Northern CPAR: Taxation Taxes, Tax Laws and Tax Administration

NORTHERN CPA REVIEW

th
4 Floor Pelizloy Centrum, Lower Session Road, Baguio City, Philippines
Mobile Numbers: SMART 09294891758 & GLOBE 09272128204
E-mail Address: ncpar@yahoo.com
REX B. BANGGAWAN, CPA, MBA

TAXATION
TAXES, TAX LAWS AND TAX ADMINISTRATION

Tax
An enforced proportionate contribution imposed upon persons, properties, businesses,
rights, interests, privileges, transactions and acts within the territorial jurisdiction of the
taxing authority exercise by the legislature for a public purpose and generally payable in
money.

Elements of a Valid Tax:

1. must not violate the constitutional, inherent and or contractual limitation of the power
of taxation
2. must be uniform and equitable, not unjust, excessive, oppressive, confiscatory or
discriminatory
3. must be for a public purpose
4. must be levied by the taxing power (legislature) having jurisdiction over the object of
taxation
5. must be proportionate in character
6. generally payable in money, at regular interval (not regular in payment)

Classification of Taxes
A. As to purpose
1. Fiscal general, fiscal or revenue- tax imposed for the general purpose of the
government or to raise revenue for government needs ex: income tax
2. Regulatory special or sumptuary tax imposed for a special purpose or to
achieve some social or economic ends ex: tariff or custom duties

B. As to subject matter
1. Personal, poll or capitation tax of a fixed amount imposed on individuals
residing within a specified territory without regard to their property or the
occupation in which they be engaged in. ex: community tax certificate
2. Property tax tax imposed on property, whether real or personal, in proportion,
either to its value or in accordance with some other reasonable method of
apportionment. Ex: real estate tax
3. Excise tax or privilege tax tax imposed upon the performance of an act, the
enjoyment of a privilege or the engaging in an occupation. Ex: income tax, value-
added tax, privilege tax on business or occupation.

C. As to incidence
1. Direct the tax is demanded from one person in who is intended to pay it.
Example: income tax and personal tax
2. Indirect the tax is demanded from one person in the expectation and intention
that he shall indemnify himself at the expense of another by shifting the tax to
another taxpayer. Example: Value-Added Tax, customs duties and some percentage
taxes

D. As to amount
1. Specific tax a tax of a fixed amount imposed by the head or number. Example:
tax on distilled spirits, cigars and wines (PX/piece)
2. Ad valorem tax is imposed for a fixed proportion of the amount or value of the
property to which the tax is assessed. Examples: excise taxes on cigarettes and
gasoline, real property taxes and certain customs duties (X% of selling price)

E. As to rate
1. Proportional or flat rate the tax is based on a fixed percentage of the amount
of the property, income or other basis to be taxed. Ex: real estate tax, VAT and
percentage taxes

1
That in all things God will be glorified! Rex B. Banggawan, CPA, MBA TAX 6 Batch HQ02
th
Northern CPAR: Taxation Taxes, Tax Laws and Tax Administration
2. Progressive or graduated tax the tax rate increases as the tax base increases.
Progressive rate is preferred in achieving vertical equity. Ex: income tax, estate tax
and donors tax
3. Regressive tax the tax the rate of which decreases as the tax base increases.
The Philippines has no regressive tax, but some indirect taxes manifest a
regressive effect.
4. Mixed tax

F. As to imposing authority
1. National tax imposed by the National Government.
Examples:
a. income taxes c. value-added tax e. other percentage taxes
b. estate and donors tax d. excise tax f. documentary stamp tax
2. Local tax tax imposed municipal or local governments.
Examples:
a. real property tax d. community tax; and
b. professional tax e. tax on banks and other financial institutions
c. business taxes, fees and charges

