TAXPAYER'S REMEDIES

The Assessment Cycle

1. Incur Tax Liability
2. Filing of Return
3. Pre-Audit Investigation
4. Audit
5. Informal Conference (IC)
6. Preliminary Assessment Notice (PAN)
7. Reply to PAN
8. Final Assessment Notice (FAN)
9. Protest
10. Supplemental Protest
11. Decision on Protest
12. Petition for Review in CTA Division
13. Appeal to CTA en banc
14. Appeal to SC
The Assessment Cycle
1. Incur Tax Liability
National taxes
Taxable period: per transaction, monthly, quarterly, annually
2. Filing of Return
Doctrine of Imprescriptibility. - Taxes are imprescriptible as they are the
lifeblood of the government.
Exception to the Doctrine of Imprescriptibility. - However, tax
statutes may provide for statute of limitations.
Exception to the Exception. - Although the NIRC provides
for the limitation in the assessment and collection of taxes
imposed, such prescriptive period will only be applicable to
those taxes that were returnable. The prescriptive period
shall start from the time the taxpayer files the tax return and
declares his liability. (Collector v. Bisaya Land
Transportaion Co., 1958)
"Pay-as-you-file" system
Exception: "installment" payment
Income tax is in excess of P2,000
Taxpayer is not a corporation

Option to pay in 2 installments

1st installment: upon filing
2nd installment: on or before July 15 following the
close of the calendar year
"Self-assessment" rule
When is assessment required to establish tax liability?
GENERAL RULES:
1. Taxes are self-assessing, i.e. assessment is not required to
establish tax liability
2. If discrepancy is on the face of the return (i.e. tax paid < tax
due), assessment is also not required
EXCEPTIONS:
1. Improperly Accumulated Earnings Tax
2. When taxable period of taxpayer is terminated
Retirement from business
Intent to leave the Philippines
Intent to hide/conceal/remove property from the
Philippines
Act tending to obstruct proceedings for the collection
of taxes
3. In case of deficiency tax liability
arising from a tax audit
4. Tax lien
5. Dissolving corporation
Delinquency vs. Deficiency
PNOC
Where to file?
Large Taxpayer: eFPS
Non-Large Taxpayer: RDO of principal place of business
Individual Self-Employed: RDO of principal place of business
Individual Employee: RDO of place of residence or employment
Real Property Transaction: RDO of location of real property
When to file?
Per transaction
CGT
Monthly
OPT
DST

VAT (declaration)
Creditable Withholding Tax
Quarterly
VAT (return)
Annually
ITR
Amendment of Return
Conditions:
1. No withdrawal of return allowed
2. Within 3 years from date of filing
3. No notice of audit has been served
CAVEAT: "Substantial Amendment"
Resets prescriptive period
When substantial?
Amount underdeclared: 30%
Amount overstated: 30%
3. Pre-Audit Investigation
Fishing Expedition?
Search Warrants
Subpoena Duces Tecum
Power to ascertain the correctness of the return
Power to make / amend the return
1. Failure to file return
2. Willful non-filing of return
3. Filing of fraudulent return
Power to prescribe the amount of tax base
e.g. gross sales and receipts
e.g. real property values
Use of "Best Evidence Obtainable"
Data, record, papers, documents, or any evidence
Sources: government, corporations, employees, clients,
patients, tenants, lessees, vendees, and from all other
sources
When available:
1. Return is false / erroneous
2. Return is incomplete
3. No return is filed
4. Failure to substantiate: deductions, exemptions,

credits claimed
5. Failure to submit documentary support
Inventory-taking
Surveillance
Limited power to inquire into bank accounts/deposits
"Bank Secrecy Law"
GENERAL RULE: BIR cannot inquire into bank deposits of
taxpayers
EXCEPTIONS:
1. To determine gross estate of decedent
2. Compromise based on financial incapacity of
taxpayer
Waiver of bank secrecy privilege is
required
3. RA 10021 (Exchange of Information Act)
Applicable in tax treaties
Request of a treaty country to obtain
information held by banks and financial
institutions
Request for Financial
Information
Authorizing BIR to use information for:
Tax assessment
Verification
Audit
Enforcement
ITR of specific taxpayers
Order of the President of the
Republic
Treated as confidential information
Notice to Taxpayer
A taxpayer may be left in the dark
as to the existence of a request
for financial information made by
a foreign tax authority
Default period prior to
notification: 60 days
Discretionary period (if

