TAX REMEDIES

By: dqesguerra
REMEDIES OF THE GOVERNMENT

SEC. 204. Authority of the Commissioner to Compromise, Abate and Refund

or Credit Taxes. - The Commissioner may -(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
REMEDIES OF THE GOVERNMENT

The grounds for compromise are:

1. Doubtful validity of the claim against the taxpayer, or
2. Financial incapacity of the taxpayer

A compromise is an extra-judicial settlement of the taxpayer’s

criminal liability for his violation and is consensual in character,
hence, may not be imposed on the taxpayer without his consent.
(RR 12-99)

The cases which may be compromised are:

1. Delinquent accounts
2. Pending admin cases under admin protest after issuance of
final assessment notice to the taxpayer
3. Civil tax cases being disputed before the courts
4. Collection cases filed in courts
5. Criminal violations
EXCEPT if: 1) already filed in court or 2) involving criminal tax fraud
REMEDIES OF THE GOVERNMENT
The following cases can NOT be compromised:

1. Withholding tax cases, unless the applicant-

taxpayer invokes provisions of law that cast doubt on
the taxpayer’s obligation to withhold;
2. Criminal tax fraud cases confirmed as such by the
Commissioner of Internal Revenue or his duly
authorized representative;
3. Criminal violations already filed in court; and
4. Delinquent accounts with duly approved schedule of
installment payments.
REMEDIES OF THE GOVERNMENT
The following cases can NOT be compromised:

5. Cases where final reports of reinvestigation or

reconsideration have been issued resulting to
reduction in the original assessment and the
taxpayer is agreeable to such decision by signing
the required agreement form for the purpose.

6. Cases which become final and executory after

final judgment of a court, where compromise is
requested on the ground of doubtful validity of the
assessment

7. Estate tax cases where compromise is

requested on the ground of financial incapacity of
the taxpayer
REMEDIES OF THE GOVERNMENT

Compromise Compromise Penalty

Amount of money paid by Amount of money paid by a
the taxpayer to settle his taxpayer to compromise a
civil liability for tax assessed tax violation that he has
by the Government committed, which may be
the subject of criminal
prosecution
Basic tax assessed Gross sales or receipts
during the year or the tax
due
Law sets a limit as to the The amount set depends on
amount that may be the nature of the tax
accepted by the violation and the minimum
government, depending on amount is generally not less
the legal grounds used by than P1,000
the taxpayer
REMEDIES OF THE GOVERNMENT
What are the examples for doubtful validity?

1. Delinquent account/disputed assessment resulted from a jeopardy assessment

a. Jeopardy assessment is an assessment without the benefit of complete or partial

audit by an authorized revenue officer
b. These assessments are usually done just before the end of the prescription
period.
c. Thus, they are called “jeopardy” because the tax is in jeopardy of not being
collected at all and the officer is in jeopardy of losing his job.

2. The assessment seems to be:

a. Arbitrary
b. Based on presumptions and
c. There is reason to believe that is lacking in legal/factual basis

3. There is reason to believe that the assessment is lacking in legal and factual
basis and taxpayer failed:
a. to file an admin protest because of alleged failure to receive notice of
assessment, or
b. to file a request for reinvestigation/reconsideration within 30 days from receipt of
final assessment notice, or
c. to elevate to the Court of Tax Appeals (CTA) an adverse decision of the
Commissioner, or his authorized representative, in some cases, within 30 days from
receipt thereof.
REMEDIES OF THE GOVERNMENT
What are examples of financial incapacity?

1. Corporation ceased or dissolved (but the tax liabilities for the assets
distributed to the stockholders as return of capital can not be compromised);

2. Taxpayer has a surplus deficit resulting to capital impairment by at least

50%:
a. Provided taxpayer has no sufficient liquid asset to satisfy liability
b. Provided that amounts payable or due to stockholders other than
business related transactions which are properly includible in the regular
“accounts payable” are by fiction of law considered as part of capital and not
liability

3. Net Worth deficit (for corps), and for an individual, if he has no other
leviable properties except his family home

4. Taxpayer is a compensation earner and he has no more leviable

assets except his family home

5. Taxpayer declared to be bankrupt by any

court/tribunal/authority/body/government agency
REMEDIES OF THE GOVERNMENT
Abatement and Cancellation of Tax Liability

 Abatement of the penalties and/or interest is allowed when:

1. The taxes or any portion thereof appears to be unjustly or excessively assessed, or
2. The administration and collection costs do not justify the collection of the amount
due.

