REMEDIES

Question 1

1. The power to decide disputed assessments, refunds of internal revenue taxes, fees or other
   charges, penalties imposed in relation thereto, or other matters arising under the Tax Code or
   other laws administered by the BIR is vested with
   a. The Supreme Court
   c. The Regular Courts
   b. The Court of Tax Appeals
   d. The Commissioner of the BIR

Answer 1

D

Question 2

2. It is the official action of an administrative officer in determining the amount of tax due from a
   taxpayer, or it may be a notice to the effect that the amount stated therein is due from the
   taxpayer with a demand for payment of the tax or deficiency stated therein
   a. Tax audit
   c. Tax mapping
   b. Tax investigation
   d. Tax assessment

Answer 2

D

Question 3

3. Where a return was filed, as a general rule, the prescriptive period for assessment after the
   date the return was due or was filed, whichever is later, is within
   a. 3 years
   c. 5 years
   b. 4 years
   d. 6 years

Answer 3

A

Question 4

4. Which of the following prescriptive period for the BIR to conduct a tax audit is correct?
   a. Ten years when no return is filed
   b. Ten years when return filed is false or fraudulent
   c. Three years from actual filing of return or from the deadline for filing if the return filed
   is not fraudulent
   d. All of the above

Answer 4

D

Question 5

5. A Pre-Assessment Notice (PAN) is required
   a. When a discrepancy has been determined between the tax withheld and the amount
   actually remitted by the withholding agent
   b. When an article locally purchased or imported by an exempt person has been sold,
   traded or transferred to non-exempt persons
   c. When the deficiency tax is the result of mathematical errors in the computations
   appearing on the face of the return
   d. Before a Final Assessment Notice (FAN) is sent to the taxpayer

Answer 5

D

Question 6

6. The running of the prescriptive period for assessment is suspended, except
   a. When the warrant of distraint has been duly served upon the taxpayer and no property
   could be located
   b. If the taxpayer informs the Commissioner of any change in address
   c. When the taxpayer requests for a reinvestigation which is granted by the
   Commissioner of Internal Revenue
   d. When the taxpayer is out of the Philippines

Answer 6

B

Question 7

7. Which of the following is correct?
   a. A protest may be filed by the taxpayer anytime before the BIR collects the tax
   b. The assessment shall include only the tax proper
   c. The assessment should be made by the BIR within five years from the filing of the return
   d. A protest should be filed by the taxpayer, otherwise the assessment becomes final and
   can no longer be questioned in court

Answer 7

D

Question 8

8. The following remedies are available to the government to collect taxes except
   a. Distraint
   b. Levy
   c. Entering into compromise of tax cases
   d. Inquiring into bank deposit accounts of taxpayers

Answer 8

D

Question 9

9. Where any national internal revenue tax is alleged to have been erroneously or illegally
   collected by the BIR, the taxpayer should first
   a. File an action for refund with the RTC
   b. File an action for refund with the CTA
   c. File a claim for refund or credit with the CIR
   d. File an action for refund with the MTC

Answer 9

C

Question 10

10. A Tax Credit Certificate issued in accordance with the pertinent provisions of the Tax Code,
    which remains unutilized, shall, unless revalidated, be considered invalid, and shall not be
    allowed as payment for internal revenue tax liabilities of the taxpayer, and the amount covered
    by the certificate shall revert to the general fund, after how many years from the date of issue?
    a. Two (2) years
    c. Five (5) years
    b. Three (3) years
    d. Ten (10) years

Answer 10

C

Question 11

11. The Commissioner of BIR may compromise any internal revenue tax in the following instances,
    except
    a. The financial position of the taxpayer demonstrates a clear inability to pay the assessed
    tax
    b. The tax or any portion thereof appears to be unjustly or excessively assessed
    c. The taxpayer has been granted by the SEC or by any competent tribunal a moratorium
    or suspension of payments to creditors, or otherwise declared bankrupt or insolvent
    d. A reasonable doubt as to the validity of the claim against the taxpayer exists

