Issue 1. Whether or not the Collector of Internal Revenue correctly disallowed the P75,000.

00 deduction claimed by private respondent Algue as legitimate business expenses in its income tax returns 2. Whether or not the appeal of the private respondent from the decision of the Collector of Internal Revenue was made on time and in accordance with law Rule 1. A. Fees are received by an employee from the employer for services rendered in the performance of their official duty over and above their regular salaries. They are a form of compensation. B. Commission is usually a percentage of total sales or on certain quota of sales volume attained as part of incentive. It is also a form of compensation. C. Incomes that are taxable for employees are expenses that are deductible for employers. D. Deduction from gross income: All the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business, including a reasonable allowance for salaries or other compensation for personal services actually rendered. E. Any amount paid in the form of compensation, but not in fact as the purchase price of services, is not deductible. 2. BIR Issues Formal Letter of Assessment Files protest w/n 30 days from receipt of assessment Submits proof w/n 60 days from filing of protest No supporting documents, assessment becomes final Denies taxpayers protest or ignores supporting documents w/n 180 days upon submission

Taxpayer

Appeals to CTA w/n 30 days from receipt of denial or from lapse of the 180-day period No appeal was made. BIR decision on tax assessment becomes final, executory and demandable Application 1. Part of the P126,000 commission, specifically P75,000, received by Algue from being an agent ofPhilippine Sugar Estate Development Company was distributed to certain individuals in the form of promotional fees for their services in the formation of the Vegetable Oil Investment Corporation. The P75,000 is a necessary expense for the development of the Vegetable Oil Investment Corporation. The P75,000 are reported as part of the taxable income by the recipients, therefore can be deducted by Algue.

Something about tama langung amount for the services? 2. The assessment on a domestic corporation was given on January 14, 1965 and Algue filed the protest 4 days later, which is January 18, 1965 and is stamped received on the same day by the petitioner. This means that 4 out of the 30-day rule is already taken. On March 12, 1965, a warrant of distraint and levy was presented however a search of the protest in the dockets of the case proved fruitless, thats why Algues party filed another copy to BIR agent Ramon Reyes, who deferred service of the warrant. This means the days that have past are not to be counted since the protest was nowhere to be found and the warrant was deferred. OR this means that the protest has been denied. Atty. Guevara Jr., on April 7, 1965, was finally informed that the BIR was not taking any action on the protest and it was only then that he accepted the warrant of distraint and levy. In addition to this, Algue filed a petition to CTA for review of the decision of the Commissioner of Internal Revenue on April 23,

1965. This means that another 16 days (Apr.7 to 23) out of the 30-day rule have been consumed. Or this means that another 42 days of the 30-day rule have been consumed so the filing of protest already passed its allowed duration. Conclusion 1. Since the amount of P75,000 are part of the taxable income of the individuals who received them then it should be deducted from the taxable income of Alguesince this amount is acquired from his total commission.

2. Since the protest was filed within 30 days from the receipt of denial, then it is made on time and in accordance with law. Only 20 days of the 30 days have been taken. The protest submitted by the respondent is valid even if the BIR has not received the documents.

OR There was no supporting document submitted by the domestic corporation so this means that the assessment becomes final. Also, the serving of warrant of distraint and levy by the petitioner means that the protest is denied. Thus leading to the protest being not made on time and in accordance with law.