Marcos II v.

CA
G.R. No. 120880

Facts:
Petitioner Bongbong Marcos questions the actuations of the respondent CIR in assessing, and
collecting through the summary remedy of Levy on Real Properties, estate and income tax
delinquencies upon the estate and properties of his father, despite the pendency of the
proceedings on probate of the will of the late president.

A Special Tax Audit Team was created to conduct investigations and examinations of the tax
liabilities and obligations of the late president, as well as that of his family, associates and
"cronies".

The investigation disclosed that the Marcoses failed to file a written notice of the death of the
decedent, an estate tax returns, as well as several income tax returns covering the years 1982
to 1986, -all in violation of the NIRC.

The CIR thereby caused the preparation and filing of the Estate Tax Return for the estate of the
late president, the Income Tax Returns of the Spouses Marcos for the years 1985 to 1986, and
the Income Tax Returns of petitioner Ferdinand 'Bongbong' Marcos II for the years 1982 to
1985.

The BIR issued the following:

(1) Deficiency estate tax assessment  against the estate of the late president Ferdinand Marcos
in the amount of P23,293,607,638.00;

(2) Deficiency income tax assessment against the Spouses Ferdinand and Imelda Marcos in the
amounts of P149,551.70 and P184,009,737.40 representing deficiency income tax for the years
1985 and 1986;

(3) Deficiency income tax assessment against petitioner Ferdinand 'Bongbong' Marcos II in the
amounts of P258.70 pesos; P9,386.40 Pesos; P4,388.30 Pesos; and P6,376.60 Pesos
representing his deficiency income taxes for the years 1982 to 1985.

The CIR avers that copies of the deficiency estate and income tax assessments were all
personally and constructively served upon Imelda and Bongbong through their respective
caretakers at their last known addresses.

Thereafter, Formal Assessment notices were served upon Mrs. Marcos c/o petitioner, at his
office, House of Representatives, Batasan Pambansa, Quezon City. Moreover, a notice to
Taxpayer inviting Mrs. Marcos (or her duly authorized representative or counsel), to a
conference, was furnished the counsel of Mrs. Marcos, Dean Antonio Coronel - but to no avail.

The deficiency tax assessments were not protested administratively, by Mrs. Marcos and the
other heirs of the late president, within 30 days from service of said assessments.

The BIR Commissioner issued several notices of levy on real property against certain parcels of
land owned by the Marcoses - to satisfy the alleged estate tax and deficiency income taxes.
 The foregoing tax remedies were resorted to pursuant to Sections 205 and 213 of the NIRC.

Notices of sale at public auction were posted at the lobby of the City Hall of Tacloban City.
There being no bidder, the lots were declared forfeited in favor of the government.

Bongbong filed the instant petition for certiorari and prohibition under Rule 65 of the Rules of
Court, with prayer for temporary restraining order and/or writ of preliminary injunction."

Contentions:
Petitioner- posits that notices of levy, notices of sale, and subsequent sale of properties of the
late President Marcos effected by the BIR are null and void for disregarding the established
procedure for the enforcement of taxes due upon the estate of the deceased.

Domingo v. Garlitos "the ordinary procedure by which to settle claims of indebtedness against
the estate of a deceased, person, as in an inheritance (estate) tax, is for the claimant to present
a claim before the probate court so that said court may order the administrator to pay the
amount therefor." This remedy is allegedly, exclusive, and cannot be effected through any other
means.

Petitioner goes further, submitting that the probate court is not precluded from denying a
request by the government for the immediate payment of taxes, and should order the payment
of the same only within the period fixed by the probate court for the payment of all the debts of
the decedent. In this regard, petitioner cites the case of Collector of Internal Revenue vs. The
Administratrix of the Estate of Echarri (67 Phil 502), where it was held that:

“where during the pendency of judicial administration over the estate of a deceased person a
claim for taxes is presented by the government, the court has the authority to order payment by
the administrator; but, in the same way that it has authority to order payment or satisfaction, it
also has the negative authority to deny the same xxx”

BIR- that the state's authority to collect internal revenue taxes is paramount. Thus, the
pendency of probate proceedings over the estate of the deceased does not preclude the
assessment and collection, through summary remedies, of estate taxes over the same.

Claims for payment of estate and income taxes due and assessed after the death of the
decedent need not be presented in the form of a claim against the estate. These can and should
be paid immediately. The probate court is not the government agency to decide whether an
estate is liable for payment of estate of income taxes. Well-settled is the rule that the probate
court is a court with special and limited jurisdiction.