 What are the instances where there appears to be unjust or excessive assessment?
1. Filing of the return/payment was made at the wrong venue
2. Taxpayer’s mistake in payment of tax was due to erroneous written advice of a
revenue officer
3. Taxpayer’s non-compliance is due to a difficult interpretation of said law
4. Failure to pay on time because of substantial losses from prolonged labor
disputes, force majeure, legitimate business reverses
5. Failure to pay because of circumstances beyond his control
• In 4 & 5, the abatement will only cover the surcharge and the compromise
penalty, not the interest.
6. Late payment of tax under meritorious circumstances like:
• One-day late filing in the bank
• Use of wrong tax form but correct amount of tax was remitted
• Filing an amended return under meritorious circumstances (here, only penalties are
abated, not interest)
• Surcharge erroneously imposed
REMEDIES OF THE GOVERNMENT
TAX LIEN

 When a taxpayer neglects or refuses to pay his

internal revenue tax liability after demand, the amount
demanded shall be a lien in favor of the government from
the time the assessment was made by the CIR until
paid with interest, penalties, and costs that may accrue in
addition thereto upon all property and rights to property
belonging to the taxpayer.

 However, the lien shall not be valid against any

mortgagee, purchaser or judgment creditor until notice of
such lien is registered in the office of the RD.
REMEDIES OF THE GOVERNMENT
DISTRAINT AND LEVY

 There are two kinds of distraint:

ACTUAL distraint, wherein actual delinquency in tax payment

is necessary; and

CONSTRUCTIVE distraint, wherein no actual delinquency is

necessary.
Some instances when constructive distraint may be availed of:
the CIR believes the taxpayer:
 Is retiring from any business subject to tax,
 Intends to leave the Philippines
 Intends to remove his property from the Philippines
 Intends to hide or conceal his property
 Performs any act tending to obstruct the proceedings for collecting the tax due.
REMEDIES OF THE GOVERNMENT
DISTRAINT AND LEVY

The procedure for levy of real property is:

1. Commencement of levy proceedings

2. Service of warrant of levy
3. Advertisement for sale
4. Public sale of the property under levy
5. Redemption of property sold
6. Forfeiture to the Government for want of bidder
7. Resale of real estate taken for taxes
8. Further distraint and levy
ADDITIONS TO TAX

By: dqesguerra
ADDITIONS TO TAX

 Penalties and interests apply to ALL taxes, fees and

charges imposed by the NIRC.

 Tax laws imposing penalties for delinquencies

are intended to hasten tax payments by
punishing evasions or neglect of duty in respect
thereof.

 It is mandatory to collect penalty and interest at the

stated rate in case of delinquency.
ADDITIONS TO TAX
Civil penalties can be divided into two categories – those with a 25%
surcharge, and those with a 50% surcharge.

• A penalty of 25% on the amount due will be imposed in the following cases:
1. Failure to file any return AND pay the tax due;
2. Filing a return with an internal revenue officer other than those with
whom the return is required to be filed;
3. Failure to pay the deficiency tax within the time prescribed in the
notice of assessment;
4. Failure to pay the full or part of the amount of tax stated in the
return (or full amount when no return is required) on or before the date
prescribed for its payment.

