BIR Tax Authority Quiz

Questions and Answers

What happens if a taxpayer is unable to address a deficiency tax discrepancy?

The case is endorsed to the reviewing office for a Deficiency Tax Assessment in the form of a Preliminary Assessment Notice.

What is required of taxpayers after receiving a Preliminary Assessment Notice (PAN)?

Taxpayers must respond to the PAN within fifteen days of receipt.

What must be included in the Formal Letter of Demand and Final Assessment Notice (FLD/FAN)?

The FLD/FAN must state the facts, relevant laws, rules, and jurisprudence on which the assessment is based.

What option does a taxpayer have if their protest against the FLD/FAN is denied?

The taxpayer may appeal to the Court of Tax Appeals (CTA) within thirty days of receipt of the denial. Signup and view all the answers

What criteria must the Final Decision on a Disputed Assessment (FDDA) meet to be valid?

It must state the facts and the applicable law, rules, and regulations; otherwise, the decision is void. Signup and view all the answers

What is the purpose of the Letter of Authority (LOA) issued by the BIR?

The LOA allows the Revenue Officer to conduct a tax examination and specifies the type of tax and year covered. Signup and view all the answers

What are the consequences of failing to submit the requested documents after receiving an LOA?

Failing to submit the documents may lead to a second request, a final notice, and potentially a 'Subpoena Duces Tecum'. Signup and view all the answers

What is a Notice of Discrepancy (NOD) and when is it issued?

A NOD is issued to taxpayers found liable for tax deficiencies after the Revenue Officer reviews the documents. Signup and view all the answers

What opportunity is provided to taxpayers after receiving a Notice of Discrepancy?

Taxpayers have the chance to explain their case and present supporting documents during a Discussion of Discrepancy (DOD). Signup and view all the answers

What is the time frame for holding a Discussion of Discrepancy (DOD) after receiving the NOD?

The DOD must be held within thirty days from the receipt of the NOD. Signup and view all the answers

Study Notes

Letter of Authority (LOA)

LOA is issued by the BIR to authorize tax examination of a taxpayer's accounts.
Specifies the type of tax under review: income tax, value-added tax, withholding tax, etc.
Typically targets one taxable year only.

Request for Documentation

LOA includes an attachment detailing the required documents: tax reports, tax returns, accounting records.
Revenue Officer (RO) uses these documents for examination purposes.
Failure to submit documents results in a second request, then a final notice.
Continued non-compliance may lead to a "Subpoena Duces Tecum," mandating document submission by a specific time.

Notice of Discrepancy (NOD)

Findings from document checks are submitted to the Revenue District Officer (RDO) for approval.
Taxpayers with tax deficiencies receive an NOD summarizing discrepancies.
Discussion of Discrepancy (DOD) allows taxpayers to explain their situation and present documents.
DODs must be conducted within 30 days of receiving the NOD.

Preliminary Assessment Notice (PAN)

If sufficient basis for deficiency tax is found, the Commissioner issues a PAN to the taxpayer.
Taxpayers must respond to the PAN within 15 days of receipt.

Formal Letter of Demand and Final Assessment Notice (FLD/FAN)

FLD/FAN is issued detailing the taxpayer's deficiency tax and basis for assessment.
Taxpayers may protest within 30 days of receiving the FLD/FAN.
Various forms of review: request for reconsideration or reinvestigation with a 60-day submission deadline for supporting documents.
Denied protests can be appealed to the Court of Tax Appeals (CTA) within 30 days.
If not acted upon within 180 days, the taxpayer can appeal to the CTA or wait for final decision.

Final Decision on a Disputed Assessment (FDDA)

The Commissioner's decision must include facts and legal basis; otherwise, it is void.

Description

Test your knowledge on the BIR's Letter of Authority (LOA) process. This quiz covers the essentials of what an LOA entails, including the types of taxes examined and the documentation required for tax investigations. Perfect for understanding the role of the BIR in tax assessments.