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Reynaldo G. Geronimo
Partner
Tax Remedies
Under the NIRC
(Administrative Level)
What is meant by tax remedies?
The term tax remedies refers to the actions and processes that the Government
may undertake to enforce the collection of legitimate taxes and those that taxpayer may
take or pursue in order to resist the payment of what he considers are unlawful taxes.
At which stage of taxation, does the subject of Tax Remedies come in?
The subject of Tax Remedies comes in the last stage, namely, at the stage or
phase of Collection, after the earlier stage of Levy.
General Outline
A. Peacetime preparation for battle
B. Actual Combat
1. Opening moves
2. Middle Game
3. End Game
C. Clearing the battlefield
A.
Maneuvers of Taxpayer
and
Government during peace time
3. Inspects/ examines the books of account; for income tax purposes, inspection is
persons;
1.Power to interpret the provisions of the Tax Code and other tax laws- under the
exclusive and original jurisdiction of the Commissioner, subject to review by the Sec. of
Finance;
2. Power to obtain information and to summon, examine and take testimony of
persons;
3. Authority to conduct inventory-taking, surveillance and prescribe presumptive
gross sales and receipts;
Duty to ensure the provision and distribution of forms, receipts, certificates and
The taxpayer computes for himself his on tax liability correctly and, to inform the
Government of his calculations, files the required internal revenue return and pays the
tax;
Either the Government believes the taxpayer paid less that what should have been
paid,
Or the taxpayer believes he had paid or been made to pay more than what he is
When the Commissioner or his duly authorized representative finds that proper
taxes should be assessed, he must first notify the taxpayer of his findings.
This is called a pre-assessment notice (PAN).
When is a pre-assessment notice of PAN not required?
A PAN is not required:
When the finding for any deficiency tax is the result of mathematical error in the
When a discrepancy has been determined between the tax withheld and the
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 against the estimated tax liabilities for the
taxable quarter or quarters of the succeeding taxable year;
When the excise tax due on excisable articles have not been paid;
When an article locally purchased or imported by an exempt person has been sold,
The taxpayer shall be informed in writing of the law and the facts on which the
The taxpayer shall be required to respond to the said notice within 15 days from
Notice to the taxpayer stating the amount that is due from him;
An affidavit, which was executed by the revenue officers stating the tax liability of
the taxpayer and attached to the criminal complaint for tax evasion is not an
assessment.
A letter transmitting the computation by a revenue officer of the liability and giving
1. In case of a (a) false or fraudulent return with intent to evade tax or (b) failure to
file a return, the tax may be assessed (and a collection case may be filed in court) at
any time within 10 years after the discovery of the falsity, fraud or omission
2. If, before the expiration of 3-year prescriptive period, the Commissioner and the
taxpayer agree in writing to its assessment after such time, the assessment may be
made within the agreed period or its agreed extensions.
In what other instances is the prescriptive period to assess and collect suspended?
During the time that the Commissioner is prohibited to do so and for 60 days
thereafter;
Commissioner;
When taxpayer cannot be located in the address stated in the return, when
taxpayer is out of the Philippines, and, as for collection only, when no property can be
located.
What is the effect of the Governments failure to issue an assessment within the proper
period?
No proceeding in court without assessment for the collection of taxes shall be
begun after the expiration of the three (3) years after the last day prescribed for the filing
of the relevant tax return.
What is the effect of the neglect or refusal of the taxpayer to pay an internal revenue tax
after demand?
The tax due becomes a lien in favor of the Government from the time when the
assessment was made by the Commissioner until paid, with interests, penalties, and
costs that may accrue in addition thereto upon all property and rights to property
belonging to the taxpayer.
What is the effect of the tax lien on third parties?
The lien shall be not be valid against any mortgagee, purchaser, or judgment
creditor until notice of such lien shall be filed by the Commissioner in the office of the
Register of Deeds of the province or city where the property of the taxpayer is situated
or located.
III
The Exchange of
Heavy Artilery Fire
What are the remedies that the government may take to enforce collection of taxes?
What is the remedy of the taxpayer who does not agree with the tax assessment?
Before payment: Dispute the assessment within 30 days from receipt; if protest is
denied or unacted upon within 180 days from the Commissioners receipt of all the
papers, taxpayer may appeal to the Court of Tax Appeals within 30 days from receipt of
decision or lapse of the 180-day period.
2. After payment: Taxpayer may claim for a refund within two (2) years from date of
payment; if claim is denied, or is not acted upon within the said two year period, the
taxpayer may appeal to the Court of Tax Appeals through a Petition for Review within 30
days from receipt of the denial, or, if the refund was not acted upon, appeal to the Court
of Tax Appeals prior to the expiration of the 2-year period.
IV
Surrender of the Taxpayer
What are the administrative remedies of the taxpayer against the collection of taxes?
The taxpayer may offer to compromise his civil and criminal liability (except for
those where a case has already been filed and those involving fraud) on grounds of (a)
doubtful validity of assessment, and/or (b) clear inability to pay;
The taxpayer may also ask for abatement upon showing that (a) tax has been
unjustly or excessively assessed and/or (b) cost of collection does not justify collection
Thank You
and
Good Luck