Answer 11

B

Question 12

12. The following are grounds to cancel a tax liability by the Commissioner, except
    a. The administration and collection costs involved do not justify the collection of the amount
    b. A reasonable doubt as to the validity of the claim against the taxpayer
    c. The tax is unjustly or excessively assessed
    d. None of the above

Answer 12

B

Question 13

13. The summary remedies of distraint of personal property shall be exercised by the
    Commissioner of Internal Revenue if the amount involved is in excess of
    a. P10,000
    c. P1,000,000
    b. P100,000
    d. P10,000,000

Answer 13

C

Question 14

14. The property of a delinquent taxpayer shall not be placed under constructive distraint by
    the Commissioner of Internal Revenue if in his opinion the taxpayer is
    a. Retiring from any business subject to tax
    b. Intending to leave the country or to remove his property therefrom
    c. Doing all possible legal means to dispute the assessment
    d. Performing an act tending to obstruct the proceedings for collecting the tax due

Answer 14

C

Question 15

15. The distinction between actual distraint and constructive distraint is that
    a. Actual distraint may be made on the property of any taxpayer whether delinquent or
    not while constructive distraint is made on the property only of a delinquent taxpayer
    b. In actual distraint, there is a taking of possession, while in constructive distraint, the
    taxpayer is merely prohibited from disposing of the property
    c. Actual distraint is effected by requiring the taxpayer to sign a receipt of the property or
    by the revenue officer preparing and leaving a list of the distrained property or by service
    of a warrant of distraint or garnishment
    d. None of the above

Answer 15

B

Question 16

16. Which of the following statements is false? In case the personal property of the taxpayer has
    been distrained by the government thru the Bureau of Internal Revenue and the property
    a. Is about to be sold at public auction, the taxpayer may exercise the right of pre-emption
    b. Is sold at public auction, any excess shall accrue to the taxpayer and any deficiency
    shall be to the account of him also
    c. Has been sold at public auction, the taxpayer may exercise the right of redemption
    d. Is being sold at public auction and the amount of bid is much less than the value of the
    goods, the Commissioner may purchase the same for the government, and this satisfied
    the liability

Answer 16

C

Question 17

17. Statement I: All criminal violations may be compromised, except those already filed in court and
    those involving fraud.
    Statement II: For filing a false and fraudulent return, a 25% surcharge is imposed.
    Statement III: A compromise for a tax liability on the ground of financial incapacity to pay shall
    still involve a payment of tax from the taxpayer at a minimum compromise rate of 40% of the
    basic assessed tax.
    Statement IV: A compromises other than on the ground of financial incapacity to pay, the
    compromise shall involve a minimum compromise rate of 10% of the basic assessed tax.
    a. Only one (1) of the above statements is true
    b. Two (2) of the above statements are true
    c. Three (3) of the above statements are true
    d. All of the above statements are true

Answer 17

A

Question 18

18. Mr. X, a self-employed taxpayer, filed his annual ITR for calendar year 2019, and paid P400,000.
    Upon examination of his return, it was disclosed that he erroneously computed the tax due. The
    correct amount of tax due should be P450,000. The taxpayer is assessed for deficiency income
    tax in a letter of demand and assessment notice issued on June 15, 2021 calling for payment on
    or before August 15, 2021. The amount still due on August 15, 2021 is
    a. P50,000
    c. P83,000
    b. P58,000
    d. P108,000

Answer 18

B

Question 19

19. The ITR for the calendar year 2020 was due for filing on April 15, 2021, but the taxpayer
    voluntarily filed his tax return without notice from the BIR, only on July 15, 2021. The tax due per
    return amounts to P500,000.
    Question I: The total amount due on July 15, 2021 is
    a. P625,000
    c. P640,000
    b. P515,000
    d. P665,000
    Question II: Assuming the taxpayer filed his return but only after the notice from the BIR was
    received on July 15, 2021. The total amount due on July 15, 2021 is
    a. P515,000
    c. P740,000
    b. P750,000
    d. P765,000
    Question III: Assuming the ITR was filed on April 15, 2021 but through an internal revenue officer
    other than with whom the return is required to be filed. The total amount due is
    a. P625,000
    c. P640,000
    b. P515,000
    d. P665,000

