RED NOTES 2001-2002 MOST FREQUENTLY ASKED QUESTIONS IN TAXATION

SUBJECT
GENERAL PRINCIPLES
A. POWER OF TAXATION 1. NATURE OF THE POWER 2. 3. 4. 5. 6. LIFEBLOOD THEORY TAX VS. DEBT SITUS MOBILIA SEQUUNTUR PERSONAM COMPENSATION / SETOFF 1996 2000 1991 1992 1994 1992 1992 1996 1994 2000 1997 1996 1995 1996 1997 1996 1 1 1 1 2 1 1 1 1 1 1 1 1 1 1 1

INCLUSIVE YEAR

FREQUENC Y

TOTAL

2 1 1 2 1 2 2 1 1 1 2 1

7. DIRECT VS. INDIRECT TAX 8. IMPRESCRIPTIBILITY OF TAXES 9. TAXPAYERS SUIT 10. CONCURRENCE AND PREFERRENCE OF CREDIT B. DOUBLE TAXATION C. TAX EXEMPTIONS 1. STRICT CONSTRUCTION D. LIMITATIONS ON THE POWER OF TAXATION a. INHERENT 1. PUBLIC PURPOSE b. CONSTITUTIONAL 1. UNIFORMITY AND EQUALITY

1991 1991 1995 1998 2000 1992 2000 1992 1994 2000

1 1 1 1 1 1 2 2 1 1

2. NON-INFRINGEMENT OF CONTRACTS 3. ART. VI (28)(3) 4. POWER TO GRANT TAX EXEMPTIONS 5. NON-STOCK NONPROFIT EDUCATIONAL INSTITUTIONS E. TAX ENFORCEMENT AND ADMINISTRATION 1. ISSUANCE OF REV. REGS. 2. INSPECTION AND EXAMINATION OF TAXPAYERS BOOKS 3. REQUEST FOR REINVESTIGATION 4. INQUIRY ON TAXPAYERS BANK DEPOSITS 5. FRAUDULENT RETURN 6. FALSE RETURN 7. POWER TO COMPROMISE AND ABATE TAXES 8. DEFICIENCY ASSESSMENT 9. FRAUD SURCHARGE

4 1 2 2 2

1994 1995 1999 1992 1998 1999 2000 1996 1998 1996 1998 1996 1992 1995 1995

1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

2 1 1 3 2 2 1 2 1 1

TAXATION LAW

RED NOTES 2001-2002

10. DEFICIENCY INTEREST 11. TAX EVASION 12. TAX AVOIDANCE II. NATIONAL TAXATION A. IN GENERAL 1. GIFT VS. INCOME 2. TAX CONSEQUENCES OF A CONDONED DEBT B. INCOME TAXATION 1. BASIC FEATURES OF THE INCOME TAX SYSTEM 2. SYSTEMS OF INCOME TAXATION 3. CONCEPT OF INCOME 4. CONCEPT OF TAXABLE INCOME 5. INCOME VS. CAPITAL 6. SITUS 7. CONCEPT OF RESIDENCE 8. CONCEPT OF A PARTNERSHIP 9. TAX TREATMENT OF A NRC 10. TAX TREATMENT OF A DC 11. TAX TREATMENT OF NRA WHO STAYED IN THE COUNTRY FOR MORE THAN 180 DAYS 12. TAX BASE OF BRANCH PROFIT REMITTANCE 13. CAPITAL GAINS TAX 1995 1996 1998 1996 2000 1995 1995 1997 1 1 1 1 1 2 1 1 1 2 2 2 2

1996 1994 1997 1994 1997 1998 2000 1995 1991 1999 1991 1991 1994 1997 1997 1999 1997 2000

1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

1 2 3 1 1 2 1 3 2 1 1

14. CAPITAL ASSET 15. CONCEPT OF GROSS INCOME 16. DISGUISED DIVIDEND 17. COMPENSATION INCOME 18. FREE LIVING QUARTERS AND MEALS 19. TRANSPORTATION AND REPRESENTATION ALLOWANCE 20. RETIREMENT BENEFIT 21. PRIZES 22. INSURANCE PROCEEDS 23. ECOLA 24. RETIREMENT PAY 25. SEPARATION PAY 26. CHRISTMAS BONUS 27. GSIS PENSION 28. INTERESTS FROM TIME DEPOSIT 29. DAMAGES

1991 1992 1993 1997 1998 1995 1995 1994 1996 1997 1993 1995 1996 1994 1991 2000 2000 1991 1991 1995 1996 1994 1995 1996 1994 1994 2000 1994 1995

1 1 2 1 1 1 1 1 1 1 1 2 2 1 1 2 1 1 1 1 1 1 1 1 1 1 1 1 1

5 1 1 1 2 5 1 3 1 1 1 2 3 1 2 1 1 2

TAXATION LAW

RED NOTES 2001-2002

30. FINANCIAL ASSISTANCE TO A STRIKING UNION MEMBER 31. ALLOWABLE DEDUCTIONS IN GENERAL 32. DEDUCTIBILITY OF INTERESTS 33. BUSINESS EXPENSE 34. CHARITABLE CONTRIBUTIONS 35. LOSSES 36. DEPRECIATION 37. BAD DEBTS 38. WORTHLESS SECURITIES 39. PERSONAL AND ADDITIONAL EXEMPTIONS 40. WITHHOLDING TAX SYSTEM 1993 1993 1992 1999 1993 1993 1993 1998 1998 1999 1999 1999 1993 1997 1998 1993 1994 1997 1998 1999 1999 1998 1998 1 1 1 2 2 2 1 1 1 1 1 1 1 1 1 2 2 1 2 3 1 1 1 1 1 3 2 2 2 2 1 1 3

