REMEDIES UNDER THE NIRC

A. Assessment and Collection of Internal Revenue Taxes

1. Tax Audit Process / Assessment Process

a. Overview
CIR vs. Fitness By Design, Inc., GR No. 215957 dated November 9, 2016
b. Letter of Authority / Audit Notice
Sec. 6(A) (as amended by RA 10963) and Sec. 13 of the NIRC
Revenue Audit Memorandum Order No. 1-00 (Service of Letter of Authority only)
Revenue Memorandum Order No. 43-90 dated September 20, 1990 (as cited in the SC Cases)
Revenue Memorandum Order No. 44-2010 dated May 12, 2010
Revenue Memorandum Order No. 69-2010 dated August 11, 2010
CIR vs. Sony Phils, Inc. G.R. No. 178697, November 17, 2010
CIR vs. De La Salle, GR No. 198841 dated November 9, 2016
Medicard Philippines, Inc. vs. CIR, GR No. 222743 dated April 5, 2017

c. Number of times a taxpayer may be audited

Sec. 235 of the NIRC

2. Preservation of Books of Accounts and tax records

Sec. 235 of the NIRC
RR No. 17-2013 dated September 27, 2013
RR No. 5-2014 dated July 30, 2014

3. Tax Assessment in General

CIR vs. Pascor Realty (GR No. 128315 dated June 29, 1999)
SMI-ED Technology Corporation, Inc. vs. CIR, GR No. 175410 dated November 12, 2014
CIR vs. Fitness By Design, Inc., GR No. 215957 dated November 9, 2016

4. Certain Powers of the Commissioner/BIR in relation to a tax audit/tax assessment:

a. Power to Obtain Information

Sec. 5(B)
Revenue Memorandum Circular No. 12-2018 dated February 22, 2018

b. Power of the Commissioner to assess deficiency tax / best evidence obtainable

Sec. 6(B) of the NIRC
Revenue Memorandum Circular No. 23-00 dated November 27, 2000
Bonifacia Sy Po vs. CTA (164 SCRA 524)
Fitness By Design, Inc. vs. CIR (GR No. 177982 dated October 17, 2008)

c. Power to issue Subpoena Duces Tecum

Secs. 5(C) and 266 of the NIRC
Revenue Memorandum Order No. 045-10 dated May 12, 2010
Revenue Memorandum Order No. 10-13 dated April 17, 2013
Revenue Memorandum Order No. 08-14 dated January 29, 2014
 d. Power to Inquire into Bank Deposit Accounts
Sec. 6(F) of the NIRC, as amended by RA No. 10021

B. Prescriptive period to assess and collect

1. Prescription in General
a. Rationale/Construction/Interpretation
Republic vs. Ablaza (108 Phil 1105)
b. Counting of periods (Art. 13 of NCC vs. Sec. 31 of Revised Admin Code)
CIR vs. Primetown Property Group (GR No. 162155, August 28, 2007)

2. Prescriptive period to Assess and Collect

a. Period for Assessment – General Rule/Ordinary Prescription
Sec. 203 of the NIRC
b. Period for Collection – General Rule
Sec. 222(c) of the NIRC

c. Matters that may affect the prescriptive period

1. Wrong Form/Return
Butuan Sawmill, Inc. vs. CTA (GR No. L-20601, February 28, 1966)
2. Amended Return
CIR vs. Phoenix (GR No. L-19727, May 20, 1965)
3. Defective Return
CIR vs. Gonzales (18 SCRA 757)

4. False Return, Fraudulent Return, Omission to File a Return/Extraordinary Prescription

Sec. 222(a) of the NIRC
Sec. 248(B) of the NIRC
Aznar vs. CTA (58 SCRA 519)
CIR vs. Asalus Corporation (GR No. 22150 dated February 22, 2017)
CIR vs. Philippine Daily Inquirer, Inc., (GR No. March 22, 2017)
CIR vs. Fitness By Design, Inc., (GR No. 215957 dated November 9, 2016)