Answer 19

C
D
A

Question 20

20. ABC Corporation filed its ITR and paid the tax for calendar year 2019 with a net taxable income
    of P2,000,000. Upon investigation, it was disclosed that its ITR was false and fraudulent because it
    did not report a taxable income amounting to another P800,000. Failing to protest on time against
    the preliminary assessment notice, a final letter of demand and assessment notice issued on
    June 15, 2021 calling for payment on or before July 15, 2021.
    Question I: The amount still due on July 15, 2021 is
    a. P240,000
    b. P346,000
    c. P396,000
    d. P276,000
    Question II: Assuming that the assessment has become final and collectible, but the corporation
    pays the tax assessment only on September 15, 2021, the total amount due is
    a. P502,920
    c. P403,920
    b. P396,000
    d. P495,000

Answer 20

C
A

Question 21

21. Mr. X filed an income tax return for the calendar year 2018 on March 15, 2019. The BIR assessed
    a deficiency income tax on April 10, 2021. When is the last day for the BIR to make an assessment?
    a. April 15, 2022
    c. April 10, 2021
    b. April 15, 2021
    d. March 15, 2022

Answer 21

A

Question 22

22. Mr. X filed his Income Tax Return (ITR) for taxable year 2018 on May 5, 2019. After an
    investigation, it was discovered that the tax paid was deficient. The last day for the BIR to send
    an assessment is
    a. April 15, 2022
    b. May 5, 2022
    c. May 5, 2021
    d. April 15, 2021

Answer 22

B

Question 23

23. Mr. X filed his 2018 Income Tax Return (ITR) on April 10, 2019. On June 20, 2019, he filed an
    amended return which is substantially different from the original return. The last day to release,
    mail or send an assessment is
    a. April 10, 2022
    b. April 15, 2022
    c. June 20, 2022
    d. June 20, 2019

Answer 23

C

Question 24

24. Date assessment was received-March 31, 2021
    Date petition for reinvestigation was filed with the BIR-April 10, 2021
    Date of filing of documents to support the petition-May 15, 2021
    Date decision of denial of the petition was received-September 25, 2021
    When is the last day to appeal to the CTA?
    a. April 15, 2022
    b. November 5, 2021
    c. December 5, 2021
    d. October 25, 2021

Answer 24

D

Question 25

25. Date assessment was received-March 10, 2021
    Date petition for reinvestigation was filed with the BIR-March 31, 2021
    Date of filing of documents to support the petition-May 8, 2021
    No decision on the protest is received as of-October 30, 2021
    When is the last day to appeal to the CTA?
    a. April 15, 2022
    b. November 8, 2021
    c. December 4, 2021
    d. November 30, 2021

Answer 25

C

Question 26

26. Date of payment of tax erroneously paid-April 15, 2020
    Date of claim for refund was filed-February 15, 2021
    Date of decision of denial by the BIR was received-September 15, 2021
    Question I: When is the last day to appeal to the CTA?
    a. April 15, 2022
    b. January 15, 2022
    c. November 15, 2021
    d. October 15, 2021
    Question II: Assuming the date of decision of denial by the BIR was received on March 31, 2022,
    when is the last day to appeal to the CTA?
    a. April 30, 2022
    b. April 15, 2022
    c. March 31, 2023
    d. May 30, 2023d.