Issues:
(1)   WON the BIR has the authority to collect by the summary remedy of levying upon, and sale of
real properties of the decedent, estate tax deficiencies, without the cognition and authority of the
court sitting in probate over the supposed will of the deceased

(2)   WON the BIR's Notices of Levy on the Marcos properties, were issued beyond the allowed
period, and are therefore null and void

(3)   WON respondents' assessment of the estate tax and their issuance of the Notices of Levy and
sale are premature and oppressive.
(4)   WON there was sufficient service of Notices of Assessment to the petitioner,

(5)   WON Notices of Levy must be nullified for having been issued without validly serving copies
thereof to the petitioner.

Ruling:
(1) YES
The Government has two ways of collecting the taxes in question. One, by going after all the
heirs and collecting from each one of them the amount of the tax proportionate to the
inheritance received. Another remedy, pursuant to the lien created by Section 315 of the Tax
Code upon all property and rights to property belong to the taxpayer for unpaid income tax, is by
subjecting said property of the estate which is in the hands of an heir or transferee to the
payment of the tax due the estate.

From the foregoing, it is discernible that the approval of the court, sitting in probate, or as a
settlement tribunal over the deceased is not a mandatory requirement in the collection of estate
taxes. It cannot therefore be argued that the Tax Bureau erred in proceeding with the levying
and sale of the properties allegedly owned by the late President, on the ground that it was
required to seek first the probate court's sanction. There is nothing in the Tax Code, and in the
pertinent remedial laws that implies the necessity of the probate or estate settlement court's
approval of the state's claim for estate taxes, before the same can be enforced and collected.

On the contrary, under Section 87 of the NIRC, it is the probate or settlement court which is
bidden not to authorize the executor or judicial administrator of the decedent's estate to deliver
any distributive share to any party interested in the estate, unless it is shown a Certification by
the Commissioner of Internal Revenue that the estate taxes have been paid. This provision
disproves the petitioner's contention that it is the probate court which approves the assessment
and collection of the estate tax.

If there is any issue as to the validity of the BIR's decision to assess the estate taxes, this
should have been pursued through the proper administrative and judicial avenues provided for
by law.

"Sec. 229. Protesting of assessment.-When the Commissioner of Internal Revenue or his duly
authorized representative finds that proper taxes should be assessed, he shall first notify the
taxpayer of his findings. Within a period to be prescribed by implementing regulations, the
taxpayer shall be required to respond to said notice. If the taxpayer fails to respond, the
Commissioner shall issue an assessment based on his findings.

Such assessment may be protested administratively by filing a request for reconsideration or

reinvestigation in such form and manner as may be prescribed by implementing regulations
within (30) days from receipt of the assessment; otherwise, the assessment shall become final
and unappealable.

If the protest is denied in whole or in part, the individual, association or corporation adversely
affected by the decision on the protest may appeal to the Court of Tax Appeals within thirty (30)
days from receipt of said decision; otherwise, the decision shall become final, executory and
demandable. Apart from failing to file the required estate tax return within the time required for
the filing of the same, petitioner, and the other heirs never questioned the assessments served
upon them, allowing the same to lapse into finality, and prompting the BIR to collect the said
taxes by levying upon the properties left by President Marcos.
(2) NO
The Notices of Levy upon real property were issued within the prescriptive period and in
accordance with the provisions of the present Tax Code. The deficiency tax assessment, having
already become final, executory, and demandable, the same can now be collected through the
summary remedy of distraint or levy pursuant to Section 205 of the NIRC.

The applicable provision in regard to the prescriptive period for the assessment and collection of
tax deficiency in this instance is Article 223 of the NIRC, which pertinently provides:

"Sec. 223. Exceptions as to a period of limitation of assessment and collection of taxes.- (a) In
the case of a false or fraudulent return with intent to evade tax or of a failure to file a return, the
tax may be assessed, or a proceeding in court for the collection of such tax may be begun
without assessment, at any time within ten (10) years after the discovery of the falsity, fraud, or
omission: Provided, That, in a fraud assessment which has become final and executory, the fact
of fraud shall be judicially taken cognizance of in the civil or criminal action for the collection
thereof.
xxx
(c) Any internal revenue tax which has been assessed within the period of limitation above
prescribed, may be collected by distraint or levy or by a proceeding in court within three years
following the assessment of the tax.