notification undermines chances

of success of investigation):
maximum of 6 months
Penalty for refusal: fine or 2-5 years
imprisonment
Examine documents relevant and material to inquiry
Summon persons
Production of documents
Pacquiao case: BIR subpoenaed him to produce tax
returns filed with the US Internal Revenue Service
Power to take testimony under oath
Canvass revenue district
CONSTRUCTIVE METHODS OF INCOME DETERMINATION (if
taxpayer's records/methods are not reflective of true income)
Net Worth Method
Cash Expenditure Method
e.g. Napoles tax evasion case: BIR used the expenditure
method against the accused, by arguing that Napoles
purchased real property, motor vehicles and other
investments that exceeded their declared incomes (ITRs)
during the mentioned periods.
e.g. James Tiu tax investigation:
COMELEC campaign contribution
Candidates' statements of contributions and
expenses
Downpayment for BMW
Sale of unlisted shares of stock
Payment of CGT
Percentage Method
Bank Deposit Method
Unit and Value Method
"Third Party Information" or "Access to Records" Method
Access Letter
Royale Business Club tax evasion case: variance in ITR
(P196 million) and income payments from BPI, Metrobank
and BDO (P780 million)
Surveillance and Assessment Method
Such methods as in the opinion of the Commissioner clearly

reflects the income

4. Audit
Selection criteria
Targets of Audit
1. Mandatory Cases
Income tax: tax refund, tax credit, carry-over of
payments
VAT: refund, credit, excess input tax
Request for Tax Clearance: retirement and cessation
of business
Request for Tax Clearance: corporate
reorganizations (e.g. merger, consolidation, split-up,
spin-off)
2. Top Priority Taxpayers
Industry-based
3. Other Priority Taxpayers
"red flags"-based
4. RDO Discretion
Limit: total number of selected audit candidates may
not exceed 25% of total number of taxpayers to be
audited by the district office (other than mandatory
cases)
e.g. Audit of VAT
taxpayers whose VAT compliance is below the established
industry benchmarks;
taxpayers whose VAT returns for the succeeding quarters
show substantial decrease in tax payment;
taxpayers whose VAT returns reflect substantial input taxes
from importations and local purchases, such as when the
total purchases claimed exceed 75 percent of the total
sales.
Pacquiao case: The BIR started to investigate and audit
Pacquiao in late 2010 after an abrupt drop in his ranking among
the countrys top taxpayers
Random sampling
"Only 2,000 tax investigators"
e.g. professionals
AUDIT NOTICES

1. Letter of Authority (LA)

"White Paper"
informal invitation letter
When LA not needed:
1. Civil or criminal tax fraud
Tax fraud division of Enforcement Services
2. Policy cases under audit (RMO 36-99)
Special Teams in the National Office
Content:
1. Revenue officers authorized to conduct
UST case: a Letter of Authority was issued to
regional revenue officers. Subsequently, UST
was transferred to the Large Taxpayers
Service. Regional officers lost authority under
the LA. A new LA should have been granted.
Hence, LA is void. Consequently, assessment
is void.
2. Kinds of taxes
Each kind of tax has a separate filing due
date, and separate filing due dates mean
there are separate prescriptive periods
3. Period when tax was incurred
Business One vs. CIR: audit only covered
year 1998, but taxpayer was assessed a
deficiency for tax incurred in 1997. Why is this
valid?
4. Approving official
Period of service: 30 days from date of issuance
"Once per Year" Rule
GENERAL RULE: audit should be done only once
per taxable year.
EXCEPTIONS:
1. Fraud, irregularities, mistakes were committed
2. Request for reinvestigation or re-examination
3. Need to verify taxpayer's compliance with
withholding and other internal revenue taxes
4. Verification of CGT
5. Third party verification