Note: There is NO 25% surcharge when you file on time, pay the full
amount stated in the return, but subsequently find out that the return
filed and the amount paid was erroneous.
ADDITIONS TO TAX
A penalty of 50% of the deficiency tax will be imposed in the following cases:

1. Willful neglect to file a return within the period prescribed by law;

2. False or fraudulent return is willfully made
a. Prima facie evidence of a false and fraudulent return when substantial
under declaration of taxable income or substantial overstatement of
deductions (failure to declare an amount exceeding 30% for taxable
income or actual deductions)

Note on willful neglect: if the taxpayer voluntarily files the return, without
notice from the BIR, only 25% surcharge shall be imposed for late filing and
late payment of the tax. But if the taxpayer files the return only after prior notice
in writing from the BIR, then the 50% surcharge will be imposed.

In other words, no demand on the BIR and the taxpayer pays, albeit late,
25%.
With demand by the BIR, 50%.
ADDITIONS TO TAX
INTEREST
There are four kinds of interest in ARTICLE 249 of the Tax Code:

 General interest
- the interest on unpaid taxes is 20% per annum on any unpaid amount
of tax from the date prescribed for payment until the amount is fully paid.

 Deficiency
- the rate is 20% per annum on any deficiency in the tax due from the date
prescribed for its payment until full payment.

 Delinquency
- 20% per annum on the unpaid amount in case of failure to pay:
a. Amount of tax due on any return required to be filed, or
b. Amount of tax due for which no return is required, or
c. Deficiency tax, or any surcharge or interest thereon on the due date
appearing in the notice and demand of the CIR.

 Extended Payment interest

ADDITIONS TO TAX
INTEREST

 For interest on extended payment, the rate is 20% per annum.

- This is imposed when a taxpayer is qualified and elects to pay the tax
on installment, but fails to pay the tax or any installment thereof, or pays it
beyond the period of payment; or CIR has authorized an extension of time
within which pay a tax or a deficiency tax or any part
thereof.

Situations based on RR 12-99

1. Late filing and late payment of the tax; no BIR intervention/demand Rocky
forgot to file on April 15. He filed on June 30 after he woke up and
realized his error.

Penalties: 25% surcharge for late filing and late payment;

20% general interest from date due up to time paid

Result: Pay the tax due + penalties

ADDITIONS TO TAX
INTEREST

2. Tax return filed on time, but filed through an internal revenue officer
other than with whom the return is required to be filed. (Paid in the wrong
venue)

Rocky paid on April 15, but he paid to the wrong agent bank.

- Penalties: 25% surcharge only

- No interest charge because he paid on time, just at the wrong place

Result: Pay the surcharge

ADDITIONS TO TAX
INTEREST

3. Late filing and late payment due to taxpayer’s willful neglect; i.e. did not file,
then BIR notified him to pay by a certain time, and only then did he file and pay
his tax.

Rocky didn’t file on April 15. He didn’t care until a demand letter was sent to
him by the BIR to pay by June 30. He paid on June 30.

- Penalties: 50% surcharge

- 20% general interest from date due (not from demand) up to time paid

Result: Pay tax, plus penalties

ADDITIONS TO TAX
INTEREST
4. Penalty or penalties for deficiency tax

As a rule, no surcharge is imposed on deficiency tax and on the basic

tax. However, if the amount due inclusive of penalties is not paid on or before
the due date stated on the demand letter, the corresponding surcharge will be
imposed.

4.1 Paid on time, error in computation resulting to deficiency tax.

Rocky filed his income tax return on time (April 15) and paid P100,000. Upon
pre-audit, it was discovered that there was an error in computation. The
correct amount due was P120,000. He was assessed for deficiency
income tax in a letter of demand and assessment noticed, telling him to
pay by June 30. He did.

- Penalties: 20% deficiency interest imposed on the deficiency tax from

date due up to time paid
- No surcharge (Note here that the there are no grounds for the
imposition of the 25% surcharge)
ADDITIONS TO TAX
INTEREST
5. Paid on time, but return found to be false and fraudulent resulting to
deficiency tax.

McJonald’s, Inc filed its return on time in April 15 and paid P175,000 for its
income tax (it declared a P500,000 net taxable income). However, the BIR
discovered that it did not report a taxable income of another P500,000 – a
clear case of false and fraudulent return. This amounted to a deficiency
income tax of another P175,000. They were informed by a PAN, but they
failed to protest. A formal letter of demand and assessment notice was issued
to them on May 31 demanding them to pay by June 30. They paid.