The omission to file an estate tax return, and the subsequent failure to contest or appeal the
assessment made by the BIR is fatal to the petitioner's cause, as under the above-cited
provision, in case of failure to file a return, the tax may be assessed at any time within ten years
after the omission, and any tax so assessed may be collected by levy upon real property within
three years following the assessment of the tax.

Since the estate tax assessment had become final and unappealable by the petitioner's default
as regards protesting the validity of the said assessment, there is now no reason why the BIR
cannot continue with the collection of the said tax. Any objection against the assessment should
have been pursued following the avenue paved in Section 229 of the NIRC on protests on
assessments of internal revenue taxes.

(3) NO
Petitioner further argues that "the numerous pending court cases questioning the late
president's ownership or interests in several properties make the total value of his estate, and
the consequent estate tax due, incapable of exact pecuniary determination at this time.

Petitioner, however, omits to allege whether the properties levied upon by the BIR in the
collection of estate taxes upon the decedent's estate were among those involved in the said
cases pending in the Sandiganbayan. Indeed, the court is at a loss as to how these cases are
relevant to the matter at issue. The mere fact that the decedent has pending cases involving ill-
gotten wealth does not affect the enforcement of tax assessments over the properties
indubitably included in his estate.

It is not the Department of Justice which is the government agency tasked to determine the
amount of taxes due upon the subject estate, but the BIR whose determinations and
assessments are presumed correct and made in good faith. The taxpayer has the duty of
proving otherwise. In the absence of proof of any irregularities in the performance of official
duties, an assessment will not be disturbed.
In this instance, petitioner has not pointed out one single provision in the Memorandum of the
Special Audit Team which gave rise to the questioned assessment, which bears a trace of
falsity. Indeed, the petitioner's attack on the assessment bears mainly on the alleged
improbable and unconscionable amount of the taxes charged. But mere rhetoric cannot supply
the basis for the charge of impropriety of the assessments made.
Moreover, these objections to the assessments should have been raised, considering the ample
remedies afforded the taxpayer by the Tax Code, with the Bureau of Internal Revenue and the
Court of Tax Appeals, as described earlier, and cannot be raised now via Petition for Certiorari,
under the pretext of grave abuse of discretion.

The subject tax assessments having become final, executory and enforceable, the same can no
longer be contested by means of a disguised protest. In the main, Certiorari may not be used as
a substitute for a lost appeal or remedy.

(4) YES
We find, after considering the facts and circumstances, as well as evidences, that there was
sufficient, constructive and/or actual notice of assessments, levy and sale, sent to Bongbong as
well as to his mother.

Even if we are to rule out the notices of assessments personally given to the caretakers, the
subsequent notices given thereafter could no longer be ignored as they were sent at a time
when petitioner was already here in the Philippines, and at a place where said notices would
surely be called to petitioner's attention, and received by responsible persons of sufficient age
and discretion.

Thus, on October 20, 1992, formal assessment notices were served upon Mrs. Marcos c/o the
petitioner, at his office, House of Representatives, Batasan Pambansa, Q.C Moreover, a notice
to taxpayer dated October 8, 1992 inviting Mrs. Marcos to a conference relative to her tax
liabilities, was furnished the counsel of Mrs. Marcos - Dean Antonio Coronel

There being sufficient service of Notices to herein petitioner (and his mother) and it appearing
that petitioner continuously ignored said Notices despite several opportunities given him to file a
protest and to thereafter appeal to the Court of Tax Appeals, - the tax assessments subject of
this case, upon which the levy and sale of properties were based, could no longer be contested
(directly or indirectly) via this instant petition for certiorari."

(5) NO
Petitioner argues that as a mandatory heir of the decedent, he has an interest in the subject
estate, and notices of levy upon its properties should have been served upon him.