DISTINCTION OF TAX WITH SIMILAR ITEMS

TAX VS. REVENUE

Tax Revenue
Refers to the amount imposed Refers to the amount collected
Only one of the sources of The product of taxation. It refers to
government revenues tall the funds derived by the
government whether from tax or from
other sources

TAX VS. LICENSE*

Point of distinction Tax License
Purpose For revenue For regulation
Amount No limit Limited
Subject of Imposition Person, properties, Required for the
business rights, interests, commencement of a
privilege, acts and business profession
transactions
Effect of non- Does not necessarily Makes the business
compliance make the act, business or illegal
profession illegal
Revocability Has a nature of Always revocable
permanence
Scope The power to tax includes Power to license does
the power to license not include the power to
tax
When imposed Post-activity Pre-activity
Basis of imposition Current data Preceding year or
quarter date. If new
business, based on
capitalization
Sources of Power Taxing power of the Police power of the
government government

TAX VS. TOLL*

Tax
Demand of sovereignty
Ones support for the government
Imposed only by the government
Based on government needs
Toll
Demand of ownership
Compensation for the use of somebody
elses property
May be imposed by the government or by
private individuals
Determined by the cost of the property
or improvements thereon

TAX VS. DEBT*

2
That in all things God will be glorified! Rex B. Banggawan, CPA, MBA TAX 6 Batch HQ02
th
Northern CPAR: Taxation Taxes, Tax Laws and Tax Administration
Tax Debt
Basis Law Contract
Effect of non- May involved imprisonment, No imprisonment
compliance except for poll tax
Assignable? No Yes
Mode of settlement Generally money Cash or In kind
Set-off? Generally not subject to set- Subject to set-off
off
Interest Does not earn interest except Draws interest when
when delinquent stipulated or when in
default

TAX VS. SPECIAL ASSESSMENT*

Tax
Subject of the business, interests,
imposition transactions, rights, persons,
properties or privileges
Effect on the person May be made a personal
owning the subject liability of the person
assessed
Basis of Imposition Necessity with no hope of
direct or immediate benefit
to the taxpayer
Coverage of General application
application
Special Assessment
Land
Cannot be made the
personal liability of the
person assessed, because it
is the land that answers for
the liability
Entirely on benefits
received
Exceptional in application

TAX VS. TARIFF

Tariff refers to a book of rates containing names of merchandises with corresponding
duties to be paid for the same. Tariff refers to the duties payable on goods imported or
exported. It is a system or principle of imposing duties on the importation or exportation
of goods. *Customs duties and tariffs are used interchangeably

TAX VS. PENALTY

Tax Penalty
to regulate conduct
Purpose to raise revenue through punishment and
suppression of injurious
act
Exercising the government the government or by
authority private individuals
Source Law Law or contract
Mode of in money in money or in kind
settlement

Note:
Payment of tax is compulsory to those who are covered by imposition
Taxes are important because they are the lifeblood of the government.
Taxes are personal. The burden of taxation cannot be transferred from one person to
the other by private agreement as this is determined by law
While the power of taxation includes the power to destroy, it is not absolute. It is
subject to limitation or restrictions.

TAX LAW
Any law that provides for the assessment and collection of taxes for the support of the
government and other public purposes

Sources of Tax Laws:

1. Constitution 5. Administrative Issuances or BIR
Rulings
2. Statutes and Presidential Decrees 6. Judicial Decisions
3. Executive Orders and Batas Pambansa 7. Local Ordinances

3
That in all things God will be glorified! Rex B. Banggawan, CPA, MBA TAX 6 Batch HQ02
th
Northern CPAR: Taxation Taxes, Tax Laws and Tax Administration
4. Tax Treaties and conventions with foreign countries 8. Revenue Regulation of by the
DoF

Revenue Regulation
Formal pronouncement intended to clarify or explain the tax law and carry into effect its
general provisions by providing details of administration and procedure. They have the
force and effect of law.

