Tax RemediesPeriod of Limitations Upon Assessment- internal revenue taxes shall be assessed within the three years after

the last day prescribed by law for the filing of the return, and no proceeding in court without assessment for the collection of such taxes shall be begun after the expiration of such period. Provided that in a case where a return is filed beyond the period prescribed by law the 3 year period shall be counted from the day the return was filed. When tax assessment deemed? It is the date when said demand letter or notice is released, mailed or sent to the tax payer that constitutes actual assessment. STEPS 1. 2. 3. 4. LETTER OF AUTHORITY NOTICE-INFORMAL CONFERENCE PRE ASSESSMENT NOTICE FINAL ASSESSMENT

Effect of Filing an Amended Return The Supreme Court held that where the amended return is substantially different from the original return, the right of the Bir to assess the tax is counted from the filing of the amended return. REASON; If counted from the original return this would permit taxpayers to evade taxes by simply reporting their original return. Effect of filing a wrong return- this would not take place the correct return which for the purposes of the tax in question should actually be the percentage tax return Applicable prescriptive period if tax payers fails to file a return. Commissioner may assess the tax anytime within ten years after the discovery of the omission. Prescriptive period when their is fraud- the ten year period applies counted from the discovery of fraud. Notes: Fraud , in order to justify the 10year prescriptive period, must be a product of a deliberate intent to evade taxes. Mere underdeclaration in the tax returns of property will not necessarily imply fraud. Prescription of governments right to collect taxes: maybe collected by distraint or levy or by proceeding in court with in five years following the assessment of the tax. Note: Special law prevails over general Law Note: In case of a false or fraudulent return with intent to evade tax or of failure to file return, the tax may be assessed or a proceeding in court for the collection of such tax maybe filed without assessment within 1 years after the discovery of the falsity INTERRUPTION OF THE PRESCREPTIVE PERIOD COMMISSIONER IS PROHIBITED FROM MAKING THE ASSESSMENT OR BEGINNING DISTRAINT AND LEVY OR A PROCEEDING IN A COURT AND FOR 60 DAYS THEREAFTER TAX PAYER REQUEST FOR REINVESTIGATION WHICH WAS GRANTED BY THE COMMISSIONER TAX PAYER CANNOT BE LOCATED TAX PAYER IS OUT OF THE PHILIPPINES WHEN THERE IS DISTRAINT OR LEVY BUT THE PROPERTY CANNOT BE LOCATED

Chapter 7 TAXPAYERS REMEDIES

Administrative Protest It is a remedy before payment, while a tax refund or a tax credit is a remedy of the taxpayer after he has paid the taxes. Rule: When the commissioner or his duly authorized representative finds that proper taxes should be assessed, he shall first notify There is no pre assessment required in the following: Deficiency of the tax is mathematical error The discrepancy has been determined between the tax withheld and the amount actually remitted by the withholding agent Opted to claim refund When the excise tax due has not been paid Article locally purchase or imported by an exempt person has been sold and traded or transferred to non exempt persons. Disputed Assessment- The taxpayer or his representative may protest administratively against the formal letter of demand and assessment notice within thirty days from the date of the receipt thereof. If the taxpayer fails to protest within 30 days the assessment shall become final If the protest is denied in whole or in part, the tp may appeal to the CTA within 30 days from the receipt of the said decision , otherwise the assessment shall become final and executor If the commissioner or his representative fails to act on the protest within 180 days from the date of submission by the taxpayer of the required documents to support his protest, the tax payer may appeal to the CTA within 30 days, from the lapse of 180 day Administrative DecisionDecisions state the : Facts , the applicable laws, rules and regulations otherwise it is void. Constructive Service If the notice is through mail, and no re response from the TP within the prescribed period the same shall be constructively and actually received by the tp. If tp refused to accept the notice- the same shall also be constructively served, by leaving the notice to the tp premises witnessed qnd signed by at least two revenue officers.

Request for reconsideration refers to a plea for a reevaluation of an assessment on the basis of existing records without need of additional evidence Reinvestigation refers to a plea for reinvestigation of an assessment on the basis of newly discovered or additional evidence Note: No suit for the recovery of tax erroneously or illegally collected , until a claim has been duly filed with the commissioner. In any case no suit shall be filed after the expiration of two years from the date of payment regardless fo any supervening event. TAX REFUND WHEN THERE IS ACTUALLY REIMBURSEMENT OF THE TAX TAX CREDIT- THE GOVERNMENT ISSUED A TAX CERTIFICATE COVERING THE AMOUNT DETERMINED TO BE REIMBURSABLE

