Carbonara

Question 1

_________________ 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 liabilities
a. Letter of Authority
b. Letter of Notice
c. Preliminary Assessment Notice
d. Final Assessment Notice

Answer 1

LETTER OF AUTHORITY

Question 2

The Bureau of Internal Revenue must issue an LOA prior to issuing a PAN, FAN or FDDA

Answer 2

FALSE

Question 3

Absence of a Letter of Authority makes the assessment unauthorized and thus void

Answer 3

FALSE

Question 4

_______________ is issued, 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
a. Preliminary Assessment Notice
b. Final Assessment Notice
c. Final Letter of Demand
d. Final Decision on a Disputed Assessment

Answer 4

FINAL DECISION ON A DISPUTED ASSESSMENT

Question 5

As a rule, PAN is isued to the taxpayer as the first step in assessment. It serves as notice that the taxpayer still has some taxes due. PAN is issued when:
a. The taxpayer fails to file a return
b. The taxpayer files a return but fails to pay the tax
c. Taxpayer pays the tax but the same is insufficient
d. All of the above

Answer 5

TAXPAYER PAYS THE TAX BUT THE SAME IS INSUFFICIENT

Question 6

Preliminary asssessment notic is not required in the following cases, except:
a. Tax deficiency is due to mathematical error
b. Tax deficiency is due to unpaid VAT
c. Tax deficiency is due to unpaid excise taxes
d. Tax deficiency is due to withholding tax

Answer 6

TAX DEFICIENCY IS DUE TO WITHHOLDING TAX

Question 7

A written notice and demand by the BIR on the taxpayer for the settlement of a due tax liability that is there definitely set and fixed:
a. Assessment
b. Forfeiture
c. Audit engagement letter
d. Institution of criminal action

Answer 7

INSTITUTION OF CRIMINAL ACTION

Question 8

A pre-assessment notice is required:
a. When a discrepancy has been determined between the amount of sales declared and the purchases recorded by the seller’s customers
b. When a discrepancy has been determined between the tax withheld and the amount actually remitted by the withholding agent
c. When an article locally purchased or imported by an exempt person has been sold, traded, or transferred to non-exempt persons
d. When the deficiency tax is the result of mathematical errors in the computations appearing on the face of the return

Answer 8

WHEN THE DEFICIENCY TAX IS THE RESULT OF MATHEMATICAL ERRORS IN THE COMPUTATIONS APPPEARING ON THE FACE OF THE RETURN

Question 9

The formal letter of demand or final assessment notice shal be issued by the Commissioner or his duly authorized representative

Answer 9

FALSE

Question 10

The FLD/FLN 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.

Answer 10

FALSE

Question 11

If a taxpayer is acquitted in criminal violation of the Tax Code, this acquittal does not exonerate him from his civil liability to pay the taxes

Answer 11

TRUE

Question 12

A conviction for tax evasion is not a bar for collection of unpaid taxes

Answer 12

TRUE

Question 13

A tax assessment is necessary to a criminal prosecution for willful attempt to defeat and evade payment of taxes

Answer 13

TRUE

Question 14

Criminal proceedings under the Tax Code is now a mode of collection of internal revenue taxes, fees, or charges

Answer 14

FALSE

Question 15

Where a return was filed, as a general rule, the prescriptive period for assessment after the date the return was due or filed, whichever is later is within
a. 3 years
b. 10 years
c. 5 years
d. Answer not given

Answer 15

Answer not given

Question 16

Allan filed his ITR for 2018 on October 15, 2019. The last day for BIR to assess it on?
a. October 15, 2024
b. October 15, 2022
c. April 15, 2022
d. October 14, 2022

Answer 16

APRIL 15, 2022

Question 17

Donor’s tax return for a donation made on January 15, 2018 was filed on January 31, 2018. Last day for the BIR to assess it on?
a. February 28, 2021
b. January 31, 2021
c. February 14, 2021
d. January 15, 2021

