BELTRAN, JOANNA MAE M.
BSA- 3
INCOTAX ASSIGNMENT 2
1. Is the BIR correct to reject Habhab’s contention because its investigation indeed revealed
material understatement on its gross sales or receipts? Discuss your answer.
•
Yes, Under The Tax Code of 1997 empowers the Commissioner of Internal Revenue to
suspend the business operations of a taxpayer on certain grounds such as,
Understatement of taxable sales or receipts by thirty percent (30%) or more of his
correct taxable sales or receipts for the taxable quarter.
2. With the foregoing case, can Habhab file for an application to compromise the payment
of its tax liabilities due to bankruptcy? What is required from Habhab?
•
Yes, Habhab is required to submit these followings:
➢ Duly filled-up Application for Compromise Settlement (BIR Form No. 2107)
➢ Latest Income Tax Return filed together with the latest audited Financial
Statements for the last three (3) years
➢ Certificate of Property Holdings from the Municipal, Provincial and City Assessor
or the Register of Deeds
➢ Certification from the barangay and city or municipal licensing office on the
status of the taxpayer's business (closed, ceased operations, retired,
active/inactive)
➢ Waiