TAX REMEDIES WITH FLOW CHART

The Code provides the Government with two Remedies

1. Assessment
2. Collection
Two Kinds of assessment and Collection
1. Normal or ordinary
2. Abnormal or Extraordinary
Normal or Ordinary Assessment and Collection is available to the Government:
1. If the returned filed by the taxpayer is not false or fraudulent
2. Govt may make Assessment within 3 years after the last day prescribed by law
from the filing of the return not from the time of payment
3. When the return is filed beyond the period of filing prescribed by law, the 3 year
period shall be counted from the day of the filing of the return
Abnormal or Extra-ordinary Assessment and Collection is available to the Government:
1. If the taxpayers omits or fails to file his return
2. If the taxpayer filed the return but the return was fraudulent
3. If the return filed by the taxpayer was false
Two Remedies Under this kind of Assessment and Collection:
1. Assess and collect
-

prescriptive period is 10 years from the discovery of the non-filing of the return
or the fraudulent or false return
period of collection prescribes after 5 years from the date of final assessment

2. Collect without assessment

- there would be no prescriptive period for the assessment
- period for collection prescribes within 10 years from the discovery of non-filing
of the return or the fraudulent or false return
Procedure for Assessment
1. Pre-assessment Notice
2. Final Assessment Notice
PROCEDURE FOR ASSESSMENT:
Within 15 days from receipt of notice
File a Reply
Send
Notice
Again
Failed
to File
a
Preliminary
Assessment
Reply
Filed
Notice
a Reply
(PAN)

15 days upon receipt of PAN

Repeat PAN

File a Reply
Failed to File a
Reply
DECLARE IN DEFAULT,
SEND FORMAL LETTER OF
DEMAND & NOTICE TO PAY
TAX
Within 30 days from receipt of FAN
File a Protest
SUBMIT COMPLETE
SET OF
DOCUMENTS
BIR IS GIVEN 100
DAYS
TO DECIDE
PROTEST IS
DENIED
or

within 30 days from denial/lapse

APPEAL TO COURT
OF TAX APPEALS

Within 15 days from receipt

MOTION FOR
RECONSIDERATION
Within 15 days from receipt
APPEAL TO THE
COURT OF TAX
APPEALS
Within 15 days from receipt
EN BANC
APPEAL TO THE
SUPREME COURT
A.

Pre-Assessment Notice (PAN) - as a rule, PAN is issued to a taxpayer who fails to file a
return or files a return but fails pay the tax, pays the tax but the same is insufficient.
When is PAN is not necessary:
1.
2.
3.

4.
5.

When the finding for the deficiency tax is the result of Mathematical Error in the
computation of the tax appearing on the face of the return
When a discrepancy has been determined between the tax withheld and the
amount actually remitted by the withholding agent
When a tax payer opted to claim a refund or tax credit excess creditable
withholding tax for a taxable period was determined to have CARRIED OVER and
automatically applies the same amount claimed against the estimated tax liabilities
for the taxable quarter or quarters of the succeeding taxable year
When the EXCISE TAX DUE on excisable articles has not been paid.
When an 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 persons

B. Final Assessment Notice (FAN) - as a rule FAN is issued when:

1. A taxpayer having received a PAN fails to respond within the period provided for by
the rules and regulations

2. The 5 instances enumerated where the pre- assessment is not necessary

C.

Protest- is a remedy afforded to the taxpayer in cases where the BIR issues a final
assessment to the taxpayer
Three (3) Forms of Protest:
1. Local Tax
2. Real Property Tax
3. Tariff and Customs Code

1.

Local Tax
Local Government Code provides when the local treasurer or his duly authorized
representative finds that correct taxes, fees or charges have not been paid, he shall
issue a notice of assessment stating the nature of the tax, fee or charge the amount of
deficiency, the surcharges, interest and penalties.
It is from this assessment that a taxpayer may file a protest within 60 days from
receipt of notice of assessment. If taxpayer does not file the protest within said period,
the assessment shall become final and executor.
Local treasurer shall decide the protest within 60 days from filing. He may either
grant or deny the protest.
GRANT - if he finds it wholly or partly meritorious
He shall issue a notice CANCELLING wholly or partly the assessment
DENY- wholly or partly if he finds that the assessment is wholly or partly CORRECT
with
NOTICE to the taxpayer.
The taxpayer is given a period of 30 days from receipt of denial or the lapse of 60day
period within w/c to appeal to the court of competent jurisdiction RTC.
RTC renders unfavorable decision, Taxpayer may appeal to CTA EN BANC
If still unfavorable, Taxpayer may appeal to SC
LOCAL TAX:
Tax Payer
File a Protest
within 60 days from receipt of notice of assessment
Failure to file
Assessment- becomes Final & Executory

may decide to

GRANT

Local
Treasurer
DENY
if correct

If meritorious
- Cancel Assessment Notice

w/ notice to the TP

30 days from receipt of denial or lapse

of 60 -day period
Appeal to
CTA EN
RTCBANC
SC

1. Real Property Tax made by a Tax Payer (TP) who is not satisfied with the action of
provincial or city assessor in the assessment of his property.
- A TP may within 60 days after from date of receipt of the written notice of assessment ,
appeal to the Local Board of Assessment Appeals (LBAA) of the province or city.
- Before this protest may be entertained, LGC requires TP first pay the tax (Payment
under protest)
- Protest may only be filed within 30 days from the payment of the tax (with annotation
on the receipt payment Under Protest)
- LBAA shall decide within 120 days from receipt of the appeal. The Board after hearing,
shall render a decision based on substantial evidence.
- LBAA renders unfavorable decision, TP may appeal to Central Board of Assessment
Appeals (CBAA).
- If still unfavorable, to CTA, then to SC

Tax Payer
File a Protest
Within 60 days from date of receipt of written notice of
assessment
Tax Payer

LBAA

pay tax (Payment under protest)

(within 120 days)

If unfavorable
CBBA
CTA
SC

2.

The Tariff and Custom Code- this includes those request for protest as well as for
forfeitures
First Situation:
If importer loses his case

-Appeal within 15 days Office of the Commissioner

-Importer may file appeal to the CTA sitting in Division within 30 days from
receipt of the decision
-Importer to file Motion for Reconsideration (MR)before the same division within
15 days, if still unfavorable,
-appeal before the CTA EN BANC
-if still unfavorable, importer may appeal within 15 days to SC
First Situation
Importer
Within 15 days appeal
Commis
sioner
CTA
Division
within 30 days from receipt of decision
If still unfavorable
MR
-within 15 days
CTA
Banc

If still unfavorable

En
Within 15 days if still unfavorable

SC

Second Situation- Importer prevails over the Government

-

There will be an automatic review within 5 days

Automatic Review shall be filed before:
1. Sec of Finance if value of commodity is 5M or more
2. Office of the Commissioner if value is less than 5M
The Commissioner is given a period of 30 days within which to decide.
If Commissioner REVERSES the ruling, he rules for the Govt, this decision
becomes final and executor.
If Commissioner AFFIRMS, the collector does not render a decision within
30 day period, then Automatic Review before the Secretary of Finance.
From the Automatic Review, the decision of the Secretary- if unfavorable
to importer, TP shall be appeal to CTA

Automatic
Review
To be filed to the Office of the Commissioner
30 days to decide

REVERSES

AFFIRMS

Final and
Executory

Automatic Review
Sec .of Finance
If unfavorable
CTA