1) Make Assessments and Prescribe Additional Requirements for Tax Administration and

Enforcement.
 After a return has been filed as required under the provisions of this Code, the Commissioner or his
duly authorized representative may authorize the examination of any taxpayer and the assessment of
the correct amount of tax: Provided, however, That failure to file a return shall not prevent the
Commissioner from authorizing the examination of any taxpayer.
 Best Evidence obtainable - in case a person fails to file a required return or other document at the
time prescribed by law, or willfully or otherwise files a false or fraudulent return or other document, the
Commissioner shall make or amend the return from his own knowledge and from such information as
he can obtain through testimony or otherwise, which shall be prima facie correct and sufficient for all
legal purposes.
1. Refers to third party information which are relevant.
 Authority to Conduct Inventory-taking, Surveillance.
1. Basis: if there is reason to believe that such person is not declaring his correct income, sales
or receipts for internal revenue tax purposes.
2. Usually applicable to entities subject to Excise tax.
 Authority to Prescribe Presumptive Gross Sales and Receipts.
1. Basis: if there is reason to believe that such person is not declaring his correct income, sales
or receipts for internal revenue tax purposes.
2. BIR usually looks at all the other entities within the same industry in order to compare figures.
3. Example: X is engaged in furniture making, and there are other entities which are also
engaged in the same business. If BIR notices that the sale of X is declining while all the other
business’ sale are increasing, then BIR make impose presumptive sales on X.
4. The findings may be used as the basis for assessing the taxes for the other months or quarters
of the same or different taxable years and such assessment shall be deemed prima facie
correct.
 Authority to Terminate Taxable Period
1. Authority to issue an assessment (Jeopardy Assessment) right away without the benefit of an
audit when the BIR believes that the prescriptive period for making an assessment is about to
expire and the government will be prejudice for reason of the delay attributable to the
taxpayer.
2. Usually resorted to when taxpayer is:
 Retiring from business subject to tax
 Intending to leave the Philippines
 Intending to remove his property therefrom or to hide or conceal his property,
 Performing any act tending to obstruct the proceedings for the collection of the tax
for the past or current quarter or year or to render the same totally or partly
ineffective unless such proceedings are begun immediately.
 Power to prohibit the withdrawal of returns, statements or declarations filed with the BIR.
1. Any return, statement or declaration filed in any office authorized to receive the same shall not
be withdrawn Provided:
 That within three (3) years from the date of such filing, the same may be modified,
changed, or amended;
 That no notice for audit or investigation of such return, statement or declaration has,
in the meantime, been actually served upon the taxpayer.
2) Authority of the Commissioner to Prescribe Real Property Values
 The CIR is authorized to divide the Philippines into different zones or areas and shall, upon consultation
with competent appraisers both from the private and public sectors, determine the fair market value of
real properties located in each zone or area.
1. Taxes which requires the BIR to determine the values:
 CGT on real property transactions
 Estate taxes
 Donor taxes
 For purposes of computing any internal revenue tax, the value of the property shall be, whichever is
the higher of:
1) the fair market value as determined by the Commissioner; or
2) the fair market value as shown in the schedule of values of the Provincial and City Assessors.
 BIR has no power over assessors.