Answer 17

JANUARY 31, 2021

Question 18

Donor’s tax return for a donation made on January 15, 2018 was filed on January 31, 2018. The return filed was fraudulent and was discovered on March 31, 2018. The last day for BIR to assess is on?
a. February 28, 2028
b. January 31, 2028
c. February 14, 2028
d. March 31, 2028

Answer 18

MARCH 31, 2028

Question 19

Mr. A seasonably filed a protest and submitted supporting documents with the BIR. Within how many days shall the former await the decision of latter before he assumes that the protest has been indirectly denied?
a. 180 days
b. 90 days
c. 60 days
d. 30 days

Answer 19

180 days

Question 20

If the taxpayer did not file a return, what is the prescriptive period for the issuance of Final Assessment Notice?
a. Three years counted from the time of filing or deadline, whichever is earlier
b. Three years counted from the time of filing or deadline, whichever is later
c. Ten years counted from the time of filing or deadline for fililng, whichever is later
d. Ten years counted from the date of discovery by the BIR that no return was filed

Answer 20

Ten years counted from the date of discovery by the BIR that no return was filed

Question 21

Rosalie, a compensation income earner, filed her income tax return for the taxable year 2015 on March 30, 2016. On March 20, 2019, Rosalie received an assessment notice and letter of demand covering the taxable year 2015 but the postmark on the envelope shows April 10, 2019. Her return is not a false and fraudulent return. Can Rosalie raise the defense of prescription?
a. No. The three year prescripteive period started to run on April 15, 2016, hence it has not yet expired on April 10, 2019
b. Yes. The 3 year prescriptive period started to run on April 15, 2016, hence, it had already expired on May 20, 2019
c. No. The prescriptive period started to run on March 30, 2016, hence the 3 year perid expired on April 10, 2019
d. Yes. Since the 3-year prescriptive period started to run on March 30, 2016, it has already expired by May 20, 2019

Answer 21

No. The three year prescripteive period started to run on April 15, 2016, hence it has not yet expired on April 10, 2019

Question 22

On April 15, 2016, the Commissioner of Internal Revenue mailed by registered mail the final assessment notice and the demand letter covering the calendar year 2012 with the QC Post Office. Which statement is correct?
a. The assessment notice is void because it was mailed beyond the prescriptive period
b. The assessment notice is void because it was not received by the taxpaye rwithin the 3-year period from the date of filing the tax return
c. The assessment notice is void if the taxpayer can show that the same was received only after one month from date of mailing
d. The assessment notice is valid even if the taxpayer received the same after the three-year period from the date of filing of the tax return

Answer 22

The assessment notice is valid even if the taxpayer received the same after the three-year period from the date of filing of the tax return

Question 23

On March 30, 2016, Emmett Foods, Inc. received a notice of assessment and a letter of demand on its April 15, 2012 final adjustment return from the BIR. Emmett Foods then filed a request for reinvestigation together with the requisite supporting documents on April 25, 2015. On June 2, 2015, the BIR issued a final assessment reducing the amount of the tax demanded. Emmett Foods was satisfied with the reduction, it did not do anything anymore. On April 15, 2020, the BIR garnished the corporation’s bank deposits to answer for the tax liability. Was the BIR action proper?
a. Yes. The BIR has 5 years from the filing of the protest within which to collect.
b. Yes. The BIR has 5 years from the issuance of the final assessment within which to collect
c. No. The taxpayer did not apply for a compromise
d. No. Without the taxpaer’s prior authority, the BIR action violated the Bank Deposit Secrecy Law

Answer 23

Yes. The BIR has 5 years from the issuance of the final assessment within which to collect