We do not agree. In the case of notices of levy issued to satisfy the delinquent estate tax, the
delinquent taxpayer is the Estate of the decedent, and not necessarily, and exclusively, the
petitioner as heir of the deceased. In the same vein, in the matter of income tax delinquency of
the late president and his spouse, petitioner is not the taxpayer liable. Thus, it follows that
service of notices of levy in satisfaction of these tax delinquencies upon the petitioner is not
required by law, as under

Section 213 of the NIRC, which pertinently states:

"xxx
...Levy shall be effected by writing upon said certificate a description of the property upon which
levy is made. At the same time, written notice of the levy shall be mailed to or served upon the
Register of Deeds of the province or city where the property is located and upon the delinquent
taxpayer, or if he be absent from the Philippines, to his agent or the manager of the business in
respect to which the liability arose, or if there be none, to the occupant of the property in
question.
xxx"

The foregoing notwithstanding, the record shows that notices of warrants of distraint and levy of
sale were furnished the counsel of petitioner on April 7, 1993, and June 10, 1993, and the
petitioner himself on April 12, 1993 at his office at the Batasang Pambansa.
Commissioner of Internal Revenue vs Pineda
No. L-22734, September 15, 1967

FACTS:
Respondent Manuel Pineda, as one of the heirs of the deceased Atanasio Pineda, received an
amount of P2500 from the estate of his deceased father as his share in the inheritance. The BIR
assessed the estate with income tax deficiency and made Manuel Pineda liable for the payment
of all the taxes due from the estate in the total amount of P760.28 instead of only for the amount
of taxes corresponding to his share in the estate.

ISSUE:
Can the Government require an heir to pay the full amount of the taxes assessed?

RULING:
Yes, an heir is liable but it cannot exceed the amount of his share. He is liable for the
assessment as an heir and as a holder-transferee of property belonging to the estate-taxpayer.
As an heir he is individually answerable for the part of the tax proportionate to the share he
received from the inheritance. As a holder of the property belonging to the estate, he is liable for
the tax up to the amount of the property in his possession. The Government has a lien on such
property. But after payment of such amount, he will have a right to contribution from his co-
heirs.
The Government has two ways of collecting the taxes in question:
1. By going after all the heirs and collecting from each one of them the amount of the tax
proportionate to the inheritance received; or
2. By subjecting said property of the estate which is in the hands of an heir or transferee to the
payment of the tax due the estate.
In this case, the BIR opted for the second remedy to collect the tax as it has the discretion to
avail the most expeditious way to collect the tax. Taxes are the lifeblood of the government and
their prompt and certain availability is an imperious need.
 PABLO LORENZO vs. JUAN POSADAS, JR.
G.R. No. L43082 June 18, 1937

Doctrine: The obligation to pay taxes rests not upon the privileges enjoyed by, or the
protection afforded to, a citizen by the government, but upon the necessity of money for
the support of the State. For this reason, no one is allowed to object to or resist the
payment of taxes solely because no personal benefit to him can be pointed out.
Summary: Lorenzo (trustee) filed with the CFI to recover the inheritance tax he paid in
protest to CIR Posadas. Posadas claims that the estate being included in the trust does
not exempt it from paying inheritance tax. The Court ruled that in agreement with
Posadas, Sec. 1544 (b), it is stated that the executor must pay the tax prior to transferring
the estate to the beneficiary, in other words, delivery to the trustee is delivery to the cesti
que trust (beneficiary), the trustee cannot deny that when he accepted, he therefore
acknowledged that the estate is not his. In addition, the court discussed that delaying the
collection due to a trust formed will lead to the abuse of the length prior to turnover.
Facts:
1.     One Thomas Hanley died, leaving a will.
2.     The CFI considered it proper for the best interests of the estate to appoint a trustee to
administer the real properties which, under the will, were to pass to Matthew Hanley ten years
after the two executors named in the will.
3.     Moore took his oath of office and acted as trustee until February 29, 1932, when he resigned
and the plaintiff herein was appointed in his stead.
4.     During the incumbency of the plaintiff as trustee, the defendant Collector of Internal Revenue,
alleging that the estate left by the deceased at the time of his death consisted of realty valued at
P27,920 and personalty valued at P1,465, and allowing a deduction of P480.81, assessed
against the estate an inheritance tax in the amount of P1,434.24.

Ruling:

(a)   When does the inheritance tax accrue and when must it be satisfied?

