K. Tax Remedies

Question 1

K. Tax Remedies
1. Government
a. Assessment of Internal Revenue Taxes
i. Requisites of a Valid Assessment
ii. False Returns, Fraudulent Returns, Non-Filing of Returns

b. Collection of Delinquent Taxes
i. Requisites
ii. Civil action for Collection
iii. Criminal action for Collection
iv. Injunction – R.A. No. 8424, as amended, sec. 218; R.A.
No. 9282, as amended, sec. 11

c. Statute of Limitations

SUMMARIZE as Overview

Answer 1

Tax remedies by Government

1. Assessment
2. Collection
   a) Summary Proceedings
   b) Judicial Proceedings

Question 2

2. Taxpayer’s Remedies
   a. Administrative - P & C
   b. Judicial - Appeal to CTA & A to SC
   c. Compromise and Abatement of Taxes
   d. Refund of Tax Erroneously or Illegally Collected – R.A. No. 8424, sec. 229

Answer 2

Taxpayers remedies - legal actions where taxpayer seeks relief from possible excesses by revenue officers
A) Before Payment - a, b, & c
B) After Payment - d ( claim for Tax refund & claim for Tax Credit)

Question 3

3. Civil Penalties

a. Tax Delinquency, Tax Deficiency
b. Surcharge - 25/ 50

Answer 3

DELINQUENCY:
Self-assessed tax per return filed by the taxpayer on the prescribed date was NOT PAID at all or was ONLY PARTIALLY paid;

DEFICIENCY:
The amount by which the tax imposed by law AS DETERMINED by the CIR or His representative EXCEEDS the amount shown as the tax by the taxpayer in HIS RETURN ( Tax as determined by BIR > Tax in Return filed by TP)

SURCHARGE
A) 25%
General Rule: There shall be imposed, in addition to the tax required to be paid, a penalty equivalent to twenty-five percent (25%) of the
amount due, in the following cases:
1) Failure to file any return and pay
the tax due thereon
2) Failure to pay the deficiency tax within the time prescribed for its payment in the notice of assessment;

B) 50%
In the following cases, fifty percent (50%) surcharge on the amount due shall be imposed upon the taxpayer:
1) Wilful neglect to file the return within the period prescribed by
this Code or by rules and regulations
2) False or fraudulent return is wilfully made.

Question 4

4. Compromise Penalty

A compromise penalty is a REDUCED AMOUNT paid by a taxpayer to SETTLE a Tax Liability dispute

Answer 4

THE amount suggested in settlement of criminal liability.

This is a fixed amount based on a graduated table depending usually on the gross annual sales, earnings, or receipts of the taxpayer

Question 5

K. Tax Remedies
1. Government

c. Statute of Limitations

Answer 5

Tax Remedies by Government - Prescriptive Period

1st Determine the Ground

a) If a Return is FILED & its NOT FRAUDULENT :
— Government cause of action For ASESSMENT is after 3 years from date of payment or 3 years from the last day fixed for Filing of the return

b) if there is FAILURE to file a Return or its a FRAUDULENT RETURN:
— ASSESSMENT prescribes after 10 years from DISCOVERY;

c) COLLECTION: While Collection prescribes after 5 years from Assessment on both instances

d) Suspension of the Prescriptive Period:
1) There is no property from the taxpayer which can be located to satisfy tax liabilities
2) Taxpayer is out of the country
3) Taxpayer can not be located

Question 5

K. Tax Remedies
1. Government remedies

a. Assessment of Internal Revenue Taxes
i. Requisites of a Valid Assessment
ii. False Returns, Fraudulent Returns, Non-Filing of Returns

What is assessment notice?
Requisites?
Compare False vs Fraudulent vs Non filing of returns

b. Collection of Delinquent Taxes
c. Statute of Limitations

Answer 5

Assessment notice is a Formal Demand from BIR requiring taxpayer to pay the TAX DUE plus Interest plus Civil Penalties.

Power to assess is vested with CIR.

Requisites of a Valid Assessment
1. It must be in WRITING
2. Must contain the law and FACTS on which it is based
3. Contains a DEMAND for payment within the prescribed period
4. It is served UPON and received by the TAXPAYER

Fraudulent Returns
- Filing a fraudulent return will
make the taxpayer liable for the
crime of moral turpitude as it
entails WILFULNESS and fraudulent
intent on the part of the individual.

False Return
- Contains WRONG INFORMATION due
to mistake, carelessness or ignorance.

Non-Filing of Return (mala prohibita)
- OMISSION to file a return within the
prescribed date provided by law.
The mere omission is already a
violation regardless of the
fraudulent intent or wilfulness of
the individual.

Question 6

K. Tax Remedies
1. Government remedies

a. Assessment of Internal Revenue Taxes
b. Collection of Delinquent Taxes
c. Statute of Limitations

Explain collection of DELINQUENT TAXES

Answer 6

Unlike a DEFICIENT TAX, a DELINQUENT TAX (PARTIAL OR NO PAYMENT IS DELINQUENT) Can be collected
(1) administratively via distraint or levy or by
(2) judicial action.