Administrative issuances or BIR Rulings these are the less general interpretations
of the tax laws at the administrative levels, being issued from time to time by the CIR, to
clarify certain provisions of the tax law. They are merely advisory or sort of an
information service to the taxpayer such that, none of them are binding except to the
addressee and may be reversed by the BIR at anytime.

NATURE OF PHILIPPINES TAX LAWS

Philippine Tax Laws are civil and nature and character. They remain effective even in
times of war. They are not penal in nature although penalties are provided for their
violation because they do not define crimes and provide for their punishment.

FUNDAMENTAL DOCTRINES IN TAXATION

A. Marshall Dictum The power to tax includes the power to destroy
- Constitutional if taxation power is used validly as an implement of police power in
discouraging certain acts and enterprises inimical to public welfare.
- Unconstitutional if in raising revenue, taxation is allowed to confiscate or destroy
properties
B. Holmes Doctrine Taxation power is the power to build
The power to tax should not be the power to destroy. The power to destroy is merely a
consequence of taxation.
C. Doctrine of Judicial Non-interference
The courts cannot inquire into the wisdom of a taxing act or the advisability or
expediency of at ax. The impracticability and absurd consequences of a tax law should
be addressed to the legislature and administrative authorities and not the courts
D. Prospectivity of Tax Laws tax laws are prospective in character and application
Exceptions:
1. the retroactive application is necessarily implied from the provisions of the law
2. it involves income tax
3. the retroactive application is clearly the intent of the Congress
E. Imprescriptibility in Taxation Taxes are imprescriptible unless the law itself
provides for such prescription.
F. Principle of Strictissimi Juris Taxation is the rule and exemption is the
exception
Tax exemption must be strictly construed against the taxpayer and liberally in favor of
the government.

G. Doctrine of Equitable Recoupment

- Where the refund of taxes are barred by prescription which can no longer be
claimed by a taxpayer but there is a present tax being assessed against the said
taxpayer, such present tax may be recouped or set-off against the tax, the refund of
which has been barred.
- Basis: The government cannot enrich itself at the expense of the taxpayer.
*This doctrine is not applicable in the Philippines as it conflicts with prescription
laws.
H. Non-compensation or Set-off Rule
The government and the taxpayer are not creditor and debtor to each other. Taxes are
not in the nature of contracts between the parties but grew out of a duty arising from
law; hence, they cannot be set-off.
I. Doctrine of Estoppel
The State cannot be estopped by the neglect, errors, or mistakes of its agents or
officers. Thus, the erroneous application and enforcement of law by public officials do
not block the subsequent correct application of the statutes. The doctrine of estoppel
operates only against the taxpayer.

TAX ADMINISTRATION

The Bureau of Internal Revenue

4
That in all things God will be glorified! Rex B. Banggawan, CPA, MBA TAX 6 Batch HQ02
th
Northern CPAR: Taxation Taxes, Tax Laws and Tax Administration
The Bureau of Internal Revenue is tasked with tax administration function of the
government. Together with the Bureau of Customs, they are under the supervision and
control of the Department of Finance.

Chief Officials of the Bureau

1. 1 chief officer: The Commissioner of Internal Revenue
2. 4 assistant chief: Deputy Commissioners

Powers of the Bureau

1. Assessment and collection of taxes
2. Enforcement of all forfeitures, penalties, and fines and judgments in all cases decided
in its favor by the courts
3. Giving effects to and administering the supervisory and police powers conferred to it
by the NIRC and or other laws
4. Assignment of internal revenue officers and other employees to other duties
5. Provisions and distribution to proper officials of forms, receipts, certificates, stamps;
etc
6. Issuances of receipts and clearances
7. Submit annual report, pertinent information to Congress and reports to the
Congressional Oversight Committee in matters of taxation