-Penalties: 50% surcharge (deficiency tax is the base)

-20% deficiency interest imposed on deficiency tax from date due up to
time paid
ADDITIONS TO TAX
INTEREST
6. Late payment of deficiency tax assessed
In general, the deficiency tax assessed shall be paid by the taxpayer
within the time prescribed in the notice and demand, otherwise, such
payer shall be liable for the civil penalties incident to the late payment.

Based on No. 5, the amount due (the deficiency assessed plus the
penalties) imposed on
McJonald’s was P304,771.67. The corporation did not pay on June 30,
the deadline for the payment of the assessment. As such, the
corporation shall be considered late in payment of the said assessment.
They pay on July 31.

-Penalties: 25% surcharge on the P304,771.67 (i.e unpaid amount

supposed to be paid on June 30)
-20% delinquency interest imposed on the P304, 771.67 (i.e. total unpaid
amount due on June 30), from the day after the payment was due until
time of actual payment

Note: The deficiency interest imposition, computed from April 15 to June 30, is computed based on the deficiency tax. The
delinquency interest imposition, computed from July 1 to July 31, is computed based on the total unpaid amount assessed in
the May 31 demand, i.e. the deficiency tax plus the penalties)
ADDITIONS TO TAX
INTEREST
7. Computation of 20% interest per annum in case of partial or installment
payment of a tax liability. (Based on Sec 249)

If a taxpayer requests to pay his income tax liability in installment and

the request is approved, no 25% surcharge shall be imposed for the late
payment of the tax since its deadline for payment has been duly extended.

However, 20% interest per annum for the extended payment shall be
imposed, computed based on the diminishing balance of the “unpaid amount”,
pursuant to Section 249 (D).

If the taxpayer’s request for extension of the period within which to pay
is made on or before the deadline prescribed for payment of the tax due, no
25% surcharge. But if the request is made after the deadline prescribed for
payment, the taxpayer is already late in payment, in which case, the 25%
surcharge shall be imposed, even if payment of the delinquency be allowed in
partial amortization.
ADDITIONS TO TAX
INTEREST
7. Computation of 20% interest per annum in case of partial or installment
payment of a tax liability. (Based on Sec 249)

If a taxpayer requests to pay his income tax liability in installment and

the request is approved, no 25% surcharge shall be imposed for the late
payment of the tax since its deadline for payment has been duly extended.

However, 20% interest per annum for the extended payment shall be
imposed, computed based on the diminishing balance of the “unpaid amount”,
pursuant to Section 249 (D).

If the taxpayer’s request for extension of the period within which to pay
is made on or before the deadline prescribed for payment of the tax due, no
25% surcharge. But if the request is made after the deadline prescribed for
payment, the taxpayer is already late in payment, in which case, the 25%
surcharge shall be imposed, even if payment of the delinquency be allowed in
partial amortization.
ADDITIONS TO TAX
CIVIL ACTION
Basic principle: No civil (or criminal action) for the recovery of taxes
shall be filed without the approval of the CIR.

The government can collect when the assessment has become final and
unappealable.

This occurs when:

 The taxpayer fails to file an administrative protest with the BIR

within 30 days from receipt of assessment

 The administrative protest is denied (or not acted upon within 180 days),
and he fails to file an appeal with the CTA within 30 days from the
receipt of the decision, or from the lapse of the 180 day period
ADDITIONS TO TAX
CRIMINAL ACTION
Again, no criminal action for the recovery of taxes shall be filed without the
approval of the CIR.

• The judgment in the criminal case shall not only impose the penalty, but shall
also order payment of the taxes subject of the criminal case as finally
decided by the Commissioner.

