MAY 15, 2015.

Philippine Journal Case

Contents of a valid waiver
1. Waiver must contain an expiration date in
order to avoid an unlimited span of
investigation which could lead to
unscrupulous acts of investigators.
2. RMO 20-90 provides that, if taxes exceed 1
Million, the waiver MUST be signed by the
Commissioner.
3. The reckoning period of the extension is the
date of acceptance. MUST be included in
the waiver.
4. The fact of receipt of the taxpayer must be
indicated in the original copy.

VOID Waiver; Effect: - It will not extend the period

to assess taxes.
In the case; since the waiver is void, the assessment
issued during the extended period is invalid.
Because it is made after the 3-year period to assess.
-The assessment being invalid, the warrant of
distraint and levy is also void. The government
cannot collect based on a void warrant of distraint
and levy.

date of acceptance was beyond the period.

The waiver is void. (Date of execution and
date of acceptance must be made within the
3-year period.

DOCTRINE OF ESTOPPEL
General Rule: The doctrine can be used against
the taxpayer.
Exception: When it pertains to the Statute of
Limitations involving assessments, especially
one where there exist a detailed procedure in the
preparation of the waiver.

In the case of Hudos: There was a detailed

procedure in the manner of preparing a waiver.
Such procedure has been prescribed primarily
because it intends to protect the rights of a
taxpayer. Thus, the doctrine of estoppel cannot
be applied.

The doctrine could have been applied if there is

a showing that taxpayer exerted efforts or
performed several acts which would lead to the
conclusion that the postponement of the
assessment was by reason of the acts conducted
by the taxpayer.

CIR vs. HUDOS

The waiver in the case has infirmities, because it
was signed by Pascos but the Board of Directors did
not authorize him.
The waiver must comply with RMO 20-90.
The requirements for a valid waiver:
1. Waiver must be signed by the taxpayer or
agent(THERE MUST BE A WRITTEN
AUTHORITY)
2. Date of acceptance must be indicated.
3. The Fact of Acceptance must be included.
4. If the taxes exceed 1 million pesos, it must
be signed by the Commissioner.
5. Date of Execution must be indicated.
6. If the date of execution is by the taxpayer
was made within the 3-year period, but the

RECITATION(I excluded the first two sablay)

of Vanessa:
Waiver must be accepted by the taxpayer, it
must include the period or expiration date,
signed by the taxpayer. CIR or RO must sign,
indicating such acceptance, and indicating the
date of acceptance.*Before acceptance, the
waiver must be reviewed by BIR.
Both date of execution of the waiver and the
acceptance must be indicated therein.
Waiver must be executed in 3 original copies. 1
attached in the case. 1 to the taxpayer. 1 to the
officer that would accept the waiver.

CIR VS. ENCARNACION.

Implied consent can never be presumed. The
execution of the waiver is not a unilateral act. It
is an agreement between the taxpayer and the
Commissioner. Waiver would only be valid if
both signature would appear on the face of the
waiver.

for the taxable quarter or quarters of the

succeeding taxable year.
4. When the excise tax due on excisable
articles has not been paid.
5. When an article locally purchased or
imported by an exempt person, such as, but
not limited to vehicles, capital equipment,
machineries and spare parts, has been sold,
trades or transferred to non-exempt persons.

Sec. 223 of Tax Code.

Instance where the period to assess will be
tolled or suspended.
1. During the period which the Commissioner
is prohibited from making an assessment.
2. During the period beginning distraint or levy
or any proceeding in court and for sixty days
thereafter.
3. IF the taxpayer filed a request for
reinvestigation WHICH was GRANTED
4. Taxpayer cannot be located in the address
given by him in the return for which the tax
has been assessed. EXCEPT if the taxpayer
informed the Commissioner of the change in
address.
5. The taxpayer is out of the Philippines
6. When there is a warrant of Distraint or levy
duly served upon the taxpayer and no
property can be located.

Case of Mengulto in relation with Metrostar.

The applicable ruling is the case of metrostar.

Governing principles involving assessment:

Case of CIR vs Gonzales and Pascor

Question: When do we reckon the period when

assessment has been made?
When the assessment has been released, mailed,
or sent to the taxpayer.

Question: IS the issuance of PAN mandatory?

Question: Is assessment necessary before

taxpayer can be prosecuted for violation of the
NIRC?

Yes, except in those enumerated in Sec. 228

No, as provided in the case of UNGAB.

1. When the finding of any deficiency tax is

the result of mathematical error in the
computation of the tax as appearing on the
face of the return
2. When a discrepancy has been determined
between the tax withheld and the amount
actually remitted by the withholding agent
3. When a taxpayer who opted to claim a
refund or tax credit of excess creditable
withholding tax for a taxable period was
determined to have carried over and
automatically applied the same amount
claimed against the estimated tax liabilities

UNGAB CASE The moment the taxpayer

filed a fraudulent return with intent to evade the
tax- that completes the crime.
-

If no assessment was issued by the CIR

but there appears to be a fraudulent
return by the taxpayer. And the intent to
evade tax is presumed because of the
under-declaration of more than 30%.
The assessment is no longer necessary.

Question: Can the procedures outlined in Sec. 208

be applied retroactively?

Yes, REYES CASE

CIR VS REYES.
General Rule: Laws are prospective in nature
Exception: 1. Statutes which are remedial in nature

1. Remedies available to taxpayers

2. Remedies available to the government
Doctrine of Exhaustion of Admin Remedy is
applicable. Before filing a petition before the CTA,
a protest should be first filed before the CIR

2. Statutes that does not create or take away vested

rights.

Requisites for a valid protest: RR 12-85

Section 208 in the case is provided as remedial in

nature.