5. Suspension of the prescriptive period

Secs. 223 and 91(B) of the NIRC
Republic vs. Ker (18 SCRA 208)
CIR vs. United Salvage and Towage (Phils.), Inc. (GR No. 197515 dated July 2, 2014) -
compare with Republic vs. Ker
Continental Micronesia, Inc. – Phil. Branch vs. CIR (CTA Case No. 6191, March 22, 2006)
BPI vs. CIR (GR No. 139736, October 17, 2005)
CIR vs. BASF Coating + Inks Phils., Inc. (GR No. 198677 dated November 26, 2014)

6. Waiver of the Statute of Limitations

New Requirements under RMO 14-2016 dated April 4, 2016
Phil. Journalists, Inc. vs. CIR (GR No. 162852, December 16, 2004)
CIR vs. Kudos Metal (GR No. 178087, May 5, 2010)
RCBC vs. CIR (GR No. 170257, September 7, 2011)
CIR vs. Next Mobile, Inc. (GR No. 212825 dated December 29, 2015)
Asian Transmission Corporation vs. CIR, GR No. 230861 dated September 19, 2018
 7. Estoppel
CIR vs. Suyoc (104 Phil. 819)

C. Requisites of a valid assessment

Sec. 228 of the NIRC
RR No. 12-99, as amended by RR No. 18-2013, further amended by RR No. 7-2018

1. Due Process and Pre-assessment Notice

Collector vs. Benipayo (4 SCRA 182)
CIR vs. Enron Subic (GR No. 166387 dated January 19, 2009)
CIR vs. Azucena T. Reyes (GR No. 159694, January 27, 2006)
A Brown Co., Inc. vs. CIR (CTA Case No. 6357, June 7, 2004)
CIR vs. Menguito (GR No. 167550, September 17, 2008)
CIR vs. Metro Star Superama, Inc., G.R. No. 185371, December 8, 2010
CIR vs. Asalus Corporation (GR No. 22150 dated February 22, 2017)
CIR vs. Fitness By Design, Inc., (GR No. 215957 dated November 9, 2016)
Samar-I Electric Cooperative vs. CIR, GR No. 193100 dated December 10, 2014

2. Modes of Service of Assessments

3. When Assessment Deemed made / Assessments sent by registered mail
Nava vs. CIR (GR No. L-19470, January 30, 1965)
Barcelon, Roxas Securities vs. CIR, (GR No. 157064, dated August 7, 2006)

D. Protesting an assessment

1. Reinvestigation vs. Reconsideration

RR No. 18-2013
BPI vs. CIR (GR No. 139736, October 17, 2005)
2. Contents of a valid protest
RR No. 18-2013
3. Protest against a PAN / FAN
Sec. 228 and RR No. 18-2013
4. Submission of relevant documents / 60-day period
RR No. 18-2013
Prulife of UK Insurance Corp vs. CIR (CTA Case No. 6774 dated September 11, 2007)
CIR vs. First Express Pawnshop (GR Nos. 172045-06 dated June 16, 2009)

E. Decision / Inaction on the Pending Protest

1. The 180-day period to Decide

Sec. 228
RR No. 18-2013

2. Final Decision on a Disputed Assessment (“FDDA”)

a. Contents of a Valid FDDA
RR No. 18-2013
CIR vs. Liquigaz Philippines Corporation, GR No. 215534 dated April 18, 2016
 3. Actions tantamount to a Denial of the Pending Protest
Oceanic Wireless Network, Inc. vs. CIR (GR No. 14380, dated December 9, 2005)
Advertising Associates vs. CA (133 SCRA 765)
CIR vs. Algue (158 SCRA 9)
Yabes vs. Flojo (GR No. L-46954, July 20, 1982)
CIR vs. Union Shipping (185 SCRA 547)
CIR vs. Isabela Cultural Corp. (GR No. 135210, July 11, 2001)