Period of audit: double 120-day Rule

Original period (120 days)
Revalidation (another 120 days)
Only once if issued by RD
Twice if issued by CIR
"Place of business" rule
2. Tax Verification Notice (TVN)
3. Letter Notice (LN)
Inventory Methods for Income Determination
Last In First Out (LIFO)
First In First Out (FIFO)
Weighted Average
Specific Identification
5. Informal Conference
Notice of Informal Conference (NIC)
Reply to NIC: 15 days from date of receipt of NIC
Effect of failure to reply: is assessment executory? Not yet.
Examiner recommend only for PAN.
When NIC dispensable:
1. Deficiency tax results from mathematical error.
2. Discrepancy: withheld vs. remitted
3. Double refund or double tax credit
Claim in one quarter, carry over in another quarter
4. Excise tax due has not been paid
5. Violation of condition of tax-free importation
Findings of revenue officer
Sources of information
1. Returns filed
e.g. VAT return, Income Tax Return
2. Reports submitted by taxpayer
e.g. Summary List of Purchases, Summary List of
Sales
3. Books kept by taxpayer
e.g. journals, ledgers, financial statements
4. Third party sources
e.g. Pacquiao case: BIR estimated his tax
obligations for 2009 at P1.433 billion based on his
income in the United States from public information

on his bouts and shares from pay-per-view and

online ticket purchases, as well as endorsements.
e.g. Corona impeachment: alpha list of
compensation income, SALN, GCIS filed in SEC,
entries in the Registry of Deeds
e.g. Bayshore Chemical Importer: proprietor
underdeclared sales based on the Summary List of
Purchases submitted by his customers on local
purchases.
e.g. Siennalyn Gold Mining Corp.: the case
against the mining firm stemmed from a
denunciation letter informing the BIR of its alleged
perpetration of tax evasion schemes such as its
failure to register two addresses with the BIR and its
use of a fake Taxpayer Identification Number (TIN)
and financial statements.
Variances
Return vs. Return
Return vs. Books
Return vs. Reports submitted to BIR
Return vs. Third party sources
Books vs. Reports submitted to BIR
Books vs. Third party sources
etc.
What happens in Informal Conferences:
BIR presents findings
BIR presents sources of information
BIR may or may not sign findings
1st opportunity to explain (verbal)
Submit documentary evidence (optional)
Submit position paper (optional)
Request for 2nd Informal Conference
Request for re-examination/reinvestigation
Effect: suspends running of prescription
See if waiver of statute of limitations necessary
Alternative: jeopardy assessment
Informal Conference deleted (RR No. 18-2013): deleted the due
process requirement of providing an informal conference.

Rationale: quicker cash turnover & reduce the discretion on the

part of examiners
6. Preliminary Assessment Notice (PAN)
Letter from Regional District Officer (RDO)
2nd opportunity to explain (5 days)
Letter from Assessment Division Chief or Regional Director
3rd opportunity to explain (15 days)
Due process requirement
General rule: PAN is indispensable.
Exceptions: PAN is dispensable.
1. Deficiency tax results from mathematical error.
2. Discrepancy: withheld vs. remitted
2002 Bar Question: amounts actually remitted by a
security agency were lower than taxes withheld from
employees. Is PAN needed? (No)
3. Double refund or double tax credit
Claim in one quarter, carry over in another quarter
4. Excise tax due has not been paid
5. Violation of condition of tax-free importation
e.g. Exempt person imports vehicle, sells to nonexempt person
7. Reply to PAN
15 days from receipt of PAN
Extension allowed (not a right)
Effect of non-filing of reply: assessment is executory? Not yet. Only
enables RO to issue FAN.
8. Final Assessment Notice (FAN)
15 days from Reply to PAN (RR 18-2013)
Public criticism: The shortened period does not give the taxpayers
enough time to prepare his documents and arguments. More
importantly, it does not allow the BIR officers enough time to
consider and study the documents and arguments presented to
them. The short time renders the opportunity to respond and
protest the PAN meaningless.
The "assessment" proper
Written notice of tax liability
Demand Letter
Effects:

