Professional Documents
Culture Documents
GOVERNMENT
ADMIN
TAX LIEN
DISTRAINT
LEVY
COMPROMISE &
ABATEMENT
FORFEITURE
SUSPENSION OF
BUSINESS
OPERATIONS
PENALTIES & FINES
REMEDIES
PROTEST
COMPROMISE &
ABATEMENT
TAX REFUND OR
CREDIT
TAXPAYER
JUDICIAL
ASSESSMENT
The term assessment may refer to:
The official action of an administrative officer in
determining the amount of tax due from a taxpayer
A notice to the effect that the amount therein stated
is due from the taxpayer as a tax with a demand for
payment of the tax or deficiency stated therein.
Discretionary (MERALCO SECURITIES CORP V. SAVELLANO [ OCTOBER 23, 1982])
ASSESSMENT
Self Assessment (Sec. 56[a])
No intervention from BIR
Jeopardy Assessment
No Audit/Investigation
Reasonable belief that assessment and collection will be
jeopardized by delay
DELINQUENCY V DEFICIENCY
a. Deficiency - amount still due and collectible from
ASSESSMENT
METHODS USED FOR INCOME DETERMINATION
Percentage Method- ratio analysis of percentages
Net worth method theory as to the income increase
Bank deposit method- analysis of bank records
Cash expenditure method- excess over expenditures
Unit and value method- gross receipts computation
Third party information or access to records method
Surveillance and assessment method (RAMO- No. 01-2000, XIII)
ASSESSMENT
Modes of Serving Notices:
Personal service (delivery to known address);
Substituted service (leaving notice with someone at
ASSESSMENT PROCESS
PROTEST
ASSESSMENT PROCESS
LETTER OF AUTHORITY (LA)
Letter request to conduct examination/
verification of books and record
Contains
Name of RO
Tax types and taxable period covered
Audit basis
Notation that taxpayer is requested to
verify the validity of such
PROTEST
ASSESSMENT PROCESS
AUDIT; failure to Complete
Continues without the need to
revalidated the LA; officer
concerned shall be subject to
admin sanctions
ASSESSMENT PROCES
PRELIMINARY ASSESSMENT NOTICE
(PAN)
Issued to inform taxpayer of the findings
of the audit
Service to taxpayer
Assessment conducted was valid
under a LA
In writing containing facts and law on
which the assessment was made
Issued by the CIR/ RRD and
authorized representatives
ASSESSMENT PROCESS
FLD/FAN
NOA constituting a computation of deficiency taxes and
a demand
It must be issued within the prescriptive period of
assessment
It must protested by the taxpayer
ASSESSMENT
REQUISITES of FLD/FAN
Issued after a valid PAN (except when PAN is not required)
Issued by the CIR / duly authorized representative
Service to taxpayer
Within the prescribed period for making assessments
Failure to comply; void assessment
In writing containing facts and law n which assessment was
based
Assessment was validly conducted under a valid LA
ASSESSMENT
PRESCRIPTIVE PERIOD TO ASSESS
General Rule: The governments right to assess
ASSESSMENT
Exceptions: Section 222, Tax Code
instances
False return
Fraudulent return
Failure to file a return
In such cases, the tax may be assessed or a proceeding in court
PRESCRIPTIVE PERIOD
ASSESSMENT VS. COLLECTION
Regular Return was made
False, Fraudulent, or
Failure to File a Return
Assessment
3 years
Collection
COLLECTION
The actual effort exerted by the government to effect
COLLECTION
No court shall have the authority to grant n
REMEDIES OF THE
GOVERNMENT
OUTLINE
REMEDIES OF THE GOVERNMENT
TAX LIEN
DISTRAINT
LEVY
FORFEITURE
SUSPENSION OF BUSINESS OPERATIONS
PENALTIES & FINES
ABATEMENT & COMPROMISE
TAX LIEN
DEFINITION
It is a legal claim or charge on property, real or personal,
PREDICATION
on a tax lien
versus
Private Individual
on a judgment
TAX LIEN
PERSONAL PROPERTIES
Demandability
REAL PROPERTIES
Registration
With Register of Deeds
DISTRAINT
The seizure by the government of
DISTRAINT
ACTUAL
Resorted to when at the time required for payment, a
officer
GARNISHMENT
The taking of personal properties usually
CONSTRUCTIVE DISTRAINT
WHEN TO ISSUE CD
1. Delinquent taxpayer
2. Taxpayer is retiring from any business subject to tax
3. Taxpayer is intending to leave the Philippines
4. Taxpayer is intending to remove his property therefrom
5. Taxpayer is intending to hide or conceal his property
6. Taxpayer is intending to perform any act tending to
CD; PROCEDURE
OBLIGATIONS
Sign Receipt
of property
description
TAXPAYER/
POSSESSOR
Preserve
No alienation
Taxpayer/
Possessor
REFUSAL/FAILURE
TO SIGN
REVENUE
OFFICER
Prepare list
Leave a copy
2 witnesses
LEVY
A levy refers to the seizure of real properties
DISTRAINT
LEVY
AS TO PROPERTIES COVERED
Personal
Real
HOW EFFECTED
Seizure;
goods, chattels or effects
Writing;
authenticated certificate;
description of the property
written notice;
Mailing or Service thereof;
Upon ROD and taxpayer
DISTRAINT
LEVY
NOTICE OF SALE
Notice;
Exhibition -2 public places
YES
END
NEXT
FORFEITURE
Tax lien
In default/ offense
Excess of proceeds of
sale goes to the taxpayer
All proceeds go to
government coffers
tobacco and all apparatus used in or about the illicit production of such
articles if sale/consumption of the same is injurious to public health of
prejudicial to the enforcement of the law( Sec 262,TAX CODE)
SOLD/DESTROYED
All other articles subject to excise tax; violation of NIRC; CIR-Discretion
(Sec 268[B], Tax Code)
SURCHARGE
25% SURCHARGE
Failure to file any return and pay the tax due thereon;
Unless otherwise authorized by the CIR, filing a return an
internal revenue officer other than with whom the return is
required to be filed;
Failure to pay the deficiency tax within the time prescribed
for its payment in the notice of assessment; or
Failure to pay the full or part of the amount of tax shown on
any return required to be filed, or the full amount of tax due
for which no return is required to be filed, on or before the
date prescribed for payment (Sec. 248(A), NIRC
SURCHARGE
50% SURCHARGE
In case of willful neglect to file the return within the
OUTLINE
REMEDIES OF THE TAXPAYER
PROTEST
COMPROMISE AND ABATEMENT
REFUND or CREDIT
PROTEST
PROTEST
PROTEST
Request for Reconsideration
refers to a plea for reevaluation of an assessment on the
CONTENTS OF PROTEST
COMPROMISE
Compromise- to reduce the amount of tax payable
Grounds for a compromise:
Doubtful validity of the assessment
Financial incapacity
of installment payments
COMPROMISE
Limits of the Commissioners power to
compromise:
(1) For cases of financial incapacity: a minimum
compromise rate equivalent to ten percent (10%) of
the basic assessed tax
(2) For other cases: a minimum compromise rate
equivalent to forty percent (40%) of the basic
assessed tax
COMPROMISE
Note: When the basic tax involved exceeds One
ABATEMENT
An abatement is a diminution or
ABATEMENT
THE GROUNDS FOR ABATEMENT
COMPROMISE V ABATEMENT
A compromise is marked by mutual concessions,
TABLE OF COMPARISON OF
REMEDIES