BIR and Tax Remedies Flashcards
National Office of the BIR
1 Commissioner
4 deputy commissioners (Operations, Legal and Inspection, Information Systems, and Resource Management
13 Assistant Commissioners
Field Offices
19 regional directors
124 Revenue District Offices
Powers and Duties of the BIR
- To assess and collect all national internal revenue taxes, fees, and charges;
- to enforce all forfeitures, penalties and fines connected
- to execute all judgments decided in its favor by the courts
- recommend to the Secretary of Finance all needed rules and regulations for the effective enforcement of tax laws
Exceptions to the DELEGATION of Powers and Duties of the CIR
- power to recommend rules and regulations (to the secretary of finance)
- power to issue rulings or to reverse, revoke, or modify existing rulings of the BIR
- power to compromise or abate
Exceptions to the exceptions of the delegation of powers of the CIR
- Abate or compromise assessments issued by the regional offices involving basic deficiency taxes of P500,000 or less
- Prosecution of minor criminal violations of the tax code
- power to assign or reassign internal revenue officers
First step to the assessment process
Self-Assessment
an official document that empowers a Revenue Officer (RO) to examine and scrutinize a taxpayer’s books of accounts and other accounting records in order to determine the correct tax liabilities of the taxpayer
Letter of Authority
Requirements of a Letter of Authority
- should cover on taxable year
- must be served to the taxpayer within 30 days from its date of issuance
- RO is given 120 days to conduct an audit; revalidation
After audit proper, there will be a
Presentation of findings; Notice of informal conference (15 days)
If no resolution was found in the Presentation of findings; Notice of informal conference
there is the Issuance of a Preliminary Assessment Notice (PAN)
the tax payer has _________ to submit a reply to the PAN
15 days
If no resolution was found in the Preliminary Assessment Notice (PAN)
Issuance of a Final Assessment Notice (FAN) / Formal letter of Demand (FLD)
the tax payer has _________ to submit an administrative protest to the FAN/FLD
30 days
the tax payer has _________ to submit documents to support administrative protest for the FAN/FLD
60 days
Failure to file a valid protest against FAN/FLD within _________
within 30-day period shall render the assessment final and executory
If protest against the FAN/FLD is denied, the BIR will
BIR will issue a Final Decision on Disputed Assessment`
If protest against the FAN/FLD is denied, the taxpayer can
- file an appeal to the CTA within 30 days
or - elevate the request for reconsideration to the CIR within 30 days
The taxpayer can elevate from CTA to the SC or CIR to the CTA IF _____
If the decision of CTA or CIT is adverse to taxpayer or no decision is made within 180 days, the taxpayer can
Claim for refund
when an internal revenue tax has been erroneously or illegally collected or a penalty has been imposed without authority, the taxpayer may file a claim for refund or credit within two (2) years after payment with the CIR before any case is filed in the CTA
(tax refund) The two-year or 24-month period should be computed from the time of
actual filing of the adjustment return or annual income tax return
If paid in installment, the date of final payment
because at that point, it can already be determined whether or not there has been overpayment
a legal claim or change on property established by law as a sort of security for the payment of tax obligations
Tax Lien
a summary remedy whereby collection of tax is enforced upon personal property of the taxpayer
Distraint
is the seizure of real property for the satisfaction of taxes due from a delinquent taxpayer
Levy
the process of seizing personal property of a delinquent taxpayer that is in the possession of a third person (like a bank deposit) in order to satisfy the tax obligations of the said taxpayer
Garnishment
Suspension of business operation
In case of VAT-registered persons:
- Failure to issue receipts or invoices
- Failure to file a VAT return as required under Sec. 114
- Understatement of taxable sales or receipts by 30% or more of his correct taxable sales or receipts of the taxable quarter
Suspension of business operation
Failure of any person to register as required under Section 236
the temporary closure of the establishment shall be for the duration of not less than 5 days and shall be listed only upon compliance with whatever requirements prescribed by the CIR in the closure order
these are actions instituted by the government to collect internal revenue taxes in the regular courts after assessment by the CIR has become final and executory
Ordinary Civil Action
Ordinary Civil Action, Jurisdictions
- CTA - P1 Million and above
- RTC, MTC, MeTC - Less than P1 Million
resorted to not only for the collection of taxes but also to impose statutory penalties
Criminal Action
Criminal Action example
- willful attempt to evade or defeat tax (Tax evasion)
- Failure to file return, supply correct and accurate information, pay tax, withhold and remit tax and refund excess taxes withheld on compensation
- Filed in the prosecutor’s office