IS PAYMENT UNDER PROTEST NECESSARY IN CLAIMS FOR REFUND? PAYMENTS UNDER PROTEST ARE NOT NECESSARY IN ORDER THAT TAX RECOVERIES MAYBE OBTAINED. Requirements for refund A written claim or tax credit must be filed by the taxpayer with the commissioner Reason: To afford the commissioner an opportunity to correct the action of subordinate officers To notify the government that the taxes to refunded are under question Two years prescriptive period for tax refund. Refund in BIR as well as in CTA should be commenced within two years counted from the date of the payment regardless of supervening event. Court ruling. If the period is about to end, the tp must file his claim to the CTA without awaiting the decision of the collector Suspension of the two year period for filing claims of refund: Pending litigation between the govt. and the TP The Commissioner abide the decision of the Supreme Court Interest on Tax Refunds- The government cannot required to pay interest on taxes refunded to the taxpayer unless the commissioner acted with patent arbitrariness. COURT OF TAX APPEALS Salient Features Powers Administer oaths Receive evidence To summon witnesses To issue sub poenas To punish Contempt To prescribed forms of writs To promulgate rules It is a judicial body It is a regular court vested with appellate jurisdiction Court of special Jurisdiction and such can only take cognizance of such matters as are clearly within its jurisdiction It is not governed by the technical rules of evidence

Jurisdiction Decisions of the Commissioner of BIR in cases involving disputed assessments, refunds of IR taxes, penalties and other charges Decisions of the Commissioner of Customs in cases involving custom duties, fees, or other money charges, seizure, detention or release of property, fines and forfeitures It is well settled that the assessment are not decisions of the BIR Mere assessment are not appealable Rulings of the Commissioner are likewise not appealable to the CTA

A letter of the commissioner reminding a TP of his obligation to pay taxes which reiterates a previous demand for the settlement of an assessment is in effect a decision on a disputed assessment which is appealable to the CTA Ordinary tax collection falls outside the CTA jurisdiction.

COMPROMISE PENALTIES The imposition of compromise penalties in lieu of a criminal action is illegal and authorized if the same is without the conformity of the TP TAX COLLECTION IS NOT SUSPENDED DURING APPEAL An appeal to the CTA from a decision of the Comm. Shall not suspend the payment, levy, distraint or sale of any property unless a motion to that effect shall have been presented to the court and granted by it on the ground that such collection will jeopardize the TP Thirty Day Prescriptive Period Of Appeal It will run from the date the taxpayer receives the appealable decision of the Commissioner Administrative Actions Tantamount to Appealable Decisions The court held that the action of the comm. In collecting the tax by summary remedies during the pendency of the protest did not constitute a decision for lack of finality and that the appealable decision was the subsequent action taken by the BIR when it filed a civil action for collection Appeal from the decision of the CTA are appealed to the CA Interlocutory orders- Interlocutory Orders of the CTA are not appealable Ancillary Jurisdiction Of the CTA The power to issue writs or prohibition and injunction is only supplementary to its appellate jurisdiction Local Taxation

Reminders For Local Taxing Power, a valid local ordinance must be enacted It requires public hearing Sec 191. Empowers to adjust tax rate every five years Collection of local taxes shall not be left to any private person Nature of local taxation- Each local government unit shall have the power to create its own sources of revenues and levy taxes. However the constitutional provision above cited is not an express grant of local taxing power but only a mandate on the legislature to implement and delegate Local Governments are authorized to levy taxes, they have the power to prescribed penalties in the tax ordinance that they enacted. Power to grant Local Tax Exemptions good for one year and may extend only if a valid ordinance is enacted Regulatory fees are not one of exemptions which are levied under police power. Income Tax is National Tax Residual Powers Of LG- means that it can also impose those taxes and charges which do not fall within the scope of taxes which are enumerated in the LGC Limitations of the residual Powers Constitutional Limitations Common Limitations

Fundamental Principles governing Local Taxation Not unjust Excessive Oppressive Confiscatory Contrary to the declared policy

PRE EMPTION OR EXCLUSIONARY RULE. It refers to an instance wherein the National Government elects to tax a particular area, impliedly withholding from local government the delegated power to tax Fundamental principles in local taxes Briefly Explained a. Inherent or constitutional limitations on the taxing power , in general Uniformity Equitability and progressivity Public purpose Must accrue exclusively to the benefit of the LG b. Statutory in origin Must not be oppressive, unjust , confiscatory Not contrary to law, public policy, national economic policy, or in restraint in trade The collection shall not be left to any private person Common Limitations Taxes which are levied under the NIR. These are preempted taxes except in some cases Those are imposed under Tariff and Custom Code Those contravene existing governmental policies Taxes and charges imposed under special laws

