VI.

TAX REMEDIES under the NIRC

A. Government remedies
1. As to Nature of Proceedings
Administrative Remedies in Detail
1. Tax Lien (Section 219, NIRC)
a. CIR v. NLRC, GR No. 74965, 9 November 1994
2. Compromise
3. Distant of personal property or garnishment of bank deposits
4. Levy of real properties
4. Forfeiture
5. Suspension if business operations
6. Enforcement of administrative fines

Judicial remedies
1. Civil Action
2. Criminal Action

Judicial Remedies in Detail (Section 220. NIRC)

1. Period within which the action may be filed
a. Civil Cases (Sections 203, 222, NIRC)
b. Criminal Cases (See: Title X, NIRC; Section 281, NIRC)
2. Where should these cases be filed?
a. Criminal Cases (See the impossible penalty vis-a-vis the
jurisdiction of courts)
b. Civil Cases (Consider the amount of tax sought to be collected
vis--vis the jurisdiction of courts, together with the provisions of
RA9282)
3. Cases:
a. Republic v. Hizon, GR No. 130430, 13 December 1999 (re approval of
filing of civil and criminal action)
b. CIR v. La Suerte Cigar, G.G. No. 144942, 4 July 2002 (Re participation
of the Office of the Solicitor General)
c. PNOC v. Court of Appeals, G.R. No. 109976, April 26, 2005*
d. Lim v. CA, GR. Nos. 48134-37, 18 October 1990, 190 SCRA 616 (re
prescription of criminal actions, Section 281, NIRC)
e. Marcos II v. CA, GR No. 120880, 5 June 1997 (re enforcement of tax
liability during pendency of probate proceedings)
f. Judy Anne Santos v. People, GR No. 173176, 26 August 2008

2. Remedies as to Procedure
Assessment and Collection
 Collection without assessment

Assessment -
Concept of assessment
What constitutes assessment?
CIR v. Hon. Gonzales, GR No. 177279, October 13, 2010
CIR v. Enron Subic Power Corporation, GR No. 166387, January
19, 2009 relate with CIR v. BPI, GR No. 134052, April 17, 2007
CIR v. Pascor Realty, June 29, 1999
CIR v. Reyes, GR No. 159694, January 27, 2006
Principles
CIR v. Hon. Gonzalez and LM Camus Engineering
Corporation, GR No. 177279, October 13, 2010
Power of the Commissioner to make assessments and
prescribe
additional requirements for tax administration and
enforcement
Kinds of assessment
Statute of Limitation on Assessment of Internal Revenue
Taxes (Sections 202, 222, NIRC)
Rmo 20-90, Philippine Journalists Inc., v. CIR, GR No.
162852, December 16, 2004
CIR v. Kudos Metal Corporation, GR No. 178087, May 5, 2010
CIR v. CA AND CARNATION, GR No. 115712, February 25, 1999
RCBC v. CIR, GR No. 170257, September 7, 2011
Suspension of prescriptive period
Republic v. Hizon, December 13, 1999
BPI v. CIR, GR No. 139736, October 17, 2005
BPI v. CIR, GR No. 174942, March 7, 2008
When assessment is made
General provisions on additions to the tax
Assessment process
Estate of the Late Juliana Diez vda De Gabriel v. CIR, GR No.
155541, January 27, 2004
CIR v. Reyes, GR No. 159694, January27, 2006
PNOC v. Court of Appeas, GR No. 109976, April 26, 2005
CIR v. Menguito, GR No. 16750, September 17, 2008 relate with
CIR v. Metro Star Superama, GR No. 185371, December 8, 2010
Commissioner of Internal Revenue vs. United Salvage and Towage (Phils), Inc.,
G.R. No. 197515, July 2, 2014
Commissioner of Internal Revenue Vs. GJM Philippines
Manufacturing, Inc., GR No. 202695, February 29, 2016 (BIR
must prove receipt of notice by TP)
Commissioner of Internal Revenue Vs. Liquigaz Philippines
Corporation/Liquigaz Philippines Corporation/Commissioner of
Internal Revenue, GR No. 215534/215557, April 18, 2016 (FDDA)
Necessity of Assessment before taxpayer can be prosecuted
for violation of the NIRC
Ungab v. Cusi, May 30, 1980
CIR v. CA, GR No. 119322, June 4, 1996
CIR v. Pascor Realty, June 29, 1999
 CIR v. Hon. Gonzalez and LM Camus Engineering Corporation,
GR No. 177279, October 13, 2010
]
Retroactivity CIR v. Reyes, GR No. 159694, January 27,
2006
Instances when pre-assessment is not required (Section 228)