Effect of Failure to protest- Assessment shall

become final and executory.
ALLIED BANKING CASE

RCBC CASE****
The waiver issued in the case is considered valid on
the ground of estoppel because RCBC paid the tax
partially.
Question: What is the doctrine of estoppel?
When a person who made a declaration, such act is
conclusive upon him when the same is relied upon
by someone else.
Compare RCBC with the case of Hudos.
In the case of Hudos, estoppel did not apply because
there is a detailed procedure on the manner on how
to execute a waiver. Hudos never performed any act
which would rule out good faith in its favour.
In RCBC, estoppel will apply because it filed a
request for reinvestigation which was granted.
There was an assessment conataining a reduced
amount of tax liability. Because of this, RCBC had
paid a portion of the tax. RCBC benefited from the
new issuance of the assessment. The Supreme Court
ruled that the partial payment indicated in the new
assessment is an implied admission on the part of
taxpayer with respect to the validity of the waiver.

Doctrine of estoppel: General Rule: will apply,

Exception: Statute of Limitations or execution of
waiver. EXCEPTION TO THE EXCEPTION: If
there are acts that would indicate that the taxpayer
benefited from the execution of the waiver.

TAX REMEDIES PROPER

IF An assessment issued to the petitioner indicated

FINAL DECISION the recourse of the taxpayer is
appeal the assessment to the CTA within 30 days.
In the case, petitioner filed a petition for review
before the CTA. CIR argued that there was a
violation of the Doctrine of Exhaustion of
Administrative Remedies. Petitioner should have
filed a protest before the CIR.
The SC ruled that: Since the language use and tenor
of that assessment is that it is already the final
decision of the CIR, and instead of using protest,
the CIR use the word Appeal. Then such act of the
CIR had led the taxpayer to believe that the
assessment is the final decision of the CIR. In which
case, the taxpayer should not be faulted because of
the fact that the CIR has been estopped by reason of
its acts.
CIR must indicate in clear and unequivocal manner
whether its action in a disputed assessment
constitutes its final decision. If the CIR does not
indicate it in an unequivocal manner and the
taxpayer was made to believe that such decision has
already been CIRs final decision, then any petition
filed before the CTA, notwithstanding the failure to
comply with the Doctrine of Exhaustion of
Administrative Remedies, will not be dismissed.
Question: What is the prescriptive period to collect
tax
3 years counted form the date of issuance of
assessment.

*Both issuance of assessment and receipt of warrant

of distraint and levy must be within the 3-year
prescriptive period.

SEATWORK/QUIZ
12/19/74 Issuance of Receipt of Notice of
Assessment
01/17/1975- Protest, BIR ordered review of the
documents
12/10/1979- FAN issued
1/2/80 Received by Taxpayer. No action filed
3/12/80- Warrant of distraint and levy

Failure of BIR to Act within the 180-day period.

Remedy:
1. Appeal to the CTA within 30 days from the
expiration of 180 days.
2. Await for the decision of the CIR. Appeal
within 30 days from receipt of the decision.

Problems:
3/27/98

Assessment Notice

4/20/98
3/3/99
4/12/99

Protest
Protest Denied
Elevated to CTA by
appeal

Question Rule on the legality of the warrant.

Answer: Warrant is valid. Only about 4 months has
been used, from the 5-year prescriptive period. The
review is a reinvestigation. This is the case of
Wyeth.

Was the appeal filed on time? No, 39 days. Appeal

was filed outside the 30 day period.

General Rule: 3 years within which to assess and

collect taxes

Filed beyond the 30 day period. Dismiss the appeal

for being filed outside the period.

Exception:

CTA cannot acquire jurisdiction over assessments

that has already acquired finality.

1.If there is a false or fraudulent return with intent

to evade tax

10/4/2010
6/10/2011

Protest
PFR with CTA

2. There is no return filed.

10/4/10
10/15/11
11/15/11

Government has 10 years to assess. If the

government has assessed based on this period, the
government has 5 years to collect the tax.

31 days, remember October has 31 days. Dismiss. It

should have been filed on 11/14/11

*IF taxpayer has signed a waiver, and there was an

assessment issued within the prescriptive period, the
government has 5 years to collect.
*5 years to collect will only apply if there has been
an assessment made in the 10 year period or during
the extended period.
*NOTE in Wyeth the prescriptive period to assess is
5 years.

10/4/10
6/30/11

7/30/12
8/30/12
9/1/12

Protest
Denied by CIR
PFR to CTA

Protest
Before
Decision
Taxpayer filed PFR to
CTA
CTA denied
CIR Denied protest
Taxpayer appealed the
decision
of
CIR
denying the protest.

Wyeth Ruling is the same in the Case of ATLAS

Dismiss, the decision is barred by res judicata.

*OPTIONS Of taxpayer are mutually exclusive.

Choice of one bars the application of the other.

The 180+30 days period is not mandatory remedy

of the Taxpayer, he can opt to wait for the decision
of the CIR.
The Supreme Court in the case of RCBC vs CIR
said that the option of the taxpayer is mutually
exclusive.
CIR VS UNION SHIPPING
12/27/74
1/4/75
1/10/75
1/13/75

Assessment
Received
Protest
Received by CIR

11/25/76
11/29/76
12/28/79
1/10/79

CIR issued Warrant of

Distraint and Levy
Received motion for
reinvestigation
CIR filed a collection
case
Petition for review

Question: Was the protest filed on time? Yes

Was the Warrant of Ditraint and Levy file on time?
Yes
Was the collection case filed on time? NO. CIR has
until 12/27/77 to file collection case.
The Supreme Court ruled that CIR should always
indicate to the taxpayer his decision over a
particular manner.