Professional Documents
Culture Documents
(TWEETIE’S REPORT)
Officers of the Bureau responsible for the conduct of audit/investigation shall prepare a list of all
taxpayers who fall within the selection criteria prescribed in a Revenue Memorandum Order
issued by the CIR to establish guidelines for the audit program of a particular year. Such list shall
then be submitted to their respective Assistant Commissioner for pre-approval and to the CIR
for final approval.
How many times can a taxpayer be subjected to examination and inspection for the same taxable year?
General Rule: A taxpayer’s books of accounts shall be subjected to examination and inspection
ONLY ONCE for a taxable year, except in the following cases:
1. When the Commissioner determines that fraud, irregularities, or mistakes were committed by
the taxpayer;
2. When the taxpayer himself requests a re-investigation or re-examination of his books of
accounts;
3. When there is a need to verify the taxpayer’s compliance with withholding and other internal
revenue taxes as prescribed in a Revenue Memorandum Order issued by the CIR.
4. When the taxpayer’s capital gains tax liabilities must be verified; and
5. When the Commissioner chooses to exercise his power to obtain information relative to the
examination of other taxpayers.
LETTER OF AUTHORITY
The authority given to the appropriate revenue officer assigned to perform assessment
functions. It empowers or enables the revenue officer to examine and scrutinize taxpayer’s
books in order to determine their correct tax liabilities.
Valid for only 30 days from date of issue, and gives a revenue officer only a period of 120 days
from receipt of LOA to conduct his examination of the taxpayer.
PRE-ASSESSMENT NOTICE
It is a communication issued by the Regional Assessment Division, or any other concerned BIR
office, informing a Taxpayer who has been audited of the findings of the R.O., following the
review of these findings. If the taxpayer disagrees with the findings stated in the PAN, he shall
then have 15 days from his receipt of the PAN to file a written reply contesting the proposed
assessment.
ADMINISTRATIVE REMEDIES
BEFORE PAYMENT:
Before payment of the deficiency tax assessment, the taxpayer’s remedy is to file a written
protest within 30 days from date of receipt of the formal assessment notice. The timely filing of
the written protest against the assessment is mandatory; otherwise, the assessment will
become final (Sec. 228, NIRC).
RECONSIDERATION / REINVESTIGATION
RECONSIDERATION
is a plea for the re-evaluation of the deficiency tax assessment on the basis of existing records,
without need of additional evidence.
After filing the protest, the next step would be for the taxpayer to wait for the BIR’s decision.
The BIR has 180 days to render its decision, counted from the date of filing of the protest, in
case of a request for reconsideration.
REINVESTIGATION
is a plea for the re-evaluation of the assessment on the basis of newly-discovered or additional
evidence that a taxpayer intends to present in the reinvestigation.
The taxpayer is required to submit all relevant supporting documents (meaning, those which are
necessary to support the legal and factual bases in disputing the tax assessment) within 60 days
from filing the protest/request for reinvestigation; if he fails to do so within the 60-day period,
the assessment shall become final. The taxpayer will then be barred from disputing the
correctness of the assessment by introducing newly-discovered or additional evidence, and the
BIR shall issue its Final Decision on Disputed Assessment (FDDA).
AFTER PAYMENT
After payment of deficiency tax assessment was made, his remedy is to file a written claim for
refund or tax credit with the appropriate government agency – the Bureau of Internal Revenue
or the Department of Finance One Stop Shop Center. The taxpayer need not pay the deficiency
tax assessment under protest nor is he required to write a letter to the BIR protesting said
assessment at the time of payment (Secs. 204[C] and 229, NIRC).
JUDICIAL REMEDIES
If the protest is denied in whole or in part, or is not acted upon within 180 days from submission
of documents, the taxpayer adversely affected by the decision or inaction may appeal to the
Court of Tax Appeals within 30 days from receipt of the said decision, or from the lapse of the
180-day period; otherwise, the decision shall become final, executory and demandable (Sec.
228, NIRC).
In any case, no such suit or proceeding shall be filed after the expiration of two (2) years from the date
of payment of the tax or penalty regardless of any supervening cause that may arise after payment:
Provided, however, That the Commissioner may, even without a written claim therefor, refund or credit
any tax, where on the face of the return upon which payment was made, such payment appears clearly
to have been erroneously paid.