Legal obligation is created

Deficiency interest starts to run
Business of taxpayer does not become illegal
Contrast with: local business tax delinquency
Essential Requirements:
1. Antecedent steps are valid
LA
IC
PAN
2. Form of the FAN
Signed by Commissioner or authorized representatives
In writing
Sevilla vs. CIR: numerical figures are also
considered "in writing". Writing consists of: letters,
words, numbers, etc., in any form of data compilation
(including digital/electronic)
Statement of law
CIR vs. Enron: FAN failed to contain any legal basis
(NIRC, rules and regulations, jurisprudence). Hence,
void.
Statement of facts
Relate with following concepts:
Self-assessment
Burden of proof
Prima facie correctness of assessment
"Naked Assessment"
"Naked Assessment" (invalid)
Assessment without factual basis
CIR vs. Benipayo: presumption of
correctness of assessment cannot be made to
rest on another presumption.
Falcon Marketing vs. CIR: taxpayer's
accounting books and records were lost or
destroyed. The BIR made an assessment,
based on ESTIMATES, considering absence
of accounting records. Why didn't
"presumption of correctness of assessment"
apply?

CIR vs. Hantex: an assessment based on

mere photocopies of documents is invalid.
Why didn't "presumption of correctness of
assessment" apply?
CIR vs. Agrinurture: assessment of underdeclaration based on failure to declare
purchases. Purchases did not appear in
inventory or capital expenditures. BIR
conclusion: such undeclared purchase was
sold, resulting in un-reported income. SC:
assessment is invalid. There is income tax
when there is income, not when there is
purchase. Secondly, undeclared purchase is
not prohibited by law. What is prohibited is
overstatement of deductions.
"Jeopardy Assessment" (valid)
Assessment without benefit of complete
investigation/audit
Collection will be "jeopardized" because of
"delay" in assessment
Causes of "delay":
LACK OF COOPERATION. Taxpayer
does not want to present books of
accounts and records.
FAILURE TO SUBSTANTIATE.
Taxpayer fails to substantiate all or any
of the deductions, exemptions, or
credits claimed in his return
What is the "jeopardy" involved?
Impending expiration of prescriptive
period for assessment
Remedy: waiver of prescriptive period
What does taxpayer prefer: to receive a
jeopardy assessment, or to extend
prescriptive period for assessment?
3. Service
Personal delivery
Substituted service (RR No. 18-2013): PAN,

FLD/FAN, FDDA
Pacquiao case: FDDA was served in
Pacquiao's office in House of
Representatives. He was not around. It was
served to one of the staff. CTA treated it as
ineffective. Hence, 30-day period to appeal in
CTA did not lapse. Consequently, CTA still
has jurisdiction.
Registered mail
Basilan vs. CIR: the FAN was mailed within the
prescriptive period, but was received beyond the
period. Why is the assessment considered still within
the prescriptive period? (Presumption: regular
course of mail)
South Entertainment Gallery vs. CIR: the BIR
must prove that the taxpayer has indeed received
the FLD/FAN in cases wherein such document was
sent through registered mail and the taxpayer
directly denies receiving such mail.
Such presumption can be disputed, and that a
direct denial by the taxpayer that he received
the documents shifts the burden of proof of
receipt back to the BIR.
Barcelon vs. CIR: a direct denial of the receipt of
the mail shifts the burden of proof on the other party
favored by the presumption to prove that the mailed
letter was indeed received by the addressee
SVI Information vs. CIR: doctrines on Service of
FAN also apply to antecedent notices (e.g. PAN)
4. Prescription
Rationale for statute of limitations
NIRC periods
If tax return is filed
Not false or fraudulent
3 years from deadline for filing return, or
3 years from actual date of filing if
beyond the deadline for filing
2000 Bar Question: due date for