The accrual of the inheritance tax is distinct from the obligation to pay the same. Section
1536 as amended, of the Administrative Code, imposes the tax upon "every transmission by
virtue of inheritance, devise, bequest, gift mortis causa, or advance in anticipation of
inheritance, devise, or bequest." The tax therefore is upon transmission or the transfer or
devolution of property of a decedent, made effective by his death. It is in reality an excise or
privilege tax imposed on the right to succeed to, receive, or take property by or under a will or
the intestacy law, or deed, grant, or gift to become operative at or after death. According to
 article 657 of the Civil Code, "the rights to the succession of a person are transmitted from the
moment of his death."  The property belongs to the heirs at the moment of the death of the
ancestor as completely as if the ancestor had executed and delivered to them a deed for the
same before his death."
The authentication of a will implies its due execution but once probated and allowed the
transmission is effective as of the death of the testator in accordance with article 657 of the Civil
Code. Whatever may be the time when actual transmission of the inheritance takes place,
succession takes place in any event at the moment of the decedent's death. The time when the
heirs legally succeed to the inheritance may differ from the time when the heirs actually receive
such inheritance.
From the fact, however, that Thomas Hanley died on May 27, 1922, it does not follow
that the obligation to pay the tax arose as of the date.
SEC. 1544. When tax to be paid. — The tax fixed in this article shall be paid:
(b) In other cases, within the six months subsequent to the death of the predecessor; but
if judicial testamentary or intestate proceedings shall be instituted prior to the expiration of said
period, the payment shall be made by the executor or administrator before delivering to each
beneficiary his share.
            Under the subsection, the tax should have been paid before the delivery of the
properties in question to P. J. M. Moore as trustee on March 10, 1924.

(b)   Should the inheritance tax be computed on the basis of the value of the estate at the
time of the testator's death, or on its value ten years later?
If death is the generating source from which the power of the estate to impose
inheritance taxes takes its being and if, upon the death of the decedent, succession takes place
and the right of the estate to tax vests instantly, the tax should be measured by the value of the
estate as it stood at the time of the decedent's death, regardless of any subsequent contingency
value of any subsequent increase or decrease in value.
The transmission by inheritance is taxable at the time of the predecessor's death,
notwithstanding the postponement of the actual possession or enjoyment of the estate by the
beneficiary, and the tax measured by the value of the property transmitted at that time
regardless of its appreciation or depreciation.

(c)   In determining the net value of the estate subject to tax, is it proper to deduct the
compensation due to trustees?

A trustee, no doubt, is entitled to receive a fair compensation for his services. But from
this it does not follow that the compensation due him may lawfully be deducted in arriving at the
net value of the estate subject to tax. There is no statute in the Philippines which requires
trustees' commissions to be deducted in determining the net value of the estate subject to
 inheritance tax. Furthermore, though a testamentary trust has been created, it does not appear
that the testator intended that the duties of his executors and trustees should be separated. On
the contrary, in paragraph 5 of his will, the testator expressed the desire that his real estate be
handled and managed by his executors until the expiration of the period of ten years therein
provided. Judicial expenses are expenses of administration but, the compensation of a trustee,
earned, not in the administration of the estate, but in the management thereof for the benefit of
the legatees or devises, does not come properly within the class or reason for exempting
administration expenses. . . . Service rendered in that behalf have no reference to closing the
estate for the purpose of a distribution thereof to those entitled to it, and are not required or
essential to the perfection of the rights of the heirs or legatees. . . . Trusts . . . of the character
are created for the benefit of those to whom the property ultimately passes, are of voluntary
creation, and intended for the preservation of the estate. No sound reason is given to support
the contention that such expenses should be taken into consideration in fixing the value of the
estate for the purpose of this tax.

(d)   What law governs the case at bar? Should the provisions of Act No. 3606 favorable to
the taxpayer be given retroactive effect?

The defendant levied and assessed the inheritance tax due from the estate of Thomas Hanley
under the provisions of section 1544 of the Revised Administrative Code, as amended by
section 3 of Act No. 3606. But Act No. 3606 went into effect on January 1, 1930. It, therefore,
was not the law in force when the testator died on May 27, 1922. The law at the time was
section 1544 abovementioned, as amended by Act No. 3031, which took effect on March 9,
1922.
It is well settled that inheritance taxation is governed by the statute in force at the time of
the death of the decedent. The taxpayer cannot foresee and ought not to be required to guess
the outcome of pending measures. Of course, a tax statute may be made retroactive in its
operation. Liability for taxes under retroactive legislation has been "one of the incidents of social
life." "A statute should be considered as prospective in its operation, whether it enacts, amends,
or repeals an inheritance tax, unless the language of the statute clearly demands or expresses
that it shall have a retroactive Effect.

(e)   Has there been deliquency in the payment of the inheritance tax?

