DEFINITIONS

Question 1

Process of determining the tax liability of a taxpayer

Answer 1

Assessment

Question 2

Procedures of the government to enforce payment of unpaid taxes

Answer 2

Collection

Question 3

Prescriptive period of assessment

Answer 3

Gen rule: 3 years from the date of actual filing of the return/deadline required by law whichever is later.

Question 4

Exception to the 3 year prescription rule?

Answer 4

Fraudulent returns, willful neglect to file, waiver of the statutes of limitation by the taxpayer.

Question 5

Temporary suspension of the prescriptive period for not less than 6 months (180 days) to give way to the reinvestigation

Answer 5

Waiver of the statutes of limitation

Question 6

Who issues and approves LAs in Revenue District Office?

Answer 6

Regional Director

Question 7

Who issues and approves LAs in Large Taxpayer Service Audit Divisions

Answer 7

Assistant Commissioner - LTS

Question 8

Who issues and approved LAs in National Investigation Divisions and Special Investigation Divisions?

Answer 8

Commissioner of Internal Revenue

Question 9

If taxpayer declined to give certain documents/information, the CIR will

Answer 9

Issue a subpoena

Question 10

2 types of subpoena?

Answer 10

Subpoena duces tecum & Subpoena ad testificandum

Question 11

Written communication issued by Regional Assessment Division informing the taxpayer of his obligation for deficiency tax based on audit findings of a revenue officer.

Answer 11

Preliminary Assessment Notice

Question 12

Final declaration of deficiency tax issued to a taxpayer.

Answer 12

Formal Letter of Demand (FLD)/Final Assessment Notice (FAN)

Question 13

Powers of the CIR relative to the correct determination of tax?

Answer 13

• prescribe presumptive gross sales and receipts
• examine and inspect the books of taxpayer
• conduct inventory surveillance
• obtain data and information from third parties

Question 14

Primary remedies of the Govt?

Answer 14

Assessment & Collection

Question 15

How many times a taxpayer shall be subject to examination?

Answer 15

Only once in every taxable year

Question 16

Summon upon the taxpayer compelling them to produce, under penalty of neglect certain documents sought therein after his failure to comply with 2 consecutive requests to produce his books for examination

Answer 16

Subpoena duces tecum

Question 17

Summon upon a person to appear and give oral testimony

Answer 17

Subpoena ad testificandum

Question 18

Aside from demanding tax deficiency, the BIR will also impose increments as required by law:

Answer 18

• surcharge, interest, compromise penalty

Question 19

Rate for surcharge?

Answer 19

Simple neglect to file: 25%
Willful neglect to file: 50%

Question 20

Rate for interest?

Answer 20

12% per annum

Question 21

A settlement for the government not to enforce criminal prosecution

Answer 21

Compromise penalty

Question 22

The BIR may also identify taxpayers to be subjected to regular audit from the following

Answer 22

• tax compliance verification drive
• tax information
• pre audit of tax returns
• direct field observation by revenue officers

Question 23

intended to locate and identify taxpayers who do not comply with basic requirements such as registration, bookkeeping, or invoicing

Answer 23

Tax Mapping

Question 24

If taxpayer agrees with his deficiency tax, he will use BIR form

Answer 24

BIR form 0605

Question 25

The Letter of Authority must be served to the taxpayer

Answer 25

30 days from issuance