4. Inaction during the 180-day period / Appeal to the Court of Tax Appeals
Sec. 228
RR No. 18-2013
Revised Rules of the CTA, AM No. 05-11-07-CTA dated November 22, 2005, as amended on
September 16, 2008
Lascona Land vs. CIR (GR No. 171251, March 5, 2012)
RCBC vs. CIR (GR No. 168498, April 24, 2007)
PAGCOR vs. BIR, GR No. 208731 dated January 27, 2016
Fishwealth Canning Corp. vs. CIR (GR No. 179343 dated January 21, 2010)
Allied Banking Corporation vs. CIR (GR No. 175097 dated February 5, 2010)

5. Administrative Appeal with the CIR

RR No. 18-2013

6. Assessment Becomes Final and Executory for Failure to Protest /Appeal

RCBC vs. CIR (GR No. 168498, April 24, 2007)
Marcos II vs. CA (GR No. 120880 dated June 5, 1997)
Republic vs. Ker (18 SCRA 208)
Phil. Journalists, Inc. vs. CIR (GR No. 162852, December 16, 2004)
CIR vs. Metro Star Superama, Inc., G.R. No. 185371, December 8, 2010
CIR vs. Concepcion (22 SCRA 1058)

F. Collection / Remedies of the Government

1. Prescriptive period to collect

Secs. 222(c) and 222(a)

2. Administrative remedies / Summary Remedies

Secs. 205-217
Republic vs. Hizon (GR No. 130430. December 13, 1997)
CIR vs. Hambrecht & Quist Philippines, Inc. (GR No. 169225 November 17, 2010)

a. Distraint of personal property

Secs. 205-207, 217, 208-209, 210, 212, NIRC
Revenue Memorandum Circular No. 5-01 dated February 19, 2001

b. Levy of Real Property

Secs. 205-207, 217, 208-209, 213-214, NIRC
 c. Forfeiture
Sec. 215, NIRC
Castro vs. CIR (GR No. L-12174, April 26, 1962)

d. Tax lien
Sec. 219, NIRC

Republic vs. Enriquez (166 SCRA 608)

CIR vs. NLRC (238 SCRA 42)
Hong Kong Shanghai Bank vs. Rafferty (39 SCRA 145)

e. No injunction to restrain collection of taxes

Sec. 218, NIRC
Rule 10, Revised Rules of the CTA, AM No. 05-11-07-CTA dated November 22, 2005, as
amended on September 16, 2008
Revenue Memorandum Order No. 42-10 dated May 4, 2010.
Spouses Pacquiao vs. the CTA, GR No. 213394 dated April 6, 2016.
Tridharma Marketing Corporation vs. CTA, GR No. 215950 dated June 20, 2016

3. Judicial Remedies
Sec. 205
Secs. 220-221, NIRC
Republic vs. Hizon (GR No. 130430 December 13, 1997)
Fernandez Hermanos vs. CIR (GR No. L-21551, September 30, 1969)
PNOC vs. CIR (GR No. 109976, April 26, 2005)

G. Statutory Offenses and Penalties

1. Civil Penalties / Surcharge / Interest

Secs. 247-251, NIRC
RR No. 12-99, as amended by RR No. 18-2013

a. Mandatory Imposition of Penalties

Phil. Refining Co. vs. CA (GR No. 118794 dated May 8, 1996)
BPI vs. CIR (GR No. 137002, July 27, 2006)

b. 25% and 50% Surcharge

Sec. 248 and RR No. 12-99 as amended by 18-2013
Castro vs. CIR (GR No. L-12174, April 26, 1962)

c. Applicable Interest Rate

Sec. 249 as amended by RA 10963
RR No. 21-2018 dated September 14, 2018

d. When penalties may be waived

Lhuillier Pawnshop vs. CIR (GR No. 166786 dated September 11, 2006)