(MERIAM’S REPORT)
Dispute of Assessment
Protest
It is the act by the taxpayer of questioning the validity of the imposition of the corresponding
delinquency increments for internal revenue taxes as shown in the notice of assessment and letter of
demand.
“SEC. 228. Protesting of Assessment – When the Commissioner or his duly authorized representative
finds that proper taxes should be assessed, he shall first notify the taxpayer of his findings: provided,
however, that a preassessment notice shall not be required in the following cases:
(a) When the finding for any deficiency tax is the result of mathematical error in the computation of the
tax as appearing on the face of the return; or
(b) When a discrepancy has been determined between the tax withheld and the amount actually
remitted by the withholding agent; or
(c) 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 for the taxable quarter or quarters of the succeeding taxable
year; or
(d) When the excise tax due on excisable articles has not been paid; or
(e) When the 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, traded or transferred to non-
exempt reasons;
The taxpayer or its authorized representative or tax agent may protest administratively against the
aforesaid FLD/FAN within thirty (30) days from date of receipt thereof. The taxpayer protesting an
assessment may file a written request for reconsideration or reinvestigation
Forms of Protest
Request for reconsideration
a claim for re-evaluation of the assessment based on existing records without need of additional
evidence.
It may involve a question of fact or law or both. It does not toll the statute of limitations.
• For requests for reinvestigation, the taxpayer shall submit all relevant supporting documents in
support of his protest within sixty (60) days from date of filing of his letter of protest, otherwise,
the assessment shall become final.
NOTE: The sixty (60)-day period for the submission of all relevant supporting documents shall not apply
to requests for reconsideration.
Remedy available to the taxpayer if the CIR denies his protest in whole or in part
The remedy is to appeal such decision to the CTA within 30 days from receipt of the decision otherwise,
the assessment will become final, executory and demandable.
If the protest is denied, in whole or in part, by the Commissioner’s duly authorized representative, the
taxpayer may either:
1. Appeal to the Court of Tax Appeals (CTA) within thirty (30) days from date of receipt of the said
decision
2. Elevate his protest through request for reconsideration to the Commissioner within thirty (30) days
from date of receipt of the said decision
Options given to the taxpayer if there would be an inaction by the CIR within 180 days from
submission of the documents
1. File a petition for review with the CTA within 30 days after the expiration of the 180-day period;
or
2. Wait for the final decision of the CIR on the disputed assessment and appeal the final decision to
the CTA within 30 days from the receipt of the decision.
(TEONILO’S REPORT)
SERVICE OF ASSESSMENTS
Burden of Proof
a duty of a party to present evidence on the facts in issue necessary to establish his claim or defense by
the amount of evidence required by law (Sec. 1, Rule 131, Revised Rules of Court.)
If the taxpayer denies ever having received an assessment from the BIR, it is incumbent upon
the BIR to prove by competent evidence that such notice was indeed received by the addressee.
While a mailed letter is deemed received by the addressee in the course of mail this is merely a
disputable presumption, subject to controversy and a direct denial thereof shifts the burden on
the party favored by the presumption to prove that the mailed letter was indeed received by the
addressee. (Republic vs. CA, 149 SCRA 351)
When a notice of assessment was sent to old office address and not to the new address, there
was a failure to affect a timely valid assessment. Therefore, the period for filing a criminal case
for tax liabilities had prescribed by the time BIR instituted the criminal cases. (CIR vs. Bank of the
Philippine Islands, G.R. No. 135446, September 23, 2003)
Section 228 of NIRC implies that prior to the finality of the assessment or the decision and while
the matter is pending either with the BIR Commissioner or the Tax Court, as the case may be,
the assessment may not as yet serve as the basis of collection by distraint or levy or by judicial
action. (Central Cement Corp. vs. Commissioner, CTA No. 4312, December 21, 1988)
ASSESSMENT
Not an Appealable Decision
While an assessment by the BIR can become final and executory, it is not, however, the
Commissioner’s decision contemplated by Section 7 of R.A. 1125 from which a petition for
review may forthwith be filed with the Court of Tax Appeals (Commissioner vs. Villa, 22 SCRA 4)
Rather, it is the action taken by the Commissioner in response to the taxpayer’s request for
reconsideration of the assessment or to his written claim for refund that would constitute the
decision, the receipt of which will start the 30-day period within which the taxpayer may appeal
to the Court of Tax Appeals.