Tax Remedies

Question 1

This is the process of determining the correctness of tax due, giving of a written notice of the finding to the taxpayer and the issuance of a demand for payment of a tax liability on deficiency.

Answer 1

Assessment

Question 2

This is a formal letter made by the BIR demanding the taxpayer to settle his liability within an indicated period.

Answer 2

Tax Assessment

Question 3

Who makes assessment?

Answer 3

The CIR or his duly authorized representative

Question 4

What is the rule on the statute of limitations on assessment of taxes?

Answer 4

1. If a return is filed is within three (3) years from the last day prescribed by law for the filing of the return or if filed after the last day, within three years from date of actual filing.
   ✓ If no return is filed or the return filed is false or fraudulent, the period to assess is within TEN YEARS from discovery of the omission, fraud or falsity.

Question 5

What is a LOA?

Answer 5

Letter of Authority

Question 6

Through this, the CIR or his representative may allow the examination of any taxpayer for assessment of proper tax liability.

Answer 6

Letter of Authority

Question 7

What are the procedures governing assessment?

Answer 7

1. taxpayer files return
2. LOA is issued
   3, written notice is given to taxpayer after complying

Question 8

This is a document issued to the taxpayer if he is found to be liable for deficiency tax after investigation conducted by a Revenue Officer. It is issued to afford the taxpayer an opportunity to present and explain his side.

Answer 8

A Notice of Discrepancy

Question 9

The NOD shall be the basis for the conduct of the?

Answer 9

Discussion of Discrepancy

Question 10

The Discussion of Discrepancy should not extend beyond how many days from the receipt of the Notice of Discrepancy?

Answer 10

30 days

Question 11

What is PAN?

Answer 11

Preliminary Assessment Notice

Question 12

What are the due process requirements?

Answer 12

1. NOD
2. Issuance of PAN
3. Issuance of the FLD/FAN
4. Disputed Assessment
5. Final decision on a Disputed Assessment
6. FDDA

Question 13

How many days is a taxpayer given from the receipt of PAN to respond?

Answer 13

15 days

Question 14

What happens if a taxpayer failed to respond within 15 days from the receipt of a PAN?

Answer 14

He is considered in default

Question 15

If the taxpayer is considered in default, what should she do?

Answer 15

Formal letter demand and then FAN will be issued

Question 16

What happens if a PAN was issued and the taxpayer responds and disagrees?

Answer 16

FLD and FAN shall be issued within 15 days from reply calling for payment of taxpayer’s deficiency

Question 17

What is the status of a formal letter of demand and FAN that does not state the facts, jurisprudence, and law on which the assessment was based?

Answer 17

Void

Question 18

What is FLD?

Answer 18

Formal Letter of Demand

Question 19

What is FAN?

Answer 19

Formal Assessment Notice

Question 20

How many days may taxpayer protest administratively against the formal letter of demand and assessment notice?

Answer 20

30 days from the date of receipt

Question 21

When protesting, the taxpayer should indicate whether the protest is in the form of what?

Answer 21

1. request for reconsideration
2. request for reinvestigation

Question 22

What is CTA?

Answer 22

Court of Tax Appeals

Question 23

Where may a taxpayer appeal when his protest is denied?

Answer 23

Court of Tax Appeals

Question 24

How many days may a taxpayer appeal to the CTA?

Answer 24

30 days from receipt of FDDA

Question 25

Aside from appealing to the CTA, what can the taxpayer do if her protest is denied?

Answer 25

Elevate her protest through request for reconsideration to the Commissioner within 30 days from receipt of FDDA

Question 26

If the taxpayer did not appeal to the CTA within 30 days from date of receipt, what happens to the assessment?

Answer 26

It becomes final, executory, and demandable

Question 27

True or False: As to judicial means of collection, the same may be commenced without assessment provided that the same be done within the three-year period prescribed in Section 203 of the NIRC.

Answer 27

True

Question 28

What are the kinds of internal revenue tax refund allowed by the NIRC?

Answer 28

1. Refund of overpayment, erroneous payment, or illegal payment of tax or penalty 2. Refund of unutilized input tax credits

Question 29

How does a taxpayer file a claim for refund?

Answer 29

1. File a written claim for refund with the CIR (except if the return clearly shows overpayment) 2. Ensure the claim for refund is filed within the time allowed by both BIR and CTA (administrative and judicial levels)

Question 30

What are the grounds for asking a refund?

Answer 30

(a)Overpayment/excessive payment of an internal revenue tax; (b)Erroneous payment; (c)Illegal payment/payment where the government has no right to collect; and (d)Payment of penalty which the government collected without authority.

Question 31

How many years from the payment of tax or penalty may a taxpayer claim refund?

Answer 31

2 years

Question 32

True or False: A suit or proceeding may be filed after the expiration of 2 years from the date of payment of the tax or penalty regardless of any supervening cause that may arise after payment

Answer 32

False. No suit shall be filed.

Question 33

True or False: The GR is, the period to file a claim for refund shall be reckoned from the filing of the original return, even if such return was amended, and even if the amendment is substantial.

Answer 33

True

Question 34

What is the exception to the GR that the period to claim shall be from the filing of the ORIGINAL return?

Answer 34

When the taxpayer paid additional taxes, the period starts from the time he paid the additional taxes

Question 35

True or False: The Court noted that when an assessment is issued within the 3-year ordinary prescriptive period to assess, the BIR has another 3 years to initiate the collection of taxes.

Answer 35

True

Question 36

True or False: The 5-year period for collection of taxes only applies to assessments issued within the extraordinary period of 10 years in cases of false or fraudulent return or failure to file a return.

Answer 36

True