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Assessment

Assessment. State remedy Written notice to a taxpayer to the effect that the amount stated therein is due as a tax and containing a demand for payment Presumption of correctness on the part of the CIR, burden of proof lies on the taxpayer. PAN not Required.

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Assessment

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  1. Assessment • State remedy • Written notice to a taxpayer to the effect that the amount stated therein is due as a tax and containing a demand for payment • Presumption of correctness on the part of the CIR, burden of proof lies on the taxpayer

  2. PAN not Required • Mathematical error on the face of return • Discrepancy on tax withheld and amount actually remitted (2307 or 2306 mismatch) • Refund/claim for TCC with carry over • Excise tax was not paid • Purchase of exempt entities transferring to persons who are not exempt

  3. Administrative Remedies of the State • Distraint • Levy • Tax Lien • Forfeiture • Suspension • Administrative Fine

  4. Distraint • Tp must be delinquent • Assessed • Period to collect or assess not prescribed • 1m and below – RDO • Above 1m – CIR (1m and below – RDO) • Constructive exception • TP is retiring from business • Intending to leave Phil, remove property, conceal property • Performing acts tending to obstruct collection of tax

  5. Levy • Right of redemption is 1 year from date of sale • 15% interest per annum from date of sale to date of redemption

  6. Civil Action • Less than 1 m – RTC, MTC, MetroTC • 1m & above – CTA (9 magistrates divided into 3 division) • 30 days after FAN or court denial • May be filed simultaneously with criminal action

  7. Protest • Remedy of the tp • Petition for reconsideration and reinvestigation • Within 30 days from receipt of assessment • 60 days to submit supporting document • Within 30 days from receipt of denial go to Court or 180 days of inaction from protest • 15 days to appeal to CTA en banc after CTA denial • 15 days to appeal to SC from receipt of CTA en banc denial

  8. Refund • Remedy for • Collected erroneously or illegally • Penalty collected without authority • Excessive collection • Must be in writing • Filed within 2 years after the payment of tax or penalty • Earlier • Proof of payment • No interest • Court action should be within 2 years or 30 days after adverse bir decision (Earlier)

  9. Civil Action • Appeal to Court – within 30 days from receipt of adverse decision on protest or lapse of 180 days after submission of documents

  10. Criminal Action • Against erring BIR officials • Injunction

  11. TCC • May be applied to any internal revenue taxes except withholding • Surrender original • 5 year expiry

  12. Compromise • Mutual concession • Tp must have liability • Must have offer (minimum amount) • Accepted • Cases covered • Delinquent • Case with admin protest • Civil cases in courts • Collection cases in courts • Criminal violation NOT filed in court

  13. Compromise • Grounds • Doubtful validity (40% of basic) – any of • Jeopardy assessment • Presumptive assessment • Deadline not met • No court action taken • No legal basis • Financial incapacity (10% of basic) – any of • Corporation is dead • Earnings deficit of at least 50% • Net worth deficit • Compensation earner with compensation of 10,500 single or 21,000 married or less, no property or family home.

  14. Compromise Penalty • In lieu of criminal action • RMO 19-2007 • Not allowed on fraud

  15. Abatement • Wrong venue (25% surcharge <-pwede pa-babaan) • Erroneous written advise by RO (Revenue officer) • If not written, can’t abate • Prolonged labor dispute, business reverses • If you can’t pay salary, how can you pay interest • Difficult interpretation of the law • Beyond the control of the TP • Ex. EFPS (Electronic Filing Processing System) down on April 15 • Problem: Abatement is like refund (takes long before you can claim) • May be done without application if written on the face of the return.

  16. Prescription • 3 years from return filed or deadline (later) • 10 years if no return filed • 10 years if false or fraudulent (30% prima facie) (with 50% surcharge and no compromise penalty and no 25% surcharge, surcharge is civil or administrative penalty) • Amended return does not affect original prescription unless substantially different • Extended when (3 year period is not effective, i.e. 2 years in Philippines, on 3rd year you went out of the country, when you came back, counting continues) • TRO (Temporary restraining order) • Request for reconsideration and granted • TP cannot be located in registered address • If you want it to prescribe, inform BIR • i.e. Umalissa BIR after 2 years, when he comes back 1 year count continues • Distraint or levy duly served but tp has no property • TP out of the country

  17. Collection • Prescribe after • 5 years if with assessment • 10 years if false or fraudulent or no return filed

  18. 25% Surcharge • Failure to file any return and pay the tax due • Wrong venue/RO • Failure to pay deficiency tax • Late filing/short payment

  19. Interest • 20% on deficiency, delinquency, and extended payment

  20. Catch All • 5 years prescriptive period from any violation of the tax code from the day of commission or from the day of discovery, whichever is later

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