Podcast
Questions and Answers
Which of the following best describes tax remedies available to the government?
Which of the following best describes tax remedies available to the government?
- Actions taken by taxpayers to seek relief from tax burdens.
- Legal procedures protecting taxpayers from revenue officer excesses.
- Methods of appealing tax assessments deemed unjust.
- Courses of action allowed by law to implement tax laws and enforce collection. (correct)
A taxpayer believes a tax law is being applied oppressively. What recourse is available to them?
A taxpayer believes a tax law is being applied oppressively. What recourse is available to them?
- Utilize legal actions to seek relief from the oppressive effect. (correct)
- Lobby Congress to amend the tax law.
- Refuse to pay the tax until the issue is resolved.
- File a civil case against the revenue officers.
The BIR has made a final assessment that is executory and demandable. What is the BIR's next course of action?
The BIR has made a final assessment that is executory and demandable. What is the BIR's next course of action?
- To reassess the tax liability.
- To file a criminal case for tax evasion.
- To negotiate a compromise with the taxpayer.
- To begin the remedy of collection. (correct)
If the BIR issues a Final Assessment Notice (FAN), what is the prescriptive period for the BIR to collect the tax?
If the BIR issues a Final Assessment Notice (FAN), what is the prescriptive period for the BIR to collect the tax?
Without a prior assessment, when does the prescriptive period for the BIR to collect taxes begin if a non-fraudulent return was filed?
Without a prior assessment, when does the prescriptive period for the BIR to collect taxes begin if a non-fraudulent return was filed?
When does the prescriptive period for the BIR to collect taxes begin if a fraudulent return was filed or no return was filed?
When does the prescriptive period for the BIR to collect taxes begin if a fraudulent return was filed or no return was filed?
Which of the following scenarios describes a constructive distraint?
Which of the following scenarios describes a constructive distraint?
Under what circumstances can the BIR avail of constructive distraint?
Under what circumstances can the BIR avail of constructive distraint?
Who is authorized to commence distraint proceedings when the amount exceeds PhP 1 million?
Who is authorized to commence distraint proceedings when the amount exceeds PhP 1 million?
What is the right of redemption for a taxpayer if the BIR seizes real properties through levy?
What is the right of redemption for a taxpayer if the BIR seizes real properties through levy?
What must a taxpayer do to exercise the right of pre-emption if the BIR uses distraint?
What must a taxpayer do to exercise the right of pre-emption if the BIR uses distraint?
Under what conditions may the Bureau of Internal Revenue (BIR) enter into a compromise with a taxpayer?
Under what conditions may the Bureau of Internal Revenue (BIR) enter into a compromise with a taxpayer?
What criminal violations can be compromised?
What criminal violations can be compromised?
What is the minimum compromise rate for cases of financial incapacity?
What is the minimum compromise rate for cases of financial incapacity?
Under Section 204(A) of the NIRC, as amended, what is the range of compromise payment options?
Under Section 204(A) of the NIRC, as amended, what is the range of compromise payment options?
When is the approval of the Evaluation Board required for a compromise?
When is the approval of the Evaluation Board required for a compromise?
What is the term for the cancellation of a tax liability?
What is the term for the cancellation of a tax liability?
Under what circumstances can a tax liability be abated?
Under what circumstances can a tax liability be abated?
In addition to the basic tax, what civil penalties may be collected from a taxpayer?
In addition to the basic tax, what civil penalties may be collected from a taxpayer?
Which of the following situations would trigger a 25% surcharge?
Which of the following situations would trigger a 25% surcharge?
When does filing a return late result in a 50% surcharge?
When does filing a return late result in a 50% surcharge?
A taxpayer voluntarily files their tax return after the deadline without notice from the BIR. What surcharge applies?
A taxpayer voluntarily files their tax return after the deadline without notice from the BIR. What surcharge applies?
How is the delinquency interest calculated?
How is the delinquency interest calculated?
What must a taxpayer do to claim a tax refund?
What must a taxpayer do to claim a tax refund?
If a claim for a tax refund is denied by the CIR, what is the deadline for filing a petition for refund with the CTA?
If a claim for a tax refund is denied by the CIR, what is the deadline for filing a petition for refund with the CTA?
Flashcards
Government Tax Remedies
Government Tax Remedies
Actions available to the government to implement tax laws or enforce collection.
Taxpayer Tax Remedies
Taxpayer Tax Remedies
Legal actions taxpayers use to seek relief from undue tax burdens.
Tax Collection Remedy
Tax Collection Remedy
The BIR can collect when the assessment is final and demandable.