2. Crimes / Offenses / Penalties / Forfeitures

 Secs. 220-221, 224-226, NIRC
Secs. 253-281, NIRC
Revenue Memorandum Circular No. 101-90 dated November 26, 1990

a. Precondition before a criminal case may be filed

Ungab vs. Cusi (97 SCRA 877)
CIR vs. CA (257 SCRA 200)
CIR vs. Pascor Realty (GR No. 128315 dated June 29, 1999)

b. Compromise Penalty
a. Nature and enforcement
Revenue Memorandum Order No. 7-15 dated January22, 2015
CIR vs. Liangga Bay Logging (GR No. L-35266, January 21, 1991)

c. Elements of tax evasion

CIR vs. The Estate of Benigno Toda, Jr. (GR No. 147188, September 14, 2004)

d. Persons liable in case taxpayer is a juridical entity

e. Payment of tax in criminal cases
Sec. 253 (a), NIRC
Sec. 205 (b) last paragraph

Republic vs. Patanao (GR No. L-22356, July 21, 1967)

Castro vs. CIR (GR No. L-12174, April 26, 1962)

f. Probable Cause
BIR vs CA, GR No. 197590 dated November 25, 2015
g. Crimes under Secs. 254 and 255
h. Civil liability in criminal cases
People vs. Mendez (CTA Criminal Case Nos. O-013 &O-015, January 5, 2011)
People vs. Kintanar (CTA Criminal Case No. O-030 dated August11, 2010)
People vs. Santos (CTA Criminal Case No. O-012dated January16, 2013)
People vs. Spouses Castillo (CTA CTA Criminal Case No. O-219 dated October 7, 2013)

i. Prescription of violations of the NIRC

Lim vs. CA (190 SCRA 616)

H. Claims for refund and credit of taxes/Remedy AFTER payment

1. Basis of Tax Refunds

CIR vs. Acesite Phils. (GR No. 147295, February 16, 2007)

2. Taxpayer/withholding agent
CIR vs. Procter & Gamble (204 SCRA 377)
CIR vs. Smart Communications, Inc. (GR Nos. 179045-46, August 25, 2010)
Honda Cars Philippines, Inc. vs. Honda Cars Technical Specialist and Supervisors Union
(GR No. 204142 dated November 19, 2014)
 CIR vs. Philippine Associated Smelting and Refining Corporation, GR No. 186223 dated
October 1, 2014

3. Requisites for a valid claim for refund / Creditable Withholding Tax Cases
Koppel (Phils) vs. CIR (GR No. L-10550, September 19, 1961)
CIR vs. Meralco, GR No. 181459 dated June 9, 2014
CIR vs. Far East Bank GR No. 173854 March 15, 2010
CIR vs. Concepcion (22 SCRA 1058)
CIR vs. CA (234 SCRA 348)
PNB vs. CIR (GR No. 206019 dated March 18, 2015
CIR vs. PNB, GR No. 180290 dated September 29, 2014
CIR vs. Cebu Holdings, Inc., GR No. 189792 dated June 20, 2018

4. Refunds where written claim is not needed

Sec. 204 (3), NIRC
Sec. 229, NIRC
Vda de San Agustin vs. CIR, GR No. 138485, September 10, 2001

5. Refunds of Corporate taxpayers/Irrevocability Rule

Sec. 76, NIRC
ACCRA Investments vs. CA (204 SCRA 957)
CIR vs. TMX Sales (205 SCRA 184)
Systra Phils. Inc. vs. CIR (GR No. 176290, September 21, 2007)
Sithe Phils. Holdings vs. CIR (CTA Case No. 6274, April 4, 2003)
BPI-Family Savings Bank, Inc. vs. CA, CTA and CIR (GR No. 122480, April 12, 2000)
Philam Asset Management, Inc. vs. CIR (GR Nos. 156637/162004, December 14, 2005)
CIR vs. BPI (GR No. 178490, July 7, 2009)
Asia World Properties vs. CIR (GR No. 171766, July 29, 2010)
IMPSA Construction Corporation vs. CIR (CTA EB Case No. 685, May 24, 2011)
CIR vs. Rhombus Energy Incorporated (CTA EB Case No. 803, October 11, 2012)
Winbrenner & Inigo Insurance Brokers, Inc. (GR No. 206526 dated January 28, 2015)
Republic vs. Team (Phils.) Energy Corporation, (GR No. 188016 dated January 14, 2015) –
read also concurring opinion of CJ Sereno
University Physicians Services, Inc. – Management vs. CIR, GR No. 205955 dated March 7,
2018
Rhombus Energy, Inc. CIR, GR No. 206362 dated August 1, 2018