Percentage Taxes-it is imposed when there is a set of ratio between the amount of the tax and the volume of the sales. Professional Tax- the SP may determine the annual professional; tax on persons engage in the exercise or practice of a profession requiring government examination at such reasonable amount, but shall in no case exceed 300 php Note: only those who pass the bar and board or other examination conducted by the PRC Professionals exclusively employed in the Government shall exempt from payment of this tax Exemptions: those professionals who are employed by individuals and corporations shall pay the tax before employment and annually thereafter. Who may impose local taxes Municipalities Cities Baranggays with respect to taxes on retailer store, service fees and brgy clearance Situs of Local Taxation IT IS THE PLACE OF THE CONSUMMATION OF THE SALE ASSOCIATED WITH DELIVERY OF THE THINGS WHICH ARE SUBJECT MATTER TO THE CONTRACT THAT DETERMINES. Collection of Taxes- First fifteen days LG Levy and Distraint, prescriptive period 5 years Community Tax( authorize to levy )- Cities or municipalities Persons Liable: Individuals inhabitants of the Philippines18 years of age who has been regularly employed on a wage or salary basis for at least 30 consecutive working days or who engage business or who owns a real property

Civil Remedies for the collection of Taxes and Revenue Local Governments Lien-it is superior to all Lien Civil remedies- Shall be relates to surcharges and interest resulting from delinquency Administrative Action through distraint of goods Judicial Action Note: All tax cases, the RTC has a jurisdiction. REMEDIES OF THE TAXPAYER IN LOCAL TAXATION. A. PROTEST BY MEANS OF APPEAL TO THE SEC OF JUSTICE B. PROTEST AGAINST ASSESSMENT C. CLAIM FOR REFUND OR TAX CREDIT

Protest against a newly enacted ordinance- questions of the constitutionality of an ordinance-maybe raised on appeal within 30 days from the effectivity thereof to the Sec of Justice who shall render a decision within 60 days from the date of receipt. The appeal from the the decision of the SEC is appealable to the REGular Court Protest Against Assessment- Within 60 days from receipt of the notice of assessment, the taxpayer may file a written protest with the local treasurer, contesting the assessment otherwise the assessment is final The Local Treasurer may cancel wholly or partially the Assessment if he found that it is meritorious. Claim for refund or Tax Credit- the LG provides that no case or proceeding shall be maintained in any court for the recovery of any tax erroneously collected until a written claim for refund or credit has been filed by the local treasurer. REAL PROPERTY TAXATION

Real Property Taxation defined as a direct tax on the ownership of lands and buildings or other improvements therein not specifically exempted and is payable regardless such is used or not. Characteristics It is a direct tax on ownership of real property It is proportionate basing on the certain percentage of value Creates a single divisible obligation Local Tax Extent of the taxing power- do not only have the power to levy real estate taxes but may also fix real estate tax rates It has a power top prescribe penalties for Tax Violations Do local Government have the power to exempt real property tax? Exemption is only limited to those properties enumerated under the LGC Real Property owned by the Philippines or of its political subdivision except went is beneficial to the other persons Charitable Institutions Actually, Directly and Exclusively used for religious and charitable purposes Machineries that actually used by local water utilities and GOCC engaged in supply and distribution of water Real Property owned and duly registered cooperative Machineries used for pollution control and environmental protection

Notes: Once the use of those properties lose their tax exempt character, their tax exempt status likewise ceases. REMEDIES OF LOCAL GOVERNMENT IN RP TAXATION Date of Accrual of Tax and Tax Lien-It shall accrue on the first day of January and from that date it shall constitute a lien on the property LG lien Payment of RP taxes in installments Interest on unpaid real Property Tax-2% per month Prescriptive Period- 5 years from the date it becomes due. No action will be instituted after the expiration of such period. Interruption of the prescriptive period Local treasurer is legally prevented from collecting The owner request for reinvestigation and executes a waiver The owner is out of the country or cannot be located

Collection by Administrative remedies Warrant of levy Sale or auction Note: Within one year from the date of the sale, the owner of the property therein may redeem the property upon payment of delinquent tax, including the interest REMEDY OF THE TAX PAYER Pay the Tax First File a protest to the treasurer within 30 days For the period of 60 days Approve Tax Refund disapprove or denied or in action file an appeal to the LBAA ( RENDER DECISIONS WITHIN 120 DAYS) CBAA ( central board assessment ) 30 DAYS CTA ( regular courts has no Jurisdiction )15 DAYS CA SC Sales Tax Rule 1 . Branch-Pay to the branch Rule 2. No branch but outlet- pay to main office Rule 3. Factory 30% to the principal amd 70% to the factory Rule 4. Factory 60% Plant 40% Example : in the tax amounting 1000, 300 to the principal , 60% of 700 to the factory, 40% of the 700 to the plant If there more than one 60% divide ot each factory and 40% divide each plant

REMEDY OF WITH REGARDS TO CUSTOMS BOC CTA CA SC

Automatic Review of the commissioner whenever the decisions of the Collector is adverse to the government Jurisdiction with regards to search and seizure All seas within the jurisdiction of the Philippines and all coasts, ports, harbors and bays, rivers and inland waters whether navigable or not fro the sea. Notes: When a vessel becomes subject to seizure by reason of an act done in the Philippine waters in violation of the tariff and customs law, a pursuit of such vessel begun within the jurisdictional waters may continue beyond the maritime zone and the vessel may be seized on the high seas.