Tax Assessment

TAX ASSESSMENT
Presented by:
ATTY. JULIE MAE S. AGUILAR, CPA
AMEGO & ASSOCIATES LAW OFFICE
Ground Floor CIT Bldg., Lacson-Luzuriaga Sts.
Bacolod City
Letter of Authority
Pre-Assessment Notice (PAN)

Reply to PAN: 15 days from receipt of PAN
Final Assessment Notice (FAN)

Protest-30 days from receipt of FAN
Complete submission of supporting documents
within 60 days from filing of Protest
Protest
30 days
Appeal to CTA Division

30 days
MR to CTA Division
15 days
Appeal to CTA En Banc
15 days
Petition for Review to SC
A tax investigation starts with the
Letter of Authority/ issuance by the BIR of a
Letter Notice
written authorization which is usually a
 Letter of Authority – for tax audits or
 Letter Notice – for the Relief/Summary List of Sales and
Purchases for VAT taxpayers
Preliminary Assessment Notice (PAN)
− Notifies the taxpayer of the Issuance of FAN is sufficient w/o need of Notice of
findings made by the examiner and Informal Conference & PAN:
the deficiency taxes assessed 1. Deficiency tax is the result of mathematical error
− shows in detail, the facts and the in the tax computation appearing on the face of
law, rules and regulations, or the tax return filed by the taxpayer;
jurisprudence on which the 2. Discrepancy between the tax withheld and the
proposed assessment is based.
amount actually remitted by the withholding
agent;
Time for taxpayer to reply: 3. A taxpayer who opted to claim a refund or tax
15 days from date of receipt of PAN
credit also carried over and automatically applied
Effect of failure to reply: the same amount claimed against the estimated
-Taxpayer shall be considered in tax liabilities for the taxable quarter/s of the
default succeeding taxable year;
-a formal letter of demand and 4. Excise tax due on excisable articles not paid;
assessment notice shall be issued 5. Article purchased locally or imported by an
calling for the payment of the
exempt person, such as, but not limited to,
taxpayer’s deficiency tax liability,
vehicles, capital equipment, machineries & spare
inclusive of all the applicable
parts, has been sold, traded or transferred to
penalties.
non-exempt persons.
Taxpayer
submits a NO
PAN reply within 15
days?
YES
Commissioner Commissioner
accepts the does not accept
explanations. the explanations.
Issuance of
FAN
&
Assessment ends. LETTER of DEMAND
 FAN and letter of demand should always go together.
 The letter of demand explains to the taxpayer how the deficiency assessment was
arrived at, including the reasons and legal bases for the assessment.
Sent to the taxpayer only by registered mail or by personal delivery.
 If sent by personal delivery, acknowledge receipt thereof in the duplicate copy of
the letter of demand by showing the following: (a) his name; (b) signature; (c)
designation and authority to act for and in behalf of the taxpayer, if received by a
person other than the taxpayer himself; and (d) date of receipt thereof.
Remedy of the taxpayer against the FAN : Time for taxpayer to submit Protest:
File Administrative PROTEST 30 days from date of receipt of FAN
Effect of failure to Protest:
-Payment by the TP of the amount due
2 Types of Administrative Protest Against the FAN:
Request for reconsideration –a plea of reevaluation of the assessment
on the basis of existing records without need of additional evidence.
Request for reinvestigation – a plea of reevaluation of an assessment
on the basis of newly discovered or additional evidence that a taxpayer
intends to present in the reinvestigation.
The Protest may involve a question of fact or law, or both.
Taxpayer
FAN submits a
PROTEST YES
&
LETTER of within 30
DEMAND days?
NO Administrative Protest
MOTION for
Assessment ends. RECONSIDERATION or
Assessment becomes final, executory, and MOTION for
demandable. REINVESTIGATION
The government may exercise it remedies
for collection.
The case may not be appealed to the CTA.
Complete submission of
documentary evidence
Non-submission within 60 days from the
filing of the protest
of documents
Complete Taxpayer FAILS to ASSESSMENT
submission of Commissioner’s appeal. ENDS.
documents action:
Resolution of the assessment

based on the documents: PETITION FOR REVIEW
- Cancellation of entire assessment/ to the SC
- Issuance of a Revised Assessment
Inaction on the protest

w/in 180 days from
Appeal to the
the time of receipt
of the relevant documents CTA EN BANC
Denial of the administrative File a MR to the

Commissioner
protest within 180 days Motion for Recon
from the receipt of the or to the
relevant supporting Appeal to the CTA Division
documents CTA Division
Unfavorable Action DENIAL
of the Commissioner or
INACTION
30 days
in support of his protest
Appeal to the date of submission by the taxpayer of the required documents
CTA Division  Inacton: w/in 30 days from the lapse of the 180 days from
15 days  Denial : w/in 30 days from receipt of notice of the denial or
Motion for Recon

CTA appeal from the decision of the CIR :
to the
SHALL NOT SUSPEND the payment, levy, distraint, and/or
CTA Division
sale of any property of the taxpayer for the satisfaction of
15 days his tax liability.
Appeal to the If in the opinion of the Court the collecton by BIR may
CTA EN BANC jeopardize the interest of the Government and/or the
taxpayer:
15 days  the Court any stage of the proceeding may suspend the
collection and
PETITION FOR REVIEW  require the taxpayer either
to the SC −to deposit the amount claimed or
−to file a surety bond for not more than double the amount
with the Court
Pre-Assessment Notice (PAN)
15 days
30 days
Protest
30 days
Appeal to CTA Division

30 days
MR to CTA Division
15 days
Appeal to CTA En Banc
15 days
Petition for Review to SC
Thank you.
- THE END -

Tax Assessment

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TAX ASSESSMENT

Pre-Assessment Notice (PAN)

Final Assessment Notice (FAN)

Appeal to CTA Division

Resolution of the assessment

Inaction on the protest

Denial of the administrative File a MR to the

15 days  Denial : w/in 30 days from receipt of notice of the denial or

Motion for Recon

Appeal to CTA Division

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