6. Rule in case of Merger/Corporate taxpayers contemplating dissolution

Sec. 52 (C), NIRC
BPI vs. CIR (GR No. 144653, August 28, 2001)

7. When 2 year period does not apply

CIR vs. PNB (GR No. 161997, October 25, 2005)

8. Remedy of the taxpayer

Sec. 229, NIRC
RA No. 9282, as amended by RA No. 9503
 Revised Rules of the CTA, AM No. 05-11-07-CTA dated November 22, 2005, as amended on
September 16, 2008

a. CIR renders a decision

b. CIR does not render a decision
c. Appeal to the CTA

9. Interest on Tax Refunds

BDO vs. Republic, GR No. 198756 dated August 16, 2016
Sec. 79(C)(2)

10. Issuance of Tax Credit Certificate

Secs.203 (C), 230, NIRC
RR No. 05-00 dated July 19, 2000
RR No. 14-11 dated July 29, 2011

a. Tax Credit, Tax Credit Certificate, Tax Debit Memo

b. Sources of Tax Credit
c. Uses of Tax Credit
d. Sale / Assignment of Tax Credit
e. Validity, Conversion and Validation
f. Forfeiture of Cash Refunds / Tax Credit

11. Erroneously Refunded Tax

Guagua Electric Light vs. CIR (GR No. L-23611, April 24, 1967)

I. The Court of Tax Appeals

RA No. 9282, as amended by RA No. 9503
Revised Rules of the CTA, AM No. 05-11-07-CTA dated November 22, 2005, as amended on
September 16, 2008

1. Why was the CTA created?

Philippine Refining Co. vs. CA (256 SCRA 661

2. Weight given to CTA decisions

3. Composition of the Court (No. of Divisions and Justices, the CTA En Banc)
4. Reversal of Decisions of CTA Division
5. Jurisdiction of CTA Division
a. Constitutionality/Validity of Regulations/Tax Laws
Philamlife vs. Secretary of Finance (GR No. 210987 dated November 24, 2014)
CIR vs. CTA and Petron Corporation, GR No. 207843 dated July 15, 2015
Banco De Oro vs. Republic (GR No. 198756, January 13, 2015) and resolution on the
Motion for reconsideration (GR No. 198756 dated August 16, 2016)

b. Civil/Criminal Cases
Adamson vs. CA (GR No. 120935, May 21, 2009)
CIR vs. Hambrecht & Quist Philippines, Inc., G.R. No. 169225, November 17, 2010
 City of Manila vs. Grecia-Cuerdo, GR No. 175723 dated February 4, 2014.
CIR vs. BPI, GR No. 224327 dated June 11, 2018
Gaw, Jr. vs. CIR, GR No. 222837 dated July 23, 2018

c. BIR vs. Government Agency

Power Sector Assets and Liabilities Management Corporation vs. CIR, GR No. 198146
dated August 8, 2017
CIR vs. Secretary of Justice, GR No. 209289 dated July 9, 2018

6. Jurisdiction of CTA EB
Asiatrust Development Bank, Inc. vs. CIR, GR No. April 19, 2017

7. Suspension of Collection of Tax

8. Appeal to the SC

J. Abatement of Tax / Tax Compromise

Secs. 7 and 204, NIRC
RR No. 13-01
RR No. 30-02
RR No. 8-04
RR No. 4-12
RR No. 9-13

A. Authority of CIR to abate taxes

1. Grounds for abating taxes and penalties
2. Conditions
Asiatrust Development Bank, Inc. vs. CIR, GR No. April 19, 2017

B. Power to compromise
1. Cases that can be compromised
2. Cases that cannot be compromised
3. Timing of payment of amount offered as compromise
4. Basis for acceptance of compromise settlement and rates
CIR vs. Azucena T. Reyes (GR No. 159694, January 27, 2006)