Answer 26

D
B

Question 27

27. Date the assessment was received-March 10, 2021
    Date of petition for reinvestigation was filed with the BIR-March 31, 2021
    Date of filing of documents to support the petition-May 8, 2021
    Date the decision of denial by the BIR was received-June 10, 2021
    Date the petition for reconsideration was filed with the BIR-June 18, 2021
    Date the decision of denial of the petition for reconsideration was received-June 25, 2021
    Question I: When is the last day to appeal to the CTA?
    a.
    July 28, 2021
    b. July 20, 2021
    c. July 10, 2021
    d. July 18, 2021
    Question II: Assuming the BIR issued an amended decision on the petition for reconsideration,
    and the amended decision was received on June 25, 2021, when is the last day to appeal to the
    CTA?
    a. July 25, 2021
    b. July 17, 2021
    c. July 7, 2021
    d. July 15, 2021

Answer 27

C
A

Question 28

28. Mr. X filed an income tax return for the calendar year 2020 on March 5, 2021. The BIR issued a Formal Letter of Demand/Final Assessment Notice on April 5, 2023 which has become final,
    executory and demandable. When is the last day for the BIR to collect?
    a. April 5, 2028
    c. April 15, 2024
    b. April 15, 2025
    d. March 5, 2024

Answer 28

A

Question 29

29. Mr. X paid his income tax liability for 2020 on April 15, 2021. It was found out later on July 31, 2021 that he overpaid by more than P100,000.
    Question I: When is the last day to file a claim for tax refund?
    a. April 15, 2023
    c. April 15, 2024
    b. June 31, 2023
    d. June 31, 2024
    Question II: Assuming his claim for tax refund in the preceding number was denied and the denial
    was received on April 25, 2024, what is the proper remedy available to Mr. X?
    a. Appeal to Court of Tax Appeals on or before May 10, 2024
    b. Appeal to Court of Tax Appeals on or before May 15, 2024
    c. File a motion for reconsideration on or before May 25, 2024
    d. No more remedy since the 2-year period already expired

Answer 29

A
C

Question 30

30. ABC Inc. received a notice of assessment and a letter from the BIR demanding the payment of
    P5 million pesos in deficiency income taxes for the taxable year 2020. The financial statements of the company show that it has been suffering financial reverses from the year 2021 up to the present. Its asset position shows that it could pay only P1,000,000 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 ABC Inc.?
    a. ABC Inc. must immediately deposit the P1,000,000 with the BIR
    b. ABC Inc. must promise to pay its deficiency when financially able
    c. ABC Inc. must show it has faithfully paid taxes before 2021
    d. ABC Inc. must waive its right to the secrecy of its bank deposits

Answer 30

D

Question 31

31. Mr. X, a Filipino citizen, filed his 2020 income tax return on March 15, 2021. On December 2021, he left the Philippines as an immigrant to join his family in US. After investigation of said return, the BIR issued a notice of deficiency income tax assessment on April 15, 2023. Mr. X returned to the Philippines as a balikbayan on December 8, 2023. Finding his name as a delinquent taxpayer, he filed a protest against the assessment on the ground that he did not receive the notice of
    assessment and that the assessment had prescribed. Will the protest of Mr. X prosper?
    a. No. The right of the government to make a tax assessment is prescriptible, irrespective of whether the delinquent taxpayer is out of the country or not
    b. No. The assessment has not prescribed because it was issued by the BIR on April 15, 2023,which is within the reglementary period of 3 years from the time the return should have been filed on April 15, 2021
    c. Yes. The assessment has prescribed because it was issued by the BIR on April 15, 2023, which is already beyond the reglementary period of 3 years from the time the return was filed on March 20, 2021
    d. Yes. In the instant case, the suspension of the running of the prescriptive period applies because the assessment notice was issued by the BIR beyond 3 years prescriptive period

Answer 31

B

Question 32

32. An assessment was issued by the BIR against the taxpayer based on a review of the financial statements presented by the taxpayer together with the tax returns, without conducting an actual investigation, but it presented the facts and laws of the findings of the BIR. The same was questioned by the taxpayer on the ground that it was capricious, whimsical and without legal basis. The findings of the BIR would stand against the taxpayer because
    a. The taxpayer is prohibited from questioning the wisdom of congress in creating such a law
    which allows the executive branch of government to generate revenues from whatever sources
    b. There is a presumption of correctness on the findings of the BIR which shifts the burden
    to the taxpayer to disprove
    c. There is a presumption of regularity on the work of the BIR examiner
    d. The BIR stated the facts and laws which was the basis of the assessment made