The mere failure to pay one's tax does not render one delinquent until and unless the
entire period has elapsed within which the taxpayer is authorized by law to make such payment
without being subjected to the payment of penalties for failure to pay his taxes within the
prescribed period.
The defendant maintains that it was the duty of the executor to pay the inheritance tax
before the delivery of the decedent's property to the trustee.
 P. J. M. Moore became trustee on March 10, 1924. On that date trust estate vested in
him. The mere fact that the estate of the deceased was placed in trust did not remove it from the
operation of our inheritance tax laws or exempt it from the payment of the inheritance tax. The
corresponding inheritance tax should have been paid on or before March 10, 1924, to escape
the penalties of the laws. This is so for the reason already stated that the delivery of the estate
to the trustee was in essence delivery of the same estate to the cestui que trust, the beneficiary
in this case. A trustee is but an instrument or agent for the cestui que trust. When Moore
accepted the trust and took possession of the trust estate he thereby admitted that the estate
belonged not to him but to his cestui que trust. He did not acquire any beneficial interest in the
estate. He took such legal estate only as the proper execution of the trust required and, his
estate ceased upon the fulfillment of the testator's wishes. The estate then vested absolutely in
the beneficiary.
No one is allowed to object to or resist the payment of taxes solely because no personal
benefit to him can be pointed out.
The delinquency in payment occurred on March 10, 1924, the date when Moore became
trustee. The interest due should be computed from that date and it is error on the part of the
defendant to compute it one month later.
 Rafael Dizon vs. CTA and CIR
G.R. No. 140944 April 30, 2008

Facts:
1.     On November 7, 1987, Jose P. Fernandez died.
2.     Thereafter, a petition for the probate of his will was filed.
3.     The probate court then appointed retired Supreme Court Justice Arsenio P. Dizon and
petitioner, Atty. Rafael Arsenio P. Dizon as Special and Assistant Special Administrator.
4.     Justice Dizon authorized Atty. Jesus M. Gonzales (Atty. Gonzales) to sign and file on behalf of
the Estate the required estate tax return and to represent the same in securing a Certificate of
Tax Clearance.
5.     On April 27, 1990, BIR Regional Director issued Certification stating that the taxes due on the
transfer of real and personal properties of Jose had been fully paid and said properties may be
transferred to his heirs.
6.     Petitioner requested the probate court's authority to sell several properties forming part of the
Estate, for the purpose of paying its creditors.
7.     Petitioner manifested that Manila Bank, a major creditor of the Estate was not included, as it
did not file a claim with the probate court since it had security over several real estate properties
forming part of the Estate.
8.     However, on November 26, 1991, the Assistant Commissioner for Collection of the BIR, issued
Estate Tax Assessment Notice demanding the payment of P66,973,985.40 as deficiency estate
tax.

Issue:
            Whether the actual claims of the creditors may be fully allowed as deductions from the
gross estate of Jose despite the fact that the said claims were reduced or condoned through
compromise agreements entered into by the Estate with its creditors

Ruling:
            It is admitted that the claims of the Estate's aforementioned creditors have been
condoned - mode of extinguishing an obligation.
            The U.S. court ruled that the appropriate deduction is the value that the claim had at the
date of the decedent's death. Also, as held in Propstra v. U.S., where a lien claimed against the
estate was certain and enforceable on the date of the decedent's death, the fact that the
claimant subsequently settled for lesser amount did not preclude the estate from deducting the
entire amount of the claim for estate tax purposes. These pronouncements essentially confirm
the general principle that post-death developments are not material in determining the amount
of the deduction.
            The court expresses its agreement with the date-of-death valuation rule.
First. There is no law, nor do we discern any legislative intent in our tax laws, which
disregard the date-of-death valuation principle and particularly provide that post-death
developments must be considered in determining the net value of the estate. It bears emphasis
that tax burdens are not to be imposed, nor presumed to be imposed, beyond what the statute
expressly and clearly imports, tax statutes being construed strictissimi juris against the
government. Any doubt on whether a person, article or activity is taxable is generally resolved
against taxation.
Second. Such construction finds relevance and consistency in our Rules on Special
Proceedings wherein the term "claims" required to be presented against a decedent's estate is
generally construed to mean debts or demands of a pecuniary nature which could have been
enforced against the deceased in his lifetime, or liability contracted by the deceased before his
death.
 Therefore, the claims existing at the time of death are significant to, and should be made
the basis of, the determination of allowable deductions.