Question 24

On March 10, 2018, Continental, Inc. received a preliminary assessment notice (PAN) dated March 1, 2018 issued by the Commissioner of Internal Revenue (CIR) for deficiency income tax for its taxable year 2016. It failed to protest the PAN. The CIR thereupon issued a final assessment notice (FAN) with letter of demand on April 30, 2018. The FAN was received by the corporation on May 10, 2018, following which or on May 25, 2018, it filed its protest against it. The CIR denied the protest on the ground that the assessment had already become final and executory, the corporation having failed to protest the PAN. Is the CIR correct?
a. Yes. The FAN shall become final and executory upon failure of the taxpayer to protest the PAN within 15 days from the receipt thereof
b. No. The issuance of preliminary assessment notice (PAN) does not give rise to the right of the taxpayer to protest. What can be protested is the final assessment notice (FAN) or that assessment following the PAN. Since the FAN was timely protested, within 30 days from receipt thereof, the assessment did not become final and executory
c. Yes. The BIR has sole discretion to accept or deny any protest from the taxpayer
d. None of the above.

Answer 24

No. The issuance of preliminary assessment notice (PAN) does not give rise to the right of the taxpayer to protest. What can be protested is the final assessment notice (FAN) or that assessment following the PAN. Since the FAN was timely protested, within 30 days from receipt thereof, the assessment did not become final and executory

Question 25

Omega Corporation received a notice of assessment and a later from the BIR demanding the payment of 3M pesos in deficiency income taxes for the taxable year 2018. The financial statements of the company show that it has been suffering financial reverses. Its asset positon shows that it could only pay P500,000 which it offered as a compromise to the BIR. Which among the following may the BIR require to enable it to enter into a compromise with Omega?
a. Omega must show that it has faithfully paid taxes before
b. Omega must promise to pay its deficiency taxes when financially able
c. Omega must waive its right to the secrecy of its bank deposits
d. Omega must immediately deposit the P500,000 with the BIR

Answer 25

Omega must waive its right to the secrecy of its bank deposits

Question 26

____________ refers to a plea of re-evaluation of an assessment on the basis of existing records without need of additional evidence. It may involve a question of fact or of law or both.
a. Formal letter of demand
b. Preliminary assessment notice
c. Request for reconsideration
d. Request for re-investigation

Answer 26

REQUEST FOR RECONSIDERATION

Question 27

_____________ 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 involve a question of fact or of law or bot
a. Formal letter of demand
b. Preliminary assessment notice
c. Motion for reconsideration
d. Motion for re-investigation

Answer 27

MOTION FOR RE-INVESTIGATION

Question 28

The taxpayer shall state in his protest:
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 reinvestigation
b. Date of assessment notice
c. The applicable law, rules and regulations, or jurisprudence, on which his protest is based.
d. All of the above

Answer 28

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 reinvestigation
b. Date of assessment notice
c. The applicable law, rules and regulations, or jurisprudence, on which his protest is based.

Question 29

What is the effect on the tax liability of a taxpayer who does not protest an assessment for deficiency taxes?
a. The taxpayer may appeal his liability to the CTA since the assessment is a final decision of the Commissioner on the matter
b. The BIR could already enforce the collectin of the taxpayer’s liability if it could secure authority from the CTA
c. The taxpayer’s liabillity becomes fixed and subject to collection as the assessment becomes final and collectible
d. The taxpayer’s liability remains suspended for 180 days from the expiration of the period to protest

Answer 29

The taxpayer’s liabillity becomes fixed and subject to collection as the assessment becomes final and collectible

Question 30

As a rule, within what period must a taxpayer elevate to the Court of Tax Appeals a denial of his application for refund of income tax overpayments?
a. Within 30 days from receipt of the Commissioner’s denial of his application for refund
b. Within 30 days from receipt of the denial which must not exceed 2 years from payment of income tax
c. Within 2 years from payment of the income taxes sought to be refunded
d. Within 30 days from receipt of the denial or within 2 years from payment

Answer 30

Within 30 days from receipt of the denial which must not exceed 2 years from payment of income tax