Collection
Requisites
Prescriptive periods
Bank of the Philippine Islands vs. Commissioner of Internal Revenue,
G.R. No. 181836, July 9, 2014

Distraint of personal property including garnishment

Summary remedy of levy on real property
Forfeiture to government for want of bidder
Further distraint or levy
Tax lien
Compromise
Civil and criminal questions

B. Effects of failure to pay the tax on time: Additions to the tax (Chapter I, Title
X, NIRC)
1. Surcharges
a. Ordinary (Section 248A, NIRC)
Failure to pay tax on time as required by the tax code or the
regulations
Failure to pay the deficiency tax within the time fixed in the
notice
Filing of the return with the wrong office
b. Fraud Penalty (Section 248B, NIRC)
CIR v. Javier Jr., GR No. 78953, 31
July 1991 (199 SCRA 825)
c. Cases:
i. Imposition of Surcharge in mandatory

2. Interest (Section 249, NIRC)

a. In General
b. Deficiency Interest
c. Delinquency Interest
d. On Extended Payments
3. Compromise Penalties
 4. Effect of failure to file information returns (Section 250, NIRC)

NOTES
a. No injunction to restrain collection of taxes (Sec. 218, NIRC)
b. Period within which the government could collect (Sections 203, 222,
NIRC)
Case: Republic v. Hizon, GR No. 130430, 13 December 1999; CIR
v. Javier Jr., GR No. 78953, 31 July 1991 (199 SCRA 825); PNOC v. CA,
GR No. 109976, 26 April 2005; BPI v. CIR, GR No. 174942, 7 March
2008
c. Determination of prescription of collection within CTAs appellate
jurisdiction: CIR v. Hambrecht and Quist Philippines, GR No. 169225, 27
November 2010

C. Remedies available to taxpayers

Before Payment
1. Protest (Section 228, NIRC)
a. Requirements of a valid protest Rev. Regs. 12-85
b. Kinds of Protest CIR v. Philippine Global Communication, GR No.
167146, 31 October 2006
c. Effect of Failure to file Protest CIR v. Hon. Gonzalez, GR No. 177279,
13 October 2010
d. What should be protested? Allied Banking Corporation v. CIR, 5
February 2010
e. Effect of a protest on the period to collect deficiency taxes Cases: CIR
v. Wyeth Suaco Laboratories, GR No. 76281, 30 September 1991 and
CIR v. Atlas Consolidated Mining, GR Nos. 31230-32, 14 February
2000
f. Failure if the BIR to act within the 180-day period See the following:
Lascona v. CIR, CTA Case 5777, 4 January 2000 vis--vis Section 7 (2),
RA 9282 and the Revised Rules of Procedure of the CTA, AM No. 05-11-
07-CTA; See also RCBC v. CIR (2007)
g. Administrative actions taken during the 180-day period Compare:
CIR v. Union Shipping, GR No. 66160, 21 May 1990, 185 SCRA 548
and CIR v. Isabela Cultural Corporation, GR No. 135210, 11 July 2001
h. Effect of a protest filed out of time Protectors Services v. CA, GR No.
118176, 12 April 2000
i. Remedies from a denial of the protest
Appeal to the Court of Tax Appeals (RA 1125, as amended by
RA9282)
Fishwealth Canning Corporation v. CTR, G.R. No. 179343, 21
January 2010
 Appeal to the CTA en bane should be preceded by a Motion for
Reconsideration (Commissioner of Customs v. Marina Sales, Inc.,
G.R. 183868, 22 November 2010 Note: although a customs case,
the ptrinciples are applicable)
2. Compromise

