REMEDIES

A.

IF TAX IS NOT YET PAID

1.

Assessment [Bar, 1992]

a.
Definition
a-1. An assessment contains not only a
computation of tax liabilities, but also a
demand for payment within a prescribed
period. It also signals the time when penalties
and protests begin to accrue against the
taxpayer. To enable the taxpayer to
determine his remedies thereon, due process
requires that it must be served on and
received by the taxpayer. Accordingly, an
affidavit, which was executed by revenue
officers stating the tax liabilities of a taxpayer
and attached to a criminal complaint for tax
evasion, cannot be deemed an assessment
that can be questioned before the Court of
Tax Appeals [See CIR vs. Pascor Realty and
Development Corporation, G.R. No. 128315,
dated 29 June 1999].
a-2. It is the formal letter of demand calling for
payment of the taxpayers deficiency tax or
taxes shall state the fact, the law, rules and
regulations or jurisprudence on which the
assessment is based, otherwise the formal
letter of demand and the notice of
assessment shall be void [See CIR vs. Enron
Subic Power Corporation, G.R. No. 166387,
dated 19 January 2009].
a-3. An assessment is presumed to be valid, and
absent proof of any irregularities in the
performance of official duties, it will not be
disturbed. Even an assessment based on
estimates is prima facie valid and lawful
where it does not appear to have been
arrived at arbitrarily or capriciously. The
burden of proof is upon the complaining
party to show clearly that the assessment is
erroneous [See Marcos II v. Court of Appeals,
G.R. No. 120880, dated 5 June 1997].
a-4. Until the assessment becomes final and
executory, the government cannot resort to
any civil, criminal and administrative
remedies for the collection of unpaid taxes

b.

against the taxpayer, except in cases

involving fraudulent returns [See Ungab vs.
Cusi, Nos. L-41919-24, dated 30 May 1980].
a-5. Legal Basis: Commission of Internal Revenue
has the power to assess deficiency tax under
Sections 4-7, 203, 222-223, 228, 232, 235 and
266 of the NIRC [See Fitness by Design, Inc. vs.
CIR, G.R. No. 177982, dated 17 October 2008;
see also Revenue Regs. No. 12-99, dated 6
September 1999, as amended by Revenue
Regs No. 13-2013, dated 28 November 2013].
Period to Assess
b-1. General Rule: Internal revenue taxes shall be
assessed within three (3) years after the last
day prescribed by law for the filing of the
return.
1.
In a case a return is filed beyond the
period prescribed by law, the three (3)year period shall be counted from the
day the return was filed.
2.
A return filed before the last day
prescribed by law for the filing thereof
shall be considered as filed on such last
day [See Section 203, NIRC].
3.
Counting of Period [See Article 13 of
the New Civil Code].
b-2. Exceptions:
1.
In the case of a false or fraudulent
return with intent to evade tax or of
failure to file a return, the tax may be
assessed, or a proceeding in court for
the collection of such tax may be filed
without assessment, at any time within
ten years after the discovery of the
falsity, fraud or omission [See Section
248(B), NIRC].
2.
By agreement in writing between the
taxpayer and the Commissioner of
Internal Revenue, the period to assess
may be extended within the period
agreed upon. The period so agreed
upon may be extended by subsequent
written agreement made before the
expiration of the period previously
agreed upon [See Section 222, NIRC;
see also RMO 20-90, 4 April 1990 and
RDAO 05-01, 2 August 2001].
b-3. Jurisprudence

1.

c.

d.