Answer 32

B

Question 33

33. On January 20, 2020, a taxpayer filed a petition for reinvestigation of an assessment of internal revenue tax. He received a final decision of the BIR on the petition on April 30, 2020. He failed
    to appeal the decision to the Court of Tax Appeals. The BIR was collecting the tax by summary proceedings on June 20, 2025. The taxpayer was opposing the collection of the tax on the ground of prescription of the right of the government to collect. The last day for collection was on
    a. July 29, 2025
    b. June 29, 2025
    c. April 30, 2025
    d. May 30, 2025

Answer 33

C

Question 34

34. Mr. X erroneously paid an internal revenue tax of P600,000 on November 14, 2019. He filed a claim for refund with the Commissioner of Internal Revenue on July 31, 2020. The BIR, however, approved the refund only of P200,000 on January 20, 2021. On December 1, 2021, he engaged your tax services on a contingent basis for the purpose of recovering the remaining P400,000. Will you accept the engagement?
    a. No, because the taxpayer’s claim for refund has been administratively fully satisfied
    b. Yes, because the claim for refund was duly administratively within two years from the date of payment of the tax
    c. Yes, because the denial of refund for the remaining P400,000 is still appealable to the Court of Tax Appeals
    d. No, because as of December 1, 2021 the right of the taxpayer to contest before the Court of Tax Appeals the BIR’s denial of the refund for the remaining P400,000 has already prescribed

Answer 34

D

Question 35

35. ABC Corporation received a notice of assessment from the BIR. It seasonably filed a motion for reinvestigation with all the necessary supporting documents, but the BIR failed to act on the protest. Thirty days from the lapse of 180 days from submission of the supporting documents,
    ABC still has not elevated the matter to the CTA. What remedy, if any, can ABC Corporation take?
    a. It may no longer appeal since there is no BIR decision from which it could appeal
    b. None. Its right to appeal to the CTA has prescribed
    c. It may file a motion to admit appeal if it could prove that its failure to appeal was due to the negligence of the counsel
    d. It may wait for the final decision of the BIR on his protest and appeal it to the CTA within 30 days from receipt of such decision

Answer 35

D

Question 36

36. Mr. X paid excessive tax on April 15, 2019. On December 20, 2020 he filed a written claim for refund. His claim was denied by the BIR and he received the denial on March 20, 2021. Mr. X
    filed a motion for reconsideration with the BIR on March 31, 2021. On April 18, 2021, he received the final denial of the BIR. What will be his remedy?
    a. File another motion for reconsideration with the BIR within 30 days after the receipt of the final denial
    b. File an appeal with the CTA within 30 days after the receipt of the final denial
    c. File an appeal with the CTA within 15 days after the receipt of the final denial
    d. Mr. X has no more remedy against the final denial

Answer 36

D

Question 37

37. On March 30, 2021, Company X, received a notice of assessment and a letter of demand on its April 15, 2018 final adjustment return from the BIR. Company X then filed a request for reinvestigation together with the requisite supporting documents on April 25, 2021. On June 2,
    2021, the BIR issued a final assessment reducing the amount of the tax demand. Since Company X was satisfied with the reduction, it did not do anything anymore. On April 15, 2026 the BIR garnished the corporation’s bank deposits to answer for the liability

Question 1: Was the BIR action proper?
a. No. The taxpayer did not apply for a compromise
b. Yes. The BIR has 5 years from the filing of the protest within which to collect
c. No. Without the taxpayer’s prior authority, the BIR action violated the Bank Deposit Secrecy Law
d. Yes. The BIR has 5 years from the issuance of the final assessment within which to collect

Question 2: What is the effect of Company X’s failure to file a protest on its assessed deficiency taxes?
a. The taxpayer’s liability becomes fixed and subject to collection as the assessment becomes final and collectible
b. The taxpayer may appeal his liability to the CTA since the assessment is a final decision of the Commissioner on the matter
c. The BIR could already enforce the collection of the taxpayer’s liability if it could secure authority from the CTA
d. The taxpayer may file a `motion for reconsideration to the CIR on the matter

Answer 37

D
A