10 1 1 1

41. WHO BEARS THE BURDEN OF PAYING THE INCOME TAX DUE FROM THE ESTATE 42. SOURCES FROM WITHIN AND WITHOUT 43. CAPITAL GAINS VS. ORDINARY GAINS 44. CAPITAL GAINS TAX DEFERRAL OF PROCEEDS FROM SALE OF NATURAL PERSONS RESIDENCE USED TO BUILD ANOTHER RESIDENCE C. ESTATE TAX 1. DONATION INTER VIVOS (TAXABLE?) 2. INCLUSION IN THE GROSS ESTATE 3. CONCEPT OF VANISHING DEDUCTION 4. WITHDRAWAL OF BANK DEPOSITS 5. LEVY PENDING PROBATE PROCEEDINGS 6. ESTATE TAX IMPOSED ON A NONRESIDENT DECEDENT 7. DEDUCTIONS FROM GROSS ESTATE 8. WHERE AND WHEN ESTATE TAX RETURN FILED D. DONORS TAX 1. CONCEPT OF GIFT TAX

2000

1994 1994 1994 1992 1998 2000 2000 2000 1991 1992 1994 1996 2000 1995 1999 1994

1 1 2 1 1 1 1 1 1 1 1 1 1 1 1 1

1 1 2 1 1 1 1 1

2. CONCEPT OF STRANGER AS DONEE 3. TAX BASE 4. TAX BASE FOR LESS THAN FULL & ADEQUATE 5. DONATION TO A PARISH CHURCH 6. DONATION TO A NON-STOCK,

4 1 1 1 1

TAXATION LAW

RED NOTES 2001-2002

NON-PROFIT ORGANIZATION 7. DONATION TO A NON-STOCK, NON-PROFIT PRIVATE EDUCATIONAL INSTITUTION 8. DONATION TO A SPORTS ASSOCIATION 9. DONATION TO A MUNICIPALITY 10. DONATIONS TO AN ELECTION CANDIDATE E. EVAT 1. SALES TAX 2. ZERO-RATED TRANSACTIONS 3. PERSONS LIABLE 4. CHARACTERISTICS 5. EXEMPT TRANSACTIONS 6. TAXABILITY OF REAL PROPERTY 7. TRANSACTION DEEMED SALES III. A. LOCAL TAXATION 1. POWER OF LGUs TO IMPOSE TAX 2. PROCEDURE 3. REMEDIES 1996 2000 1996 1998 1998 1991 1991 1996 1996 1996 1997 1997 1991 1991 1991 1993 1997 1998 1993 2000 1991 1992 1997 2000 1991 1995 1997 1991 1994 1991 1992 1996 1991 1995 1995 1997 1996 1997 2000 2000 1 1 1 1 1 1 1 1 1 1 1 1 2 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 1

4 2 1 1 1 1 1 2 2 1 1 1 2 2 1 1 1 1

B. REAL PROPERTY TAXATION 1. FUNDAMENTAL UNDERLYING RPT 2. SPECIAL LEVY 3. PROCEDURE FOR DELINQUENCY SALE 4. REMEDIES 5. REALTY TAX ON IDLE OR VACANT LANDS IV. TARIFF AND CUSTOMS 1. TARIFF POWERS OF THE PRESIDENT 2. PROCEDURE IN SEIZURE PROCEEDINGS 3. POWER TO ISSUE WARRANT OF SEIZURE AND DETENTION 4. EFFECT OF PAYMENT ON SEIZURE AND DETENTION 5. SEIZURE OF VESSELS 6. POWER TO ISSUE INJUNCTION IN SEIZURE AND FORFEITURE PROCEEDINGS 7. CONCEPT OF IMPORTATION 8. SPECIAL CUSTOMS DUTIES 9. REMEDIES UNDER TCC vs. NIRC 10. REMEDIES OF AN IMPORTER 11. JURISDICTION OF CTA OVER CUSTOMS CASES, WHEN PROPER 12. NO CAUSE OF ACTION FOR REPLEVIN FILED IN THE RTC OVER SEIZED GOODS V. REMEDIES 1. JURISDICTION OF THE CTA

1991 1992

1 1 4

TAXATION LAW

RED NOTES 2001-2002

1997 1999 1991 1993 1996 1992 1992 2000 1992 2000 1991 1992 1993 2000 1992 1993 1994 1997 2000 1995 1996 1999 1998 1996 1998 2000 2000 2000 1996 1 2 1 1 1 1 1 1 1 1 1 1 1 1 2 1 1 1 2 1 1 1 1 1 2 1 1 1 1 5 3 1

2. NO INJUNCTION RULE 3. THEORY OF SUPERVENING EVENT RE: REFUND OF ERRONEOUSLY OR ILLEGALLY COLLECTED TAXES 4. ADMINISTRATIVE REMEDIES, IN GENERAL, WHEN PROPER 5. JUDICIAL REMEDIES, IN GENERAL, WHEN PROPER 6. ASSESSMENT (PERIOD)

2 2

7. TAX REFUND / CLAIM FOR TAX REFUND

8. DISTRAINT AND LEVY 9. PROTEST 10. GARNISHMENT PENDING PROTEST / APPEAL TO THE CTA 11. COMPROMISE 12. ABATEMENT 13. COMPROMISE PENALTY 14. REMEDIES UNDER NIRC vs. TCC

7 1 2 1

4 1 1 1

TAXATION LAW