• Acquittal of taxpayer in a criminal case does not exonerate him from

tax liability. His legal duty to pay taxes cannot be affected by his
attempt to evade payment. Said obligation is not a consequence of the
felonious acts charged in the criminal proceeding, nor is it a mere civil liability
arising from a crime that could be wiped out by the judicial declaration of non-
existence of the criminal acts charged. (Republic v Patanao)
ASSESSMENT AND COLLECTION
SEC. 203. Period of Limitation Upon Assessment and
Collection. - Except as provided in Section 222, internal revenue
taxes shall be assessed within three (3) years after the last day
prescribed by law for the filing of the return, and no proceeding
in court without assessment for the collection of such taxes shall be
begun after the expiration of such period: Provided, That in a case
where a return is filed beyond the period prescribed by law, the
three (3)-year period shall be counted from the day the return
was filed. For purposes of this Section, a return filed before the last
day prescribed by law for the filing thereof shall be considered as
filed on such last day.
ASSESSMENT AND COLLECTION
Assessment

An assessment contains not only a computation of tax liabilities, but

also a demand for payment within a prescribed period. The ultimate
purpose of assessment is to ascertain the amount that each
taxpayer is to pay. It is a notice to the effect that the amount
stated is due as tax and a demand for payment thereof.

Assessments made beyond the prescriptive period would not be

binding on the taxpayer. (Tupaz v Ulep)

General Rule: The right to assess must be done 3 years from:

 The day the return was actually filed, or
 From the last day for filing the return (if the return was filed
before the last day prescribed by law), whichever is later.
ASSESSMENT AND COLLECTION
• Exceptions:

1. False or fraudulent return with intent to evade taxes – within

10 years from discovery of the falsity or fraud;

2. Failure or omission to file a return – within 10 years after

discovery of failure or omission to file the return; and

3. Waiver of statute of limitations in writing, which must be made

before the expiration of the 3 year period of assessment of taxes –
period agreed upon.
ASSESSMENT AND COLLECTION
Collection

General rule: The prescriptive period to collect the taxes due is 5

years from the date of Assessment.

• Exceptions:

1. False or fraudulent return with intent to evade taxes – within

10 years from discovery without need for prior assessment. The
government may file a proceeding in court.

2. Failure or omission to file a return – within 10 years from discovery

without need for assessment.

3. Waiver in writing executed before the 5-year period expires –

period agreed upon.
ASSESSMENT AND COLLECTION
Waiver of Statute of Limitations

The taxpayer and the government may extend by

mutual agreement in writing the prescriptive period
for the assessment and collection of taxes.

• A waiver of the statute of limitations under the NIRC,

to a certain extent, is a derogation of the taxpayer’s
right to security against prolonged and unscrupulous
investigations and must therefore be carefully and
strictly construed. (Philippine Journalists v CIR)
REMEDIES OF TAXPAYERS

In General
• The taxpayer is given two remedies:
1. Protest or dispute the assessment, or
2. Refund or recovery of erroneously or illegally collected taxes

The remedies are mutually exclusive.

To distinguish,
 In protest, the tax has not yet been paid, and what is
being contested is the government’s claim that the tax is
underpaid.
 Protesting is the proper remedy when a FAN has been issued.
You protest the assessment and appeal it to the CTA, when
proper.
 In refund, the tax has already been paid by the taxpayer
and the claim of the taxpayer is that the tax is overpaid.
 Refund is proper when the taxpayer has paid the tax
pursuant to a self-assessment.
REMEDIES OF TAXPAYERS
Letter of Authority

- Is an official document that empowers a revenue officer to

examine and scrutinize a taxpayer’s books of accounts and other
accounting records in order to determine the taxpayer’s correct
internal revenue taxes.

- It must be served to the concerned taxpayer within thirty (30)

days from its date of issuance, otherwise, it shall be null and void

- A Revenue Officer is allowed only one hundred twenty (120)

days from the date of receipt of a Letter of Authority y the
taxpayer to conduct the audit and submit the required report of
investigation.
- If the Revenue Officer is unable to submit his final report of
investigation within the 120-day period, he must then submit a
Progress Report to his Head of Office, and surrender the Letter
of Authority for revalidation.
DUE PROCESS REQUIREMENT IN THE
ISSUANCE OF A DEFICIENCY TAX
ASSESSMENT
Mode of procedure in the assessment of tax (Purpose: To give due
process to the taxpayer.

