2016 TAX BAR QUESTION

1. Briefly explain the following doctrines: lifeblood doctrine, necessity theory, benefits received principle,
and doctrine of symbiotic relationship
- Doctrine of symbiotic relationship - reciprocal relation between State and people
2. Exclusive jurisdiction of CTA
3. Requisites for deductibility of bad debt - Valid existing debt, worthless, charged off within a taxable year,
charged off in full or not at all / written off/ cancelled as part of accounts receivable (partial writeoff not
allowed)
It is deductible because it is already worthless (Collector v. Goodrich)
4. Law can provide for power of LGU to tax on property. - exemption on rule for pre-emption?
Except in
those case where LGU is allowed by law to impose taxes imposed by National government, LGU cannot levy
those taxes.
(Something also to do with Capital Gains?)

5. Yes - see Air Canada - an airplane / airline company carrying a foreign flag with no landing rights if it sells
tickets in the PH. The activity is selling the tickets - income is derived in PH. therefore RFC.
6. Courtesy discounts are not realized income because it is relatively small value. (Fringe beneftis / de
minimis)
7. PNR is a government instrumentality and not a GOCC. Being a government instrumentality, its properties
are considered public dominion and are exempt from RPT under LGC
8. No, because there is no relinquishment of ownership as evidenced by the execution of the Deed of Trust
and Assignment of Rights
9. a. Requisites:
Claim for refund filed with CIR within 2 years counted from the last day of the quarter where
the zero-rated sale was made
Claim must include a statement under oath that the sale was zero-rated
CiR
was make a decision within 180 days from filing
No decision - deemed denial 
Appealable to CTA (within
30 days from lapse of 180 period or_____)
b. 
Written claim for refund within 2 years from date of payment

It must be a categorical demand for reimbursement of tax
A decision denying the claim is appealable with
30 days from receipt - provided that the decision is within 2 year period
(within 30 days or within 2 years
period, whichever comes first)
No decision is considered denial - appealed within 2 year period
10. Distinction between the tax credit and tax deduction
11. Buyer in good faith should be allowed to avail of the tax credit certificate
12. No, the City Assessor is not correct. The medical arts center building is an integral part of d hospital.
Thus, the correcr classification is SPECIAL and not COMMERCIAL. (Pls see City of Assessor of Cebu City vs
Asso of Benevola de Cebu, G. R. No. 152904, June 8, 2007.)
13. No, this is an effectively zero-rated sale of services. The exemption is with the buyer and should extend
to the seller because (di makapag-pass on to the seller). Since WHO is exempt from direct and indirect taxes
pursuant to an Agreement, the exemption should mean that the exemption should include the contractor.
The immunity extends to contractor as it is an effectively zero-rated sale pursuant to law… (CIR v. John
Gotangco, In)
14. Yes, the sale from Lucky to Rainer to HSC is prompted for the mitigation of the tax liabilities and should
constitute tax evasion. Outside of lawful means allowed by law (CIR v. Benigno Toda, Jr., 2004)
15. Qualify answer: If representation expenses should not go beyond .5% of net sales or actual cost,
whichever is lower
16. See operative fact doctrine. (Exemption to the Aichi rule)
Yes, API’s petition for review will prosper. The
petition for review falls within the exemption within the 120+30 day requirement. All claims for refund Oct.
6, 2003 until Aichi ruling must follow the BIR ruling
17. No, the waiver was executed after VVV was assessed for income taxes to justify the taxes assessed after
prescription has set in. A waiver executed beyond prescriptive period is ineffective (Republic v. Acevedo)
18. you’ll be entitled to claim rental expenses - seller 
also, at the time of sale, it was not used in business,
it is only subjected to 6% CGT and not on the income tax (32%)
rental income and expenses connected to
leasing the property- buyer
19. In all cases where properties where transfer and located in the PH is subject to tax irrespective of the
citizenship and residency. However, if Janina is a non-resident alien at the time of death, principle of
reciprocity must be followed, being that shares is an intangible property located in the philippines
20. Once P establishes residency and acquires citizenship, he is a resident citizen derived within and without,
certainly his income from operations derived from his supermarket in the US will be taxed here.