Tax Collection Period with Prior Assessment
Tax Collection Period with Prior Assessment
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Tax Collection Period- No Fraudulent Return
Tax Collection Period- No Fraudulent Return
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Tax Collection Period- Fraudulent Return
Tax Collection Period- Fraudulent Return
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Distraint
Distraint
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Actual Distraint
Actual Distraint
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Constructive Distraint
Constructive Distraint
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Levy
Levy
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Right of Pre-Emption
Right of Pre-Emption
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Right of Redemption
Right of Redemption
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Grounds for Tax Compromise
Grounds for Tax Compromise
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Minimum compromise rates
Minimum compromise rates
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Compromise Evaluation Board Required
Compromise Evaluation Board Required
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Tax Abatement
Tax Abatement
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Grounds for Tax Abatement
Grounds for Tax Abatement
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25% Surcharge
25% Surcharge
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50% Surcharge
50% Surcharge
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Tax Interest Rate
Tax Interest Rate
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Interest Period
Interest Period
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Requisites for Tax Refund
Requisites for Tax Refund
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Deadline to Claim Tax Refund
Deadline to Claim Tax Refund
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CTA Petition for Refund
CTA Petition for Refund
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Study Notes
Tax Remedies
- Actions provided by law for the government to implement tax laws and enforce tax collection.
- Legal actions taxpayers can use to seek relief from oppressive tax laws or to check revenue officer excesses.
Tax Collection
- The Bureau of Internal Revenue(BIR) can use collection when the assessment is final and demandable.
- The prescriptive period with prior assessment, is within 5 years from the issuance of the Final Assessment Notice (FAN).
Prescriptive Period without Prior Assessment
- For returns that are not false or fraudulent, it is within 3 years from the actual filing or deadline, whichever is later.
- For fraudulent returns or no return filed, it is 10 years from discovery.
Methods of Collection
- Distraint is the government seizure of personal property to enforce tax payments.
- Actual distraint involves physically seizing property, selling it at a public auction, and applying the proceeds to the tax due; this includes garnishment of bank accounts.
- Constructive distraint makes the person in possession sign a receipt to preserve the property and not dispose of it without BIR authority, and may be used if the taxpayer is retiring, leaving the Philippines, or obstructing tax collection.
- Levy the government seizes real properties to enforce taxes.
- Judicial proceedings involve filing civil or criminal cases for collection or tax evasion.
Distraint Proceedings Authorization
- The Commissioner of Internal Revenue authorizes proceedings for amounts exceeding PhP 1 million.
- A Revenue District Officer authorizes proceedings for PhP 1 million or less.
Taxpayer Rights
- For distraint, the right of pre-emption is to have goods restored if all charges are paid before the sale.
- For levy, the right of redemption allows reclaiming property within 1 year of the sale date; a final deed is executed if this right not exercised.
Compromise Grounds
- There must be reasonable doubt as to the validity of the claim against the taxpayer.
- A compromise is viable if the taxpayer's financial position demonstrates a clear inability to pay.
Compromise Conditions
- Criminal violations can be compromised, except those in court or involving fraud.
- Minimum compromise rates for financial incapacity are 10% of the Basic Assessed Tax.
- Minimum compromise rates for other cases are 40% of the Basic Assessed Tax.
Evaluation Board Approval for Compromise
- The Evaluation Board must give approval when the basic tax exceeds PhP 1 million.
- Also required when the settlement offered is less than minimum rates.
- The Evaluation Board includes the Commissioner of Internal Revenue and four Deputy Commissioners.
Two Types of Compromise under the National Internal Revenue Code (NIRC)
- Section 204 (A) involves payments of 10% or 40% of deficiency, not an additional amount.
- Section 255 involves penalties using Revenue Memorandum Order No. 7-2015 for criminal violations.
Abatement
- This is the cancellation of tax liability.
- Grounds for abatement include unjust/excessive tax assessment.
- Abatement occurs when collection costs do not justify the amount due.
Civil Liabilities
- Civil penalties collected in addition to the basic tax assessed.
- Civil penalties include surcharges and interest.
Surcharge Rates
- A 25% surcharge applies for failure to file/pay on time, incorrect filing location, failure to pay deficiency tax by the deadline, or failure to pay the correct tax due.
- A 50% surcharge applies for willful neglect to file on time.
- Simple neglect (25% surcharge) applies if the taxpayer voluntarily files after the deadline without BIR notice.
Interest on Unpaid Amounts
- Interest is assessed at double the legal rate set by Bangko Sentral ng Pilipinas (12% currently) annually.
- Deficiency interest is imposed on the amount still due after audit or investigation.
- Delinquency interest is imposed for failure to pay on time, any deficiency tax, surcharge, or interest on the notice and demand of the BIR.
- Extended payment interest may be imposed for failure to pay a tax or deficiency tax or any authorized extension of time.
Tax Refund Requisites
- A tax must be erroneously or illegally collected by the BIR.
- A written claim should be filed with the CIR within 2 years of payment date.
- A petition for refund with the Court of Tax Appeals (CTA) must be filed if the claim is denied.
- The refund has to be filed within 30 days of denial and two years from payment date.
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