A. Preliminary Assessment Notice (PAN). – If after review and

evaluation by the Commissioner or his duly authorized
representative, as the case may be, it is determined that there exists
sufficient basis to assess the taxpayer for any deficiency tax or
taxes, the said Office shall issue to the taxpayer a Preliminary
Assessment Notice (PAN) for the proposed assessment. It shall
show in detail the facts and the law, rules and regulations, or
jurisprudence on which the proposed assessment is based.

Issuance of assessment. – If the taxpayer fails to respond within the

fifteen (15) days from date of receipt of the PAN, he shall be
considered in default, in which case, a Formal Letter of Demand and
Final Assessment Notice (FLD)/FAN shall be issued calling for
payment of the taxpayer’s deficiency tax liability, inclusive of the
applicable penalties.
DUE PROCESS REQUIREMENT IN THE
ISSUANCE OF A DEFICIENCY TAX
ASSESSMENT
- If the tax payer, within fifteen (15) days from receipt of the PAN,
responds that he/it disagrees with the findings of deficiency tax
or taxes, a FLD/FAN shall be issued within fifteen (15) days from
filing/submission for the taxpayer’s response, calling for payment
of taxpayer’s deficiency tax liability, inclusive of the applicable
penalties.

A PAN Shall not be required in any of the following cases, thus a

FLD/FAN shall be issued outright:

1. When the finding for any deficiency tax is the result of

mathematical error in the computation of the tax appearing on
the face of the tax return filed by the taxpayer; or

2. When a discrepancy has been determined between the tax

withheld and the amount actually remitted by the withholding
agent; or
DUE PROCESS REQUIREMENT IN THE
ISSUANCE OF A DEFICIENCY TAX
ASSESSMENT
A PAN Shall not be required in any of the following cases, thus a
FLD/FAN shall be issued outright:

3. 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

4. When the excise tax due on excisable articles has not yet been
paid; or

5. When an 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.
 DUE PROCESS REQUIREMENT IN THE
ISSUANCE OF A DEFICIENCY TAX
ASSESSMENT
A. Formal Letter of Demand and Final Assessment Notice
(FLD/FAN). – The FLD and FAN shall be issued by the
Commissioner of his duly authorized representative (Revenue
Regional Directors, Assistant Commissioner-Large Taxpayers
Service, Assistant Commissioner-Enforcement and Advocacy
Service). The FLD/FAN calling for payment of the taxpayer’s
deficiency tax or taxes shall state the facts, the law, rules and
regulations, or jurisprudence on which the assessment is based;
otherwise, the assessment shall be void.

The taxpayer or its authorized representative or tax agent may

protest administratively against the aforesaid FLD/FAN within 30
days from the date of receipt thereof. The taxpayer protesting an
assessment may file a written request for reconsideration or
reinvestigation defined as follows:

1. Request for reconsideration – refers to a plea of re-evaluation of

an assessment on the basis of existing records without need of
additional evidence. It may involve both a question of fact or of
law or both.
 DUE PROCESS REQUIREMENT IN THE
ISSUANCE OF A DEFICIENCY TAX
ASSESSMENT
A.1 Notice of Informal Conference

Notice for informal Conference. - The Revenue Officer who audited

the taxpayer's records shall, among others, state in his report
whether or not the taxpayer agrees with his findings that the taxpayer
is liable for deficiency tax or taxes. If the taxpayer is not amenable,
based on the said Officer's submitted report of investigation, the
taxpayer shall be informed, in writing, by the Revenue District Office
or by the Special investigation Division, as the case may be (in the
case of Revenue Regional Offices) or by the Chief of Division
concerned (in the case of the BIR National Office) of the discrepancy
or discrepancies in the taxpayer's payment of his internal revenue
taxes.
 DUE PROCESS REQUIREMENT IN THE
ISSUANCE OF A DEFICIENCY TAX
ASSESSMENT

2. Request for reinvestigation – refers to a plea of re-evaluation of

an assessment on the basis of newly discovered or additional
evidence that a taxpayer intends to present in the reinvestigation.
It may also involve a question of fact or of law or both.