Powers of the Commissioner of Internal Revenue*

1. To interpret the provisions of the NIRC (subject to review by the Secretary of Finance)
2. To decide tax cases (subject to the exclusive appellate jurisdiction of the Court of Tax
Appeals)
3. To obtain information and to summon, examine and take testimony of persons to effect
tax collection
4. To make assessment and prescribe additional requirement for tax administration and
enforcement
5. To make or amend a return for and in behalf of a taxpayer; or to disregard one filed by
the taxpayer
6. To change a tax period
7. To compromise a tax liabilities of taxpayers
8. To conduct inventory surveillance
9. To prescribe presumptive gross sales or receipts
10.To prescribe real estate values
The CIR is authorized to divide the Philippines into zones or areas and determine the
fair market value of the real properties located in each zones or area.
11.To accredit tax agents
Individuals or general professional partnerships who have been denied their
accreditation may appeal to the Secretary of Finance who shall act on the appeal
within 60 days from the receipt of such appeal. Failure by him to rule on the appeal
within the prescribed period shall be deemed approval of the application for
accreditation.
12.To inquire into bank deposits under certain cases
13.To prescribe additional procedures or documentary requirements
14.To delegate his powers to any subordinate officer with rank equivalent to a division
chief of an office
15.To refund or credit internal revenue taxes
16.To abate or cancel tax liabilities in certain cases
17.To examine tax returns and determine tax due thereon;
18.To cause revenue officers and employees to make a canvass from time to time of any
revenue district or region concerning taxpayers.

Powers of the CIR that cannot be delegated*

1. The power to recommend the promulgation of rules and regulations to the Secretary
of Finance.
2. The power to issue rulings of first impression or to reverse, revoke or modify any
existing rulings of the Bureau.
3. The power to compromise or abate any tax liability (Note: to be discussed in tax
remedies)
Exception: Compromise by Regional Evaluation Boards under the following requisites:
a. assessments are issued by the regional offices involving basic deficiency tax of
P500,000.00, and

5
That in all things God will be glorified! Rex B. Banggawan, CPA, MBA TAX 6 Batch HQ02
th
Northern CPAR: Taxation Taxes, Tax Laws and Tax Administration
b. involves minor criminal violations as may be determined by rules and regulations
to be promulgated by the Secretary of Finance, upon recommendation of the CIR,
discovered by regional and district officials
4. The power to assign and reassign internal revenue officers to establishment where
articles subject to excise tax are produced or kept. Revenue officers assigned to any
such establishments shall in no case stay in his assignment for more than 2 years.
Rules in assignments to other duties
Revenue officers assigned to perform assessment and collection function shall not remain
in the same assignment for more than 3 years. Assignment of internal revenue officers
and employees of the Bureau to special duties shall not exceed 1 year.
Agents and Deputies for Collection of National Internal Revenue Taxes
1. The Commissioner of Customs and his subordinates with respect to collection of
national internal revenue taxes on imported goods.
2. The head of appropriate government offices and his subordinates with respect to the
collection of energy tax.
3. Banks duly accredited by the Commissioner with respect to receipts of payments of
internal revenue taxes authorized to the made thru banks.

Exam Drill Problem:

1. In case of doubt of exemption, doubt shall be resolved
a. Strictly against the government c. Liberally in favor of the taxpayer
b. Strictly against the courts d. Liberally in favor of the
government

2. When the provision of the law is vague as to the taxation of a tax object, doubt is
resolved
a. Strictly against the government c. Liberally in favor of the government
b. Strictly against the taxpayer d. Liberally in favor of the courts

3. Upon taxation depends the governments ability to serve the people for whose benefit
taxes are collected, hence, taxes may be imposed even in the absence of constitutional
grants and collection of taxes cannot be stopped
a. Necessity theory c. Ability to pay theory
b. Benefit received theory d. Lifeblood theory

4. Which is not a manifestation of the lifeblood theory?

a. No injunction to enjoin tax collection. c. Imposition of tax even in the absence of
constitutional grant.
b. Equal protection of the law. d. Right to select objects and subjects of
taxation.