filing is April 15, 2005. Date of

actual filing is March 2005. FAN
was received in April 15, 2008. Is
this beyond the prescriptive
period? (No)
2002 Bar Question: due date for
filing is April 15, 1998. FAN was
received in April 20, 2001. Is this
beyond the prescriptive period?
(Yes)
Timing of filing:
e.g. creditable withholding tax:
monthly remittance return vs.
annual information return
False or fraudulent (10 years from discovery)
Aznar vs. CIR: distinguishes false
return vs. fraudulent return.
If tax return is not filed
10 years after date of discovery of omission to
file the return
Date of discovery must be within the 3-year
general prescriptive period
Butuan Sawmill vs. CTA: if a defective return
was filed, it is as if no return was filed. Hence,
the prescriptive period is 10 years, not 3
years, because there is already omission to
file the return.
Agreed periods
Extension of period for assessment
Subsequent extensions allowed, but must be
within the period of the prior extensions
Required in "Request for Reconsideration"
from the FAN
Waiver of prescription
1. Use of BIR Form
2. Signed by taxpayer
3. Signed by Commissioner or representative
DOLE Philippines case: Waivers were

not signed by the BIR commissioner or

her representative during the time that
the said waivers were executed on
various dates in 1989 through 1993.
Hence, the prescriptive period was not
validly extended. (P146 million tax
deficiency case)
4. Notarized
5. 3 copies
6. Indicate: expiration date
7. Execution: date of acceptance by BIR =
before expiration of prescriptive period
8. Renewal: Date of renewal of waiver = before
expiration of prior extension
Defective waiver
JGC Corporation Manila case: the first
waiver executed by the corporation was valid,
but the second waiver, which ostensibly was
executed to further extend the prescription
period beyond the period covered by the first
waiver, was not valid to effect the extension of
the prescriptive period.
Rules of counting:
Date of issue of FAN (irrelevant)
Date of service
Date of receipt
Date of mailing
"Last day" rule: Saturday, Sunday, legal holiday,
business day
Taxable year
Normal year (365 days)
Leap year (366 days)
Art. 13, Civil Code: 1 year = 365 days
Namarco vs. Tecson: if there is a leap year
within the prescriptive period, the 1,095th day
(365 days x 3 years) is the last day of
assessment
CIR vs. Primetown Property Group:

Sec. 31, Administrative Code of 1987

1 year = 12 calendar months
1 month = 30 days unless law refers to
a specific calendar month
Presumption: 360 days in one year
Reconcile: Namarco case vs. Primetown
case
Suspension of running of prescriptive period
1. Period when CIR is prohibited from making
assessment and beginning distraint or levy or
proceeding in court and 60 days thereafter
e.g. Republic vs. Ker: pending petition for
review in CTA from the decision on the
protested assessment
2. Taxpayer requests for reinvestigation
Waiver of suspension of period is required
Collector vs. Suyoc: The request alone will
not suspend the period. It should be
GRANTED by BIR.
3. Taxpayer cannot be located in address given by him
in the return filed
Except: taxpayer informs BIR of change of
address
CIR vs. BASF Coating: taxpayer changed
address without formally informing BIR. BIR
sent a FAN via registered mail, but it was
returned to sender (i.e. not received). BIR also
had communications with the taxpayer sent to
the new address.
4. Warrant of Distraint and Levy is duly served, and no
property could be located
Applies only for suspension of period to collect
5. Taxpayer is out of the Philippines
Substantial Amendment of Return
resets the prescriptive period
30% rule
Kinds of Assessments:
Original FAN

