MAY 15, 2015.Philippine Journal CaseContents of a valid waiver1. Waiver must contain an expiration date in order to avoid an unlimited span of investigation which could lead to unscrupulous acts of investigators.2. RMO 20-90 provides that, if taxes exceed 1 Million, the waiver MUST be signed by the Commissioner.3. The reckoning period of the extension is the date of acceptance. MUST be included in the waiver.4. The fact of receipt of the taxpayer must be indicated in the original copy.

VOID Waiver; Effect: - It will not extend the period to assess taxes.In the case; since the waiver is void, the assessment issued during the extended period is invalid. Because it is made after the 3-year period to assess.-The assessment being invalid, the warrant of distraint and levy is also void. The government cannot collect based on a void warrant of distraint and levy.

CIR vs. HUDOSThe waiver in the case has infirmities, because it was signed by Pascos but the Board of Directors did not authorize him.The waiver must comply with RMO 20-90.The requirements for a valid waiver:1. Waiver must be signed by the taxpayer or agent(THERE MUST BE A WRITTEN AUTHORITY)2. Date of acceptance must be indicated.3. The Fact of Acceptance must be included.4. If the taxes exceed 1 million pesos, it must be signed by the Commissioner.5. Date of Execution must be indicated.6. If the date of execution is by the taxpayer was made within the 3-year period, but the date of acceptance was beyond the period. The waiver is void. (Date of execution and date of acceptance must be made within the 3-year period.

DOCTRINE OF ESTOPPELGeneral Rule: The doctrine can be used against the taxpayer.Exception: When it pertains to the Statute of Limitations involving assessments, especially one where there exist a detailed procedure in the preparation of the waiver.

In the case of Hudos: There was a detailed procedure in the manner of preparing a waiver. Such procedure has been prescribed primarily because it intends to protect the rights of a taxpayer. Thus, the doctrine of estoppel cannot be applied.

The doctrine could have been applied if there is a showing that taxpayer exerted efforts or performed several acts which would lead to the conclusion that the postponement of the assessment was by reason of the acts conducted by the taxpayer.

RECITATION(I excluded the first two sablay) of Vanessa:Waiver must be accepted by the taxpayer, it must include the period or expiration date, signed by the taxpayer. CIR or RO must sign, indicating such acceptance, and indicating the date of acceptance.*Before acceptance, the waiver must be reviewed by BIR.Both date of execution of the waiver and the acceptance must be indicated therein.Waiver must be executed in 3 original copies. 1 attached in the case. 1 to the taxpayer. 1 to the officer that would accept the waiver.

CIR VS. ENCARNACION.Implied consent can never be presumed. The execution of the waiver is not a unilateral act. It is an agreement between the taxpayer and the Commissioner. Waiver would only be valid if both signature would appear on the face of the waiver.

Sec. 223 of Tax Code.Instance where the period to assess will be tolled or suspended.1. During the period which the Commissioner is prohibited from making an assessment.2. During the period beginning distraint or levy or any proceeding in court and for sixty days thereafter.3. IF the taxpayer filed a request for reinvestigation WHICH was GRANTED4. Taxpayer cannot be located in the address given by him in the return for which the tax has been assessed. EXCEPT if the taxpayer informed the Commissioner of the change in address.5. The taxpayer is out of the Philippines6. When there is a warrant of Distraint or levy duly served upon the taxpayer and no property can be located.

Question: IS the issuance of PAN mandatory?Yes, except in those enumerated in Sec. 2281. When the finding of any deficiency tax is the result of mathematical error in the computation of the tax as appearing on the face of the return2. When a discrepancy has been determined between the tax withheld and the amount actually remitted by the withholding agent3. When a taxpayer who opted to claim a refund or tax credit of excess creditable withholding tax for a taxable period was determined to have carried over and automatically applied the same amount claimed against the estimated tax liabilities for the taxable quarter or quarters of the succeeding taxable year.4. When the excise tax due on excisable articles has not been paid.5. 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, trades or transferred to non-exempt persons.

Case of Mengulto in relation with Metrostar.The applicable ruling is the case of metrostar.

Governing principles involving assessment: Case of CIR vs Gonzales and Pascor

Question: When do we reckon the period when assessment has been made?When the assessment has been released, mailed, or sent to the taxpayer.

Question: Is assessment necessary before taxpayer can be prosecuted for violation of the NIRC?No, as provided in the case of UNGAB.UNGAB CASE The moment the taxpayer filed a fraudulent return with intent to evade the tax- that completes the crime. If no assessment was issued by the CIR but there appears to be a fraudulent return by the taxpayer. And the intent to evade tax is presumed because of the under-declaration of more than 30%. The assessment is no longer necessary.

Question: Can the procedures outlined in Sec. 208 be applied retroactively?Yes, REYES CASECIR VS REYES.General Rule: Laws are prospective in natureException: 1. Statutes which are remedial in nature2. Statutes that does not create or take away vested rights.Section 208 in the case is provided as remedial in nature.