5. The doctrine of judicial non-interference is anchored on the

a. Marshall doctrine c. Complete separation of the State and religion
b. Holmes doctrine d. Lifeblood theory

6. Which is not a general characteristic of tax?

a. Based on contract c. Payable in money
b. Assignable d. Optional

7. This principle of a sound tax system is violated when the government incurs a deficit
a. Theoretical justice c. Administrative feasibility
b. Fiscal adequacy d. All of these

8. The e-filing of tax returns and e-payment system are manifestations of

a. Theoretical justice c. Administrative feasibility
b. Fiscal adequacy d. All of these

9. The progressive system of taxation is consistent with which principle of a sound tax
system
a. Theoretical justice c. Administrative feasibility
b. Fiscal adequacy d. All of these

10.A tax reform at any given time underscores the fact that:
a. taxation is inherent power of the State. c. taxation is a very broad power of
the State.
6
That in all things God will be glorified! Rex B. Banggawan, CPA, MBA TAX 6 Batch HQ02
th
Northern CPAR: Taxation Taxes, Tax Laws and Tax Administration
b. essentially a legislative power. d. the State can and should adopt
progressive taxation.

11.Which is not a factor that determines the situs of taxation?

a. Classification of the tax c. Residence of the taxpayer
b. Citizenship of the taxpayer d. Government agencies in charged with the
collection

12.Which is not a principle of sound tax system?

a. It should be capable of being effectively enforced.
b. Progressive tax should be levied.
c. Taxes must be sufficient to meet government expenditures and public needs.
d. It should be exercised to promote public welfare.
13.Which is an incorrect application of situs of taxation?
a. Persons are subject to tax at their place of residence.
b. Businesses are subject to tax where they conducts business.
c. Intangible properties are subject to tax where they are physically located.
d. Transfers are subject to tax depending on the residence, citizenship and location of
the property transferred.

14.Double taxation is regarded as highly objectionable. The following, except one, can
mitigate the impact of double taxation. Choose the exception.
a. Tax exemption of the income already subjected to income tax
b. Tax credit for taxpayers who already paid taxes to other tax jurisdictions
c. Reciprocity provisions between tax laws of taxing jurisdictions
d. Tax minimization schemes that would lessen the impact of levy.

15.Which statement is incorrect?

a. When there is a close degree of proximity between the tax subject and the taxing
jurisdiction taxation can extend beyond the territorial jurisdiction of the taxing
jurisdiction.
b. The receipt of benefit from the existence of the government is conclusively
presumed.
c. Most of the benefits from the operation of the government are realized indirectly.
d. There should be direct and proximate benefit received from a government before
taxation could be exercised.

16.Which of the following distinguishes tax from license?

a. A regulatory measure c. Non-payment does not render the
business illegal
b. Imposed in the exercise of police power d. Limited to cover the cost of
regulation

17.Tax distinguished from license

a. Imposed for regulation c. Unlimited to the amount that may be
imposed
b. Involves exercise of police power d. Imposed through the provisions of
the constitution

18.Equality in taxation denotes the use of

a. Proportional taxation c. Mixed taxation
b. Progressive taxation d. Digressive taxation

19.The basic community tax of P5.00 per individual is an example of

a. Specific tax c. Special or regulatory tax
b. Ad valorem tax d. Revenue tax

20.The additional community tax is an example of

a. Specific tax c. National tax
b. Ad valorem tax d. Progressive tax

21.Business taxes such as percentage tax and value added tax are
a. Specific tax c. Indirect tax
b. Direct tax d. Local tax

7
That in all things God will be glorified! Rex B. Banggawan, CPA, MBA TAX 6 Batch HQ02
th
Northern CPAR: Taxation Taxes, Tax Laws and Tax Administration
22.The state has complete discretion on the amount to be imposed, after distinguishing
between useful and non-useful activity. This statement denotes
a. License c. License fee
b. Toll d. Customs duty

23.Which statement is incorrect?

a. Special assessment is exceptional in operation.
b. The amount of toll is dependent upon the value of the property.
c. Special assessment is a tax.
d. Customs duty is a tax.