The taxpayer shall state in his protest the following:

a) The nature of protest whether reconsideration or

reinvestigation, specifying newly discovered or additional
evidence he intends to present if it is a request for
investigation;
b) Date of the assessment notice, and
c) The applicable law, rules and regulations, or jurisprudence
on which his protest is based, otherwise, his protest shall be
considered void and without force and effect.
 DUE PROCESS REQUIREMENT IN THE
ISSUANCE OF A DEFICIENCY TAX
ASSESSMENT

E. Taxpayer fails to file a valid protest against the FLD/FAN. – If the

taxpayer fails to file a valid protest against the FLD/FAN within 30
days from the date of receipt thereof, the assessment shall become
final, executory and demandable. Thus, no request for
reconsideration or reinvestigation shall be granted.

F. Protest is denied. – If the protest is denied in whole or in part, by

the Commissioner’s duly authorized representative, the taxpayer
may, within thirty (30) days from receipt of said decision, either:

a. Appeal to the Court of Tax Appeals, or

b. File a request for reconsideration of the Commissioner

G. Prtotest is not acted upon. – If the protest is not acted upon by the
Commissioner’s duly authorized representative within 180 days
counted from the date of
 DUE PROCESS REQUIREMENT IN THE
ISSUANCE OF A DEFICIENCY TAX
ASSESSMENT
G. Protest is not acted upon. – If the protest is not acted upon by the
Commissioner’s duly authorized representative within 180 days
counted from the date of
 filing of the protest in case of a request for reconsideration, or
 submission by the taxpayer of the required documents within
60 days from the filing of the protest in case of a request of
reinvestigation
the taxpayer may either-
1. Appeal to the CTA within 30 days after expiration of the 180-
day period; or
2. Await the final decision of the Commissioner’s duly authorized
representative on the disputed assessment.

If the protest or administrative appeal, as the case may be, is

denied in whole or in part by the Commissioner, the taxpayer
may appeal to the CTA within 30 days from date of receipt of
the said decision. Otherwise, the assessment shall become
final, executory and demandable.
DUE PROCESS REQUIREMENT IN THE
ISSUANCE OF A DEFICIENCY TAX
ASSESSMENT

If the protest or administrative appeal, as the case may be, is denied

in whole or in part by the Commissioner, the taxpayer may appeal to
the CTA within 30 days from date of receipt of the said decision.
Otherwise, the assessment shall become final, executory and
demandable.

A motion for reconsideration of the Commissioner’s denial of the

protest or administrative appeal, as the case may be, shall not toll the
30-day period to appeal to the CTA.

H. Final Decision on a Disputed Assessment (FDDA) – The decision

of the Commissioner or his duly authorized representative shall state
the following:
1. The facts, the applicable law, rules and regulations, or
jurisprudence on which such decision is based, otherwise the
decision is based, otherwise the decision shall be void, and
2. That the same is his final decision.
DUE PROCESS REQUIREMENT IN THE
ISSUANCE OF A DEFICIENCY TAX
ASSESSMENT

LOA ---- NIC – 15 - PAN – 15 - FAN – 30 -

PROTEST – 60 - SUBMIT Documents – 180 -
Inaction after 180 days – 30 – CTA Decision –
30 – CTA
TAX REFUND
The requirements for a tax credit or refund are:

1. Written claim for credit or refund filed with the CIR (a return
filed showing overpayment shall be considered as a written
claim), whether or not the tax has been paid under protest, and

2. Filed within 2 years after the actual payment of the tax or penalty,
regardless of the existence of any supervening cause after payment.

The following are the instances when a claim for refund may be
done:

1. Erroneously or illegally assessed or collected internal revenue

taxes;
2. Penalties imposed without authority, or
3. Any sum alleged to have been excessive or in any manner
wrongfully collected