Follow-up or Collection Letter (after taxpayer denied receipt of

original FAN)
Demand Letter (erroneous refund)
Demand Letter (bouncing check)
Not considered assessment
e.g. Show-cause letter
e.g. Antecedent notices (e.g. PAN)
e.g. Incomplete FAN
e.g. Affidavit in support of criminal complaint
9. Protest
"Makes or breaks a tax case"
"The most crucial remedy"
30 days from receipt of FAN
Effect of failure to protest: FAN becomes executory
Meaning of "executory":
Appeal to CTA not available
BIR can start to collect (administratively or judicially)
Compromise of assessment is still possible
"Request for reconsideration"
Required: waiver of prescription
BPI vs. CIR: without the waiver, the prescriptive period will
not be tolled.
"Request for reinvestigation"
automatically tolls the statute of limitations
Content:
Statement of facts and law
Undisputed findings
Disputed findings
CIR vs. Isabela: a "disputed assessment" arises from the
filing and receipt of a protest, i.e. without a protest, there is
no disputed assessment, and without disputed
assessment, the CTA has no jurisdiction (note: the subject
matter jurisdiction of CTA includes "disputed assessments",
which is an exclusive appellate jurisdiction)
Jurisdictional requirement for judicial appeal
"Exhaustion of administrative remedies"
Premature invocation of court's intervention: The CTA threw
out a petition filed by Castalloy Technology Corp., Allied Industrial

Corp. and Alinsu Steel Foundry Corp., for lack of jurisdiction

because the said corporations did not file an administrative
protest against the FAN issued by the BIR Regional Office in
Cebu.
10. Supplemental Protest
60 days from date of filing of protest
Effect of non-filing: FAN becomes executory!
Content:
New or additional evidence
Standard Chartered Bank vs. CIR: taxpayer to submit
evidence which he feels is necessary to support his protest,
not what BIR feels should be submitted.
New or additional defenses
11. Decision on Protest
Administrative Appeal
30 days from date of receipt of decision on Protest
From Regional Director to BIR Commissioner
"Exhaustion of administrative remedies"
Oceanic vs. CIR: since the authority to make tax assessments
may be delegated to subordinate officers, assessment has same
force and effect if not revised or reviewed by CIR.
Final Decision on Disputed Assessment (FDDA)
Cancel assessment
Revise assessment
Direct Denial
Indirect Denial (any attempt to collect)
Formal and final letter of demand
Final Notice Before Seizure
Hilado vs. CIR: outright issuance of Warrant of Distraint and
Levy
BIR vs. Union Shipping: Filing of civil action by BIR
Period of appeal to start from receipt of summons
United International Pictures vs. CIR: preliminary collection
letter may serve as FAN
Referral to SOLGEN of case
Inaction by BIR Commissioner
180 days from filing of protest, or of supplemental protest (if
any)

12. Petition for Review in CTA Division

RCBC vs. CIR: 2 alternative options-- file Petition for Review (PR)
after lapse of 180 days from filing of protest if there is inaction, OR wait
for the FDDA and then file the PR within 30 days from receipt
Lascona case: the taxpayer cannot be prejudiced if the 180-day
period lapses, because he chose to wait for the final decision of
the BIR on the protest.
Relate with RMC 54-2014 (VAT refund) / ROHM Apollo vs. CIR:
the lapse of the 120-day period within which the BIR should
decide, without a decision on such claim, shall be deemed a
denial of the claim.
This means that the 30-day period to file with CTA shall
automatically run from the end of the 120-day period.
NO MORE OPTION TO WAIT FOR FINAL DECISION OF
BIR.
TMAP lobby for legislative amendment: In the past,
taxpayers claiming a refund normally wait for an actual
denial by the BIR before they actually file a case in court.
Now, it would then be necessary for the taxpayer claiming
the VAT refund to file a case before the Court of Tax
Appeals (CTA) within 30 days from the deemed denial of
the administrative claim to further pursue his claim for
refund.
Pending case by business associations: RMC 54-2014
provides for its retroactive application, which means that all
pending administrative claims for refund that have been
pending by more than the 120 plus 30 day-period would
then be deemed as final and unappealable.
Fishwealth Canning vs. CIR: a motion for reconsideration of the
denial of the Protest, filed in the BIR, does not toll the 30-day
period to appeal to the CTA.
Exclusivity rule (RR 18-2013): the remedy of filing a petition for
review with the Court of Tax Appeals bars the remedy of waiting
for the final decision of the Commissioner or his duly authorized
representative, which decision is subject to appeal to the CTA.
Basis of subject matter jurisdiction: exclusive appellate jurisdiction over
"disputed assessments"
Presumption of correctness of assessment