The prescriptive period on when to assess

taxes benefits both the government and
the taxpayer. Exceptions extending the
period to assess must be strictly construed.
Due to the defects in the Waiver, that is, its
non-compliance
with
the
proper
procedures, the period to assess taxes was
not extended. Hence, the assessments
were issued by the BIR beyond the three
(3)-year prescriptive period and thus, null
and void [See CIR vs. Kudos Metal
Corporation, G.R. No. 178087, 5 May 2010].
2.
Estoppel cannot be applied in the
assessment of taxes. The taxpayer is not
estopped from raising the prescription
despite the fact that it was the one which
asked for additional time to submit the
required documents. Estoppel is applied in
the collection, not in the assessment, of
taxes [See Collector of Internal Revenue
vs. Suyoc Consolidated Mining Company,
104 Phil 819].
3.
Related
Cases
[See
RCBC
vs.
Commission of Internal Revenue, G.R.
No. 170257, dated 7 September 2011;
Commission of Internal Revenue vs.
Kudos Metal, G.R. No. 178087, dated 5
May 2010]
This is the FIRST remedy of the government to
collect unpaid taxes due against a taxpayer.
c-1. Republic Act 8424 requires that the taxpayer
must be INFORMED, not merely NOTIFIED of
the results of the assessment [See CIR vs.
Azucena Reyes, G.R. No. 159694, dated 27
January 2006 and Azucena Reyes vs. CIR,
G.R. No. 163581, dated 27 January 2006]
c-2. While the Tax Code authorizes the use of the
Best Evidence Obtainable, the assessment
must be rest on actual, credible evidence,
not merely hearsay evidence [See CIR vs.
Hantex Trading Co., Inc., G.R. No. 136975,
dated 31 March 2005].
Taxpayer DISPUTES the assessment.
d-1. By filing a formal protest within 30 days from
receipt of the Assessment [See Commissioner
of Internal Revenue vs. First Express
Pawnshop, G.R. Nos. 172045-046, dated 16
June 2009]

2.

d-2. By submitting evidence in support of the

protest within 60 days from filing of the Protest
[Section 228, Republic Act 8424]
d-3. Notes
1.
Inaction of the Commissioner is not
deemed a denial of the protest
[Lascona Land Company, Inc. vs.
Commissioner, G.R. No. 171251, dated 5
March 2002].
2.
Under Section 7(a) (2) of Republic Act
No. 9282, the jurisdiction of the Court of
Tax Appeals includes inactions of the
CIR in cases of disputed assessments.
The Supreme Court settled these
conflicting view when it held that in
case the Commissioner failed to act on
the disputed assessment within the 180day period from date of submission of
documents, a taxpayer can either:
(1) File a petition for review with the
CTA within 30 days after the
expiration of the 180-day period;
or
(2) Await the final decision of the CIR
on the disputed assessments and
appeal such final decision with
the CTA within 30 days after
receipt of a copy of such decision
[See Lascona Land Company,
Inc. vs. Commissioner, G.R. No.
171251, dated 5 March 2002].
3.
The filing of a civil case for collection is
deemed a denial of the protest
[Republic vs. Lim Tian Teng & Sons, Inc.,
16 SCRA 584;
Dayrit vs. Cruz, L-39910,
26 September]
Appealsa.
Court of Tax Appeals-Division [See Republic Act
9282 as amended by Republic Act 9503]
a-1. Jurisdiction [See Section 7]
a-2. Within thirty (30) days from receipt of the
decision, judgment or order finally denying
the protest [See Section 9]
a-3. A party adversely affected by the Decision of
the CTA-Division is allowed to file a Motion for
Reconsideration or Motion for New Trial
[Section 9]
b.
Court of Tax Appeals-En Banc [See Republic Act
9282 as amended by Republic Act 9503]

3.

b-1. A party adversely affected by the Resolution

or Order of the CTA-Division denying his
Motion for Reconsideration or Motion for New
Trial may file a Petition for Review with the
CTA En Banc
b-2. Period: Within 15 days from receipt of the
denial of the Motion for Reconsideration or
Motion for New Trial
c.
Supreme Court
c-1. Within 15 days from receipt of the Resolution,
judgment or final order of the CTA En Banc
via a Petition under Rule 45 of the Revised
Rules of Court [See Section 11].
c-2. If a motion for reconsideration is filed, the 15day period is reckoned from denial of said
motion [See Rule 45, Revised Rules of Court].
Collection of Taxes
a.
Rules
a-1. Assessment precedes the collection of taxes.
It is after the assessment became final and
executory that the government may enforce
the collection of the corresponding tax
liabilities. In fact, the NIRC provides that no
proceeding in court shall begun without the
prior assessment for the collection of taxes
[See Section 203, NIRC].
a-2. Any internal revenue tax which has been
assessed within the prescribed period shall be
collected by the government within the
period of five (5) years reckoned from the
assessment [See Section 222(c), NIRC]. The
collection may be enforced thru judicial or
administrative remedies.
a-3. The period of prescription of action to collect
a
taxpayer's
deficiency
income
tax
assessment is interrupted when the taxpayer
request for a review or reconsideration of said
assessment, and starts to run again when said
request is denied [See CIR vs. Capitol
Subdivision, Inc., G.R. No. L-18993, dated 30
April 1964].
a-4. Judicial remedies may be in the form of a
Civil Action for Collection OR a criminal
action for non-payment of taxes [See Section
221, NIRC; see also Republic vs. Salud Hizon,
G.R. No. 130430, dated 13 December 1997;
PNOC vs. Commissioner of Internal Revenue,
G.R. No. 109976, dated 26 April 2005]. Judicial
action may be instituted in cases of