24.There can be a classification of the subject matter being required to shoulder the
burden. Which is the exception?
a. Tax c. Toll
b. License fee d. Eminent domain

25.Which is an indirect tax?

a. Community tax c. Income tax
b. Transfer tax d. Business tax

26.All funds derived by the government

a. Income c. Gains
b. Revenue d. Appropriations

27.Which is not an application of the progressive scheme of taxation?

a. Individual income tax c. Estate tax
b. Donors tax with relatives d. Capital gains tax

28.Which is incorrect?
a. The tax code shall prevail over generally accepted accounting standards/PFRs.
b. Tax treaties can prevail over the tax code.
c. Obligation arising from law is not presumed. There should be clear and express
constitutional grant of power before taxation, police power and eminent domain
could be exercised.
d. A tax system which is dominantly characterized by indirect taxes is referred to as a
regressive tax system.

29.A tax system which is not directly practiced in the Philippines

a. Proportional tax c. Regressive tax
b. Mixed tax d. Progressive tax

30.Based on the provisions of the tax code, the Constitutional guarantee of progressive
taxation is applied only to
a. Individual taxpayers c. Both individuals and corporate taxpayers
b. Corporate taxpayers d. Citizens of the Philippines

31.The following, except one, are exceptions to the rule that tax exemptions must be
strictly construed.
a. Where the statute granting the exemption provides for liberal interpretation
thereof.
b. The taxpayer does not fall within the purview of exception by clear legislative
intent.
c. Case of special taxes relating to special cases and affecting only special classes of
persons.
d. Exemptions refer to public property.

32.Which is a least principle of a sound tax system?

a. Consistency with economic objectives c. Administrative feasibility
b. Theoretical justice d. Fiscal adequacy

33.The fundamental rule in taxation that the property of one county may not be taxed by
another country is known as
a. International law c. Reciprocity
b. International comity d. International limitation

8
That in all things God will be glorified! Rex B. Banggawan, CPA, MBA TAX 6 Batch HQ02
th
Northern CPAR: Taxation Taxes, Tax Laws and Tax Administration
34.The City of Manila, claiming that it can impose taxes under the Local Government
Code, imposed a tax on banks (in addition to percentage tax on banks imposed in the
National Internal Revenue Code). The banks within the City of Manila objected for the
various reasons given below. Which would justify the objection of the banks?
a. The power of taxation cannot be delegated c. Uniformity in taxation
b. The rule of double taxation d. None of these

35.Some franchise holders who are paying the franchise tax are being required by an
amendatory law to pay the value-added tax, while others remain subject to franchise
tax. Which of the following provisions makes the law unconstitutional?
a. No law shall be passed impairing the obligations of contract
b. The rule of taxation shall be uniform
c. No person shall be deprived of property without due process of law
d. None of the above.

36.Which of the following cases constitute an objectionable double taxation?

a. A license fee and a tax imposed on the same business or occupation for selling the
same articles.
b. A tax imposed both on the occupation of fishing and fishpond operation.
c. A person engaged in leasing or selling real property are subject to income tax on
their income and their sales are also subject to 12% VAT.
d. A tax of 1% is imposed for bank reserve deficiency while penalty of of 1% a day
is also imposed as consequence of such reserve deficiency.

37.A taxpayer who had gross receipts derived from business in the preceding year did
not declare it when he paid the poll tax. He paid only the basic and tax and did not
pay the additional community tax based on gross receipts. Will he be imprisoned?
a. No. No person shall be imprisoned for non-payment of poll tax.
b. Yes. This is a case of tax evasion. Tax evasion is a criminal offense.
c. No. Paying the basic poll tax is enough. The additional poll tax is discretionary.
d. Yes. Non-payment of poll tax is punishable by imprisonment.