After Payment
1. Refund (Section 229, NIRC)
a. Must be strictly construed against the taxpayer; Taxpayer must
show the legal and factual basis for the tax refund Case:
Citibank, NA v. Court of Appeals, GR No. 107434, 10 October
1997, 280 SCRA 459; FEBTC v. CIR, GR No. 138919, 02 May
2006; Commissioner of Internal Revenue v. Far East Bank e
Trust Co., G.R. No. 173854 dated March 16, 2010
b. Grounds for filing a claim for refund (See Section 229, See also:
Engtek Phils v. CIR, CTA Case No. 6644, 26 January 2005)
c. Procedure in filing a claim for refund
CIR v. Acosta, GR No. 154068, 3 August 2007
d. Period within which to file a claim for refund
General rule is two years from the date of payment Cases:
ACCRA Investments Corporation v. Court of Appeals, GR
No. 96322, 20 December 1991; CIR v. TMX Sales, 15
January 1992; CIR v. PhilAm Life, 29 May 1995; CIR v. CA
and BPI, GR No. 117254, 21 January 1999; CIR v. PNB, GR
No. 161997, 25 October 2005 (exception to the 2-year
period); CIR v. Primetown Property Group, GR No. 162155,
28 August 2007).
Commissioner of Internal Revenue vs. San Roque Power
Corporation/Taganito Mining Corporation vs. Commissioner of
Internal Revenue/Philex Mining Corporation vs. Commissioner of
Internal Revenue, G.R. No. 187485/G.R. No. 196113/G.R. No.
197156. February 12, 2013
o
In case of amended returns
In case of taxpayers contemplating dissolution Case: BPI
v. CIR, 28 August 2001; See also: Sections 52(c) and 56(a)
In case of VAT Refund (Please see topic on VAT)
e. Who has the personality to file a claim for refund?
1. CIR v. Proctor and Gamble, GR No. 66838, 2 December
1991**
2. CIR v. CA 20 January 1999
3. Silkair v. CIR, GR Nos. 171383 e 172379, 14 November
2008
 4. CIR v. Smart Communications, GR No. 179045-46, 25
August 2010***
5. Exxonmobil Petroleum and Chemical Holdings v. CIR, GR
No. 180909, 19 January 2011
6. Silkair (Singapore) Pte., Ltd. v. Commissioner on Internal
Revenue, G.R. No. 166482, 25 January 2012***
f. Is setting-off of taxes against a pending claim for refund
allowed? The doctrine of equitable recoupmentCase: Philex
MiningCorp. V. CIR, GR No. 125704, 28 August 1998
g. Is automatic application of excess tax credits allowed? (Sec. 76)
Please see Calamba Steel v. CIR, GR No. 151857, 28 April
2005; Systra Philippines v. CIR, GR No. 176290, 21
September2007; CIR v. BPI, GR No. 178490, 07 July 2009
(Irrevocability Rule)***; Philam Asset Management v. CIR, G.R.
Nos. 156637/162004, December 14, 2005); Asianworld
Properties Philippine Corporation v. CIR, GR No. 171766, 29
July 2010; CIR v. Philam Life and Gen. Ins. Co. GR No. 175124,
29 September 2010; CIR v. Mcgeorge Food Industries, GR No.
174157, 20 October 2010; CIR v. Mirant (Philippnes) Operations
Corporation, G.R. No. 171742, 15 June 2011 CIR v. PL
Management Inernational Philippines, Inc., G.R. No. 160949,
April 4, 2011.
h. Effect of existing tax liability on a pending claim for refund
Case: CIR v. CA and Citytrust, GR No. 106611, 21 July 1994;
See also (CIR v. CItytrust Banking Corporation, 22 August, 22
August 2006).
i. Period of validity of a tax refund/credit (Sec. 230, NIRC)
i. Returns are not actionable documents for purposes of the
rules on civil procedure and evidence (See: Aguilar v. CIR,
CA Case dated 3- March 1990)
ii. Nature of a tax credit certificate (Pilipinas Shell
Petroleum Corporation v. CIR, GR No. 172598, 21
December 2007)
j. Refund and Protest are mutually exclusive remedies Case:
Vda. De San Agustin v. VIR, 10 September 2001
k. Is the taxpayer entitled to claim interest on the refunded tax?
(Sec. 79 (c) 2, NIRC)
Other Remedies
1. Action to Contest Forfeiture of Chattel (Sec. 231)
2. Redemption of Property Sold (Sec. 214)

D. Statutory offenses and penalties

E. Compromise and abatement of taxes

VII. Judicial Remedies (R.A. No. 1125, as amended, and the Revised Rules of
the
Court of Tax Appeals)