b. I, III, II d. I, II, III

4. The taxpayer filed his 2019 income tax return on April 14, 2020. On May 20, 2021, he received
an assessment from the BIR. The last day for him to file a request for reconsideration is?

Numbers 5 through 7 are based on the following information:

Date of filing the income Tax Return March 28,2019
Date assessment was received June 20,2021
Request for reconsideration was filed July 4,2021

5. The last day for the taxpayer to submit relevant supporting documents is?

6. Assuming that the taxpayer submitted the documents supporting his motion on August 26,
2021. The Bureau of Internal Revenue should act on the protest not later than?

7. Assuming that the BIR did not act on the protest, the last day for the taxpayer to appeal to the
Court of Tax Appeals is?

8. Where any national internal revenue tax is alleged to have been erroneously or illegally
collected the taxpayer should first: (RPCPA)
a. File a claim for refund or credit
b. File an action for refund with the RTC
c. File an action for refund with the CTA
d. File an action for refund with CA

9. From the date of payment, claim for refund of taxes erroneously or illegally received penalties
imposed without authority must be filed within?

10. The last day for the taxpayer to claim refund if the tax was paid in two (2) installment is?

11. Date of tax erroneously paid April 15, 2019

Date of claim for refund was filed with BIR February 18, 2020
Date of BIR decision of denial was received March 5, 2021

The last day to appeal to the Court of Tax Appeals is?

12. Date of erroneously paid June 10, 2019

Date of claim for refund was filed with BIR March 3, 2021
Date of BIR decision of denial was received April 5, 2021

Last day to appeal to the Court of Tax Appeal is? (RPCPA) –

13. Date of tax erroneously paid June 20, 2019

Claim for refund was filed with the BIR January 17, 2021
Received BIR decision of denial June 3, 2021

The last day to appeal to the Court of Tax Appeals is?

14. Michael filed his tax return and paid the tax erroneously (overpayment) on June 14, 2019. He
filed a claim for refund with the BIR on July 5, 2020. If the last day for him to appeal to the
Court for Tax Appeals is April 10, 2021. Michael received the BIR decision on?

15. Miss de Vera paid excessive tax on April 15, 2021. On December 20, 2022 he filed a written
claim for refund. Her claim was denied by the BIR and she received the denial on March 20,
Page 14 of 16
 2023. Miss de Vera filed a motion for reconsideration with the BIR on March 31, 2022. On
April 18, 2023, she received the final denial of the BIR. What will be the taxpayer’s remedy?
(RPCPA)
a. File another motion for reconsideration with the BIR within 30 days after the receipt of the
final denial.
b. File an appeal with the CTA within 30 days after the receipt of the final denial.
c. File an appeal with the CTA within 15 days after the receipt of the final denial
d. The taxpayer has no more remedy against the final denial.

THE COURT OF TAX APPEALS

Republic Act 9282 which took effect on April 22, 2004 expanded the jurisdiction of the Court
of Tax Appeals. Some of the salient features of this law are the following:
1. It shall be of the same level as the Court of Appeals;
2. It shall be composed of a Presiding Justice and five (5) Associate Justices, four (4) Justices
shall constitute a quorum for sessions en banc;
3. It shall be divided into two (2) divisions, each division consisting of three (3) Justices; two (2)
Justices shall constitute a quorum for sessions of a Division.
4. The affirmative votes of four members of the Court en banc or two members of a Division, as
the case may be, shall be necessary for the rendition of a decision or resolution.
5. The decision of a Division may be appealed to the Court en banc.
6. The decision of the Court en banc is appealable to the Supreme Court.

Jurisdiction
1. Exclusive original jurisdiction
a. Over all criminal cases arising from violations of the NIRC and other laws administered
by the Bureau of Internal Revenue (BIR) where the principal amount of taxes and fees
(exclusive of charges and penalties) claimed is not less than One Million Pesos
(P1,000,000);
b. For the same amount of claim, over tax collection cases involving final and executory
assessments for taxes, fees, charges and penalties.

2. Exclusive appellate jurisdiction

To review on appeal decisions of the Commissioner of Internal Revenue (CIR) in cases
involving disputed assessments, refunds of internal revenue taxes, fees or other charges,
penalties, or other matters. In case of inaction by the BIR where the NIRC provides a specific
period of action, the inaction shall be deemed a denial and the CTA has the jurisdiction to
review the same.

Multiple choices:
1. Which of the following cases falls within the jurisdiction of the Court of Tax Appeals? (RPCPA)
a. Criminal action for violation of the NIRC.
b. Question of whether or not to impose a deficiency tax assessment upon a taxpayer.
c. Appeal from undisputed tax assessment
d. Action for refund of real property tax

2. Statement 1 The decision of one division of the Court of Tax Appeals may be reviewed on
appeal by the court en banc.

Statement 2: The Court of Tax Appeals is inferior to the Court of Appeals but it is in the same
level with the Supreme Court.
a. True, False c. False, True
b. True, True d. False, False

3. The Court of Tax Appeals is composed of –

a. One Presiding Judge and two (2) associate judges.
Page 15 of 16
 b. One Presiding Judge and five (5) associate judges.
c. One Presiding Judge and two (2) associate justices
d. One Presiding Justice and five (5) associate justices.

4. 1st Statement: When the justices of the Court of Tax Appeals sit in two (2) divisions, each
division shall be composed of three (3) justices; the presence of two (2) will constitute a
quorum and the vote of the two are required to render a decision.

2nd Statement: When the justice of the Court of Tax Appeals sit en banc, the presence of four
(4) constitute a quorum and the vote of four (4) justices are required to render a decision.
a. True, False c. False, True
b. True, True d. False, False

5. Which of the following statements is correct? The Court of Tax Appeals

a. Examination of returns and determination of tax due
b. Conduct inventory-taking and surveillance
c. Compromise tax cases
d. Inquire into bank deposit accounts

6. Angel, Bea and Carlene were assessed by the Commissioner of Internal Revenue in the
amount of P50,000 each, Bea and Carlene appealed the assessment to the Court of Tax
Appeals while Angel did not do so. The Commissioner decided to enforce the collection of the
tax liabilities of the three. Accordingly, Angle filed a petition for injunction before the Regional
Trial Court to restrain the Commissioner from enforcing the collection. Bea and Carlene filed
their separate petitions for injunction with the Court Tax Appeals.
a. The petition filed by Angel with the Regional Trial Courts is correct
b. The petition filed by Bea and Carlene with the Court of Tax Appeals in meritorious
c. The Court of Tax Appeals did not acquire jurisdiction because Bea and Carlen did not
dispute the assessment, hence, it has become final.
d. Both the petition file with the Regional Trial Court and the Court of Tax Appeals are
meritorious.

7. Statement 1: The decision of the Commissioner of Internal Revenue on tax cases maybe
appealed to the Court of Tax Appeals within a period of not exceeding thirty (30) days from
receipt of the decision.

Statement 2: The period to appeal to the Court of Tax Appeals may be extended, upon leave
of court, for a period exceeding thirty (30) days.
a. Only the first statement is false c. Both statements are false
b. Only the first statement is true d. Both statements are true

8. A taxpayer received, on February 14, 2021, on assessment for an internal revenue tax
deficiency. Which of the following is a proper action of the taxpayer?
a. File a petition for review with the Court of Tax Appeals not later than March 16, 2021.
b. File a protest not later than March 16, 2021 with the Commissioner of Internal Revenue
c. File a case against the Commissioner with the Regional Trial Court not later than 30 days
from receipt o such assessment.
d. File a petition for review with the Court of Tax Appeals not later than March 14, 2021.

Page 16 of 16