38.All forms of tax exemptions can be revoked except tax exemption based on
I. Constitution II. Contract III. Law
a. I only c. I and II only
b. II only d. I, II and III
39.License fee levied on the sale of bibles and other religious literature is violative of
a. Non-infringement of religious freedom
b. No appropriation for religious purposes
c. Exemption of religious, charitable or educational entities, non-profit cemeteries
and churches from property taxation.
d. Exemption of revenues and assets of non-stock, non-profit educational institution
and donations for educational purpose from taxes and duties.

40.The test of exemption of real properties owned by religious or charitable entities from
real property taxes is
a. Usage c. Location
b. Ownership d. Either ownership or location

41.A person made several misrepresentations in securing a loan despite his clear
inability to repay the same. When he defaulted, the creditor filed for legal action. Can
he be imprisoned?
a. No. Non-payment of debt would not lead to imprisonment.
b. Yes. This is estafa, a criminal offense subject to imprisonment.
c. No. Non-payment of debt is a civil, rather than a criminal case.
d. Yes. One can be imprisoned for non-payment of tax.

42.Which of the following is not legally tenable in refusing to pay a tax imposition?
a. Violation of taxpayers right of due process of law.
b. The taxing authority has no tax jurisdiction.
c. The prescriptive period of assessment has elapsed.
d. That there is no benefit that can be derived from the tax.

43.A law was passed by Congress which granted tax amnesty to those who have no paid
income tax for a certain year without at the same time providing for the refund of
taxes to whose who have already paid them. The law is:
9
That in all things God will be glorified! Rex B. Banggawan, CPA, MBA TAX 6 Batch HQ02
th
Northern CPAR: Taxation Taxes, Tax Laws and Tax Administration
a. Valid because there is a valid classification.
b. Not valid because those who did not pay their taxes are favored over those who
have paid their taxes.
c. Valid because it was Congress who passed the law and it did not improperly
delegate the power to tax.
d. Not valid because only the President with the approval of Congress may grant
amnesty.

44.Which statement is correct?

a. Tax amnesty is an immunity from all criminal, civil and administrative liabilities
arising from nonpayment of taxes.
b. Tax exemption is an immunity from civil liability only. It is an immunity or privilege,
a freedom from a charge or burden to which others are subjected to.
c. Tax amnesty applies only to past tax periods, hence of retroactive application,
while tax exemption has prospective application.
d. All of the above.

45.Which is not a source of tax law?

a. Judicial decisions c. Local ordinances
b. Opinion of tax authors d. BIR rulings

46.Formal pronouncement intended to clarify or explain the tax law and carry into effect
its general provisions by providing details of administration and procedure.
a. BIR Ruling c. Opinions of the Secretary of Finance
b. Revenue regulation d. Revenue Memorandum Circular

47.Which of the following powers of the CIR can be delegated?

a. The power to recommend the promulgation of rules and regulation to the
Secretary of Finance
b. The power to issue rulings of first impression or to reverse, revoke or modify any
existing rulings of the Bureau.
c. The power to compromise or abate any tax liability.
d. The power to divide the Philippines into zones for purposes of enforcement of
national internal revenue taxes.

48.Which agency, office or bureau issues revenue regulations?

a. Congress c. Commissioner of Internal Revenue
b. Secretary of Finance d. Revenue District Officer

49.Which is correct regarding the chief officials of the Bureau of Internal Revenue?
a. 1 Commissioner and 5 Deputy Commissioners c. 1 Commissioner and 4
Deputy Commissioners
b. 4 Commissioners and 1 Deputy Commissioner d. 2 Commissioner and 8
Deputy Commissioners

--- End of Handouts ---

10
That in all things God will be glorified! Rex B. Banggawan, CPA, MBA TAX 6 Batch HQ02
th