Administration

Question 1

Tax administration

Answer 1

Manner or procedure of assessing and collecting or enforcing tax liabilities.

It also includes the execution of judgement and capacity to act in all tax cases decided by the court in favor of the BIR.

Question 2

Powers of the Commissioner

Answer 2

1. Interpret tax laws
2. Decide tax cases
3. Obtain information and to summon, examine and take testimony of persons (third party information rule)
4. Make assessment and prescribe additional requirements for tax administration and enforcement
5. Authority to delegate power
6. Make arrest and seizures
7. Assign internal revenue officers
8. Impose duties on certain officers; and
9. Suspend business operations of a taxpayer

Question 3

The CIR has power to decide: (DRePO)

Answer 3

1. Disputed assessments;
2. Refunds of internal revenue taxes, fees or other charges;
3. Penalties imposed in relation thereto
4. Other matters arising under the NIRC or other laws administered by the BIR.

Question 4

Confidentiality Rule (PC-FEET)

Answer 4

GR: although tax returns constitute public records, they are confidential in nature and may not be inquired into in unauthorized cases

Except:

1. When the inspection of the return is authorized upon the written order of the Pres of the phils
2. In aid of legislation by the Congressional oversight committee
3. When inspection is authorized under finance regulation no.33 of the SOF
4. When the production of the tax return is material evidence in a criminal case where the govt is interested in the result
5. When the request for exchange of information by foreign tax authority
6. Authorized by taxpayer

Question 5

Best evidence obtainable

Answer 5

Any data, records, papers, docs or any other evidence gathered by internal revenue officers from the govt offices or agencies, corps, employers, clients, patients etc and all other sources with whom the taxpayer had previous transaction or from whom he had received any income.

It applies when tax report required to filed has not been made or there was a reason to believe that such was false, incomplete or erroneous.

It may consist of hearsay evidence but not photo copies etc.

Question 6

Networth method

Answer 6

Inventory method if income tax verification.

Any increase or decrease in net worth, ater adding the non deductible items and subtracting therefrom the non taxable receipts, which are not accounted for in tax return is deemed to be unreported income.

Assets - liabilities = networth

Question 7

Authority to terminate taxable period (R-LPO)

Answer 7

1. The taxpayer is retiring from business subject to tax.
2. The taxpayer is intending to leave the country
3. The taxpayer is intending to remove his properties in the phils or hide or conceal his properties
4. The taxpayer is performing an act tending to obstruct the proceedings for the collection of tax for past or current qtr or year to render the same totally or partly ineffective.

Question 8

Authority to delegate power

Answer 8

GR: CIR may delegate the powers bested in him to any subordinate official with the rank equivalent to a division chief or higher.

Except: (RICA)

1. Power to recommend the promulgation of rules and regulations to the SOF;
2. Power to issue rulings of first impressions or to reverse, revoke and modify ang existing ruling of the bureau;
3. Power to compromise or abate any tax liability, except matters that may be compromised by the evaluation board.
4. Power to assign or reassign internal revenue officers to establishements where articles subject to excise tax are kept.

Question 9

Non retroactivity of Rulings (M-FaB^2)

Answer 9

GR: Any revocation, modification or reversal of any rule or regulations or any rulings or circulars shall not be given retroactive application if it will prejudicial to the taxpayer.

Except:

1. TP deliberately misstates or omits material facts from his return or any docs required of him by the BIR.
2. Facts subsequently gathered by BIR are materially different from the facts on which the ruling was based.
3. TP acted in bad faith
4. If retroactive application would benefit the TP.

Question 10

Doctrine of Willful Blindness

Answer 10

A taxpayer can no longer raise the defense that the errors on their tax returns are not their responsibility or that it is thr fault of their hired accountants.

Question 11

Informers Reward

Answer 11

Any qualified person who voluntarily provides definite and sworn information not yet in the possession of the BIR nor of public knowledge, leading to the discovery of frauds upon internal revenue laws or violations of any provisions of NIRC, resulting to the recovery of revenues and fees and/or conviction of guilty party and/or imposition of any fine or penalty