RCBC CASE****The waiver issued in the case is considered valid on the ground of estoppel because RCBC paid the tax partially.Question: What is the doctrine of estoppel?When a person who made a declaration, such act is conclusive upon him when the same is relied upon by someone else.Compare RCBC with the case of Hudos.In the case of Hudos, estoppel did not apply because there is a detailed procedure on the manner on how to execute a waiver. Hudos never performed any act which would rule out good faith in its favour.In RCBC, estoppel will apply because it filed a request for reinvestigation which was granted. There was an assessment conataining a reduced amount of tax liability. Because of this, RCBC had paid a portion of the tax. RCBC benefited from the new issuance of the assessment. The Supreme Court ruled that the partial payment indicated in the new assessment is an implied admission on the part of taxpayer with respect to the validity of the waiver.

Doctrine of estoppel: General Rule: will apply, Exception: Statute of Limitations or execution of waiver. EXCEPTION TO THE EXCEPTION: If there are acts that would indicate that the taxpayer benefited from the execution of the waiver.

TAX REMEDIES PROPER1. Remedies available to taxpayers2. Remedies available to the governmentDoctrine of Exhaustion of Admin Remedy is applicable. Before filing a petition before the CTA, a protest should be first filed before the CIR Requisites for a valid protest: RR 12-85

Effect of Failure to protest- Assessment shall become final and executory.ALLIED BANKING CASEIF An assessment issued to the petitioner indicated FINAL DECISION the recourse of the taxpayer is appeal the assessment to the CTA within 30 days.In the case, petitioner filed a petition for review before the CTA. CIR argued that there was a violation of the Doctrine of Exhaustion of Administrative Remedies. Petitioner should have filed a protest before the CIR.The SC ruled that: Since the language use and tenor of that assessment is that it is already the final decision of the CIR, and instead of using protest, the CIR use the word Appeal. Then such act of the CIR had led the taxpayer to believe that the assessment is the final decision of the CIR. In which case, the taxpayer should not be faulted because of the fact that the CIR has been estopped by reason of its acts.CIR must indicate in clear and unequivocal manner whether its action in a disputed assessment constitutes its final decision. If the CIR does not indicate it in an unequivocal manner and the taxpayer was made to believe that such decision has already been CIRs final decision, then any petition filed before the CTA, notwithstanding the failure to comply with the Doctrine of Exhaustion of Administrative Remedies, will not be dismissed.Question: What is the prescriptive period to collect tax3 years counted form the date of issuance of assessment.*Both issuance of assessment and receipt of warrant of distraint and levy must be within the 3-year prescriptive period.

SEATWORK/QUIZ12/19/74 Issuance of Receipt of Notice of Assessment01/17/1975- Protest, BIR ordered review of the documents12/10/1979- FAN issued1/2/80 Received by Taxpayer. No action filed3/12/80- Warrant of distraint and levyQuestion Rule on the legality of the warrant.Answer: Warrant is valid. Only about 4 months has been used, from the 5-year prescriptive period. The review is a reinvestigation. This is the case of Wyeth.

General Rule: 3 years within which to assess and collect taxesException: 1.If there is a false or fraudulent return with intent to evade tax 2. There is no return filed.Government has 10 years to assess. If the government has assessed based on this period, the government has 5 years to collect the tax.*IF taxpayer has signed a waiver, and there was an assessment issued within the prescriptive period, the government has 5 years to collect. *5 years to collect will only apply if there has been an assessment made in the 10 year period or during the extended period.*NOTE in Wyeth the prescriptive period to assess is 5 years.Wyeth Ruling is the same in the Case of ATLAS

Failure of BIR to Act within the 180-day period.Remedy:1. Appeal to the CTA within 30 days from the expiration of 180 days.2. Await for the decision of the CIR. Appeal within 30 days from receipt of the decision.

Problems:3/27/98Assessment Notice

4/20/98Protest

3/3/99Protest Denied

4/12/99Elevated to CTA by appeal

Was the appeal filed on time? No, 39 days. Appeal was filed outside the 30 day period.10/4/2010Protest

6/10/2011PFR with CTA

Filed beyond the 30 day period. Dismiss the appeal for being filed outside the period.CTA cannot acquire jurisdiction over assessments that has already acquired finality.10/4/10Protest

10/15/11Denied by CIR

11/15/11PFR to CTA

31 days, remember October has 31 days. Dismiss. It should have been filed on 11/14/1110/4/10Protest

6/30/11Before Decision Taxpayer filed PFR to CTA

7/30/12CTA denied

8/30/12CIR Denied protest

9/1/12Taxpayer appealed the decision of CIR denying the protest.

Dismiss, the decision is barred by res judicata.*OPTIONS Of taxpayer are mutually exclusive.Choice of one bars the application of the other.

The 180+30 days period is not mandatory remedy of the Taxpayer, he can opt to wait for the decision of the CIR.The Supreme Court in the case of RCBC vs CIR said that the option of the taxpayer is mutually exclusive.CIR VS UNION SHIPPING12/27/74Assessment

1/4/75Received

1/10/75Protest

1/13/75Received by CIR

11/25/76CIR issued Warrant of Distraint and Levy

11/29/76Received motion for reinvestigation

12/28/79CIR filed a collection case

1/10/79Petition for review

Question: Was the protest filed on time? YesWas the Warrant of Ditraint and Levy file on time? YesWas the collection case filed on time? NO. CIR has until 12/27/77 to file collection case.The Supreme Court ruled that CIR should always indicate to the taxpayer his decision over a particular manner.