4.

B.

Fraudulent Returns without an assessment

[See Section 269, NIRC; see also Adamson
Management Corporation vs. Court of
Appeals, G.R. No. 120935, dated 24 May
2009].
Other REMEDIES
a.
Compromise [Section 204, NIRC; see also Revenue
Regs. 7-2001 and 13-2001; CIR vs. Azucena T. Reyes,
G.R. No. 159694, dated 27 January 2006].
b.
Abatement [Section 204, NIRC; see also Revenue
Regs 7-2001 and 13-2001].
c.
Tax Amnesty
c-1. Definition It is a general pardon to
taxpayers who want to start a clean tax slate.
It also gives the government a chance to
collect uncollected tax from tax evaders
without having to go through the tedious
process of a tax case [See Baas, Jr. vs. Court
of Appeals, G.R. No. 102967, dated 10
February 2000].
c-2. See Republic Act 9480.

IF TAX HAS ALREADY BEEN PAID

1.

2.

4.

This is understood to be a remedy granted to the

taxpayer. The government is not expected to grant a
refund or tax credit for tax erroneously or illegally paid
motu proprio.
Remedies available
a.
Claim for refund [See Section 229, NIRC; see also
CIR vs. Acesite Philippines, G.R. No. 147295, dated
16 February 2007]
b.
Claim for tax credit [Section 229, NIRC; see also
Revenue Regs. 14-11, dated 29 July 2011]
Period to Claim
a.
Generally, within two (2) years after payment [See
CIR vs. PNB, G.R. No. 144653, dated 28 August 2001]
b.
If paid in installments, the 2-year period is counted
from the payment of the last installment or, if paid
late, from the date the last return should have
been filed
c.
In case of corporate quarterly returns, the 2-year
period is counted from the date of payment of the
last quarter tax, or, if paid late, from the date the
final return should have been filed [Commissioner
of Internal Revenue vs. Philam Life Insurance
Company, Inc., G.R. 105208, 29 May 1995]
Where to File Claim

a.

b.

c.

d.

With the Commissioner of Internal Revenue to

afford him an opportunity to correct the mistake, if
any, committed by him or his subordinate [See P.J.
Kiener Co., Ltd. vs. David, 92 Phil. 945]
Court of Tax Appeals-Division
b-1. Within 30 days from receipt of an adverse
decision of the Commissioner; or
b-2. Prior to the lapse of the 2 year prescriptive
period if no action is taken by the
Commissioner [Sections 204 and 229, NIRC]
Court of Tax Appeals-En Banc
c-1. A party adversely affected by the Resolution
or Order of the CTA-Division denying his
Motion for Reconsideration or Motion for New
Trial may file a Petition for Review with the
CTA En Banc [Section 11, Republic Act 9282].
c-2. Within 15 days from receipt of the denial of
the Motion for Reconsideration or Motion for
New Trial
Supreme Court
d-1. Within 15 days from receipt of the Resolution,
judgment or final order of the CTA En Banc
via a Petition under Rule 45 of the Revised
Rules of Court [Section 11, Republic Act
9282].
d-2. If a motion for reconsideration is filed, the 15day period is reckoned from denial of said
motion [Rule 45, Revised Rules of Court].