Motion for Reconsideration

15 days from date of receipt of CTA decision
13. Appeal to CTA en banc
15 days from CTA final order
14. Appeal to SC
15 days from CTA en banc final order
Collection of Deficiency Taxes
1. Administrative Remedies
1. Tax lien
2. Compromise and abatement
3. Distraint, levy or garnishment
4. Forfeiture
5. Sale
6. Penalties and fines
Surcharge
Interest
Compromise penalty
7. Tax clearance
e.g. Distribution of estate assets
8. Closure of business establishment
e.g. "Operation Kandado"
2. Judicial Remedies
1. Civil action
1. RTC or MTC
2. CTA
2. Criminal action
1. RTC
2. CTA
Summary of Taxpayer's Remedies
Before payment
Tax amnesty
DOLE Philippines case: P146 million tax deficiency (sales and
income tax) in 1986 covered by an application for tax amnesty in
2008.
Proposed Pacquiao tax amnesty: valid to class or individuals?
VAP or EVAP
Compromise
Available when:

1. A reasonable doubt to the validity of the claim exists

"Doubtful assessment"
"Jeopardy assessment"
"Naked assessment"
"Best evidence obtainable"
Prima facie correctness of an assessment
2. The financial position of the taxpayer demonstrates a clear
inability to pay the assessed tax.
Abatement
Tax exemption claim
Tax exemption certificate/ruling: all entities claiming taxexempt status under the Constitution and other laws should
renew their tax-exempt status with the BIR every three years.
(RMO No. 20-2013)
Background: religious, charitable, educational institutions
St. Paul College of Makati and CEAP case: BIR may
provide certain documentary requirements to prove
taxpayers' qualifications for tax exemption
Banks & withholding agents: Requiring banks and
withholding agents to demand a "valid, current and
subsisting" tax-exemption ruling from their payees. (RMC
No. 8-2014)
After payment
Tax credit
Refund
Carry over of excess payment
Tax Treaty Relief
Penn Philippines case: BIR cannot impose additional
requirements for the availment of privileges arising from a tax
treaty. The 15-day period within which the taxpayer must apply for
tax treaty relief is "not enforceable."
Sal Oppenheim Jr. & Cie Kommanditgesselshaft Auf Aktien
case: the taxpayer is a company which is a resident of Germany.
Hence, the dividend payment of PLDT to the taxpayer is subject
to the 15% preferential tax rate based on the gross amount of the
dividend, pursuant to the Philippines-Germany Tax Treaty. The
taxpayer overpaid its tax, then it filed a refund, but it was denied.
The BIR required prior approval of an application to avail of tax

privileges under a tax treaty. SC: the prior approval requirement is

not mandatory, invoking the doctrine of automatic
enforceability of tax treaties.
Adversarial:
To question legality of tax law
1. Original action:
Rule 63 (Concurrent original jurisdiction: RTC, CA, SC)
Rule 65 (Concurrent original jurisdiction: RTC, CA, SC)
2. Appeal:
Rule 45 (Exclusive appellate jurisdiction: SC)
To question legality of BIR rules or regulations
1. Original action:
Rule 63 (Concurrent original jurisdiction: RTC, CA, SC)
Rule 65 (Concurrent original jurisdiction: RTC, CA, SC)
2. Appeal:
Rule 45 (Exclusive appellate jurisdiction: SC)
To dispute assessment (substantive & procedural)
1. Administrative procedure
LA issuance
Audit
IC
PAN
FAN
Protest
Denial of Protest
Administrative appeal to CIR
2. Judicial appeal
CIR to CTA division
CTA division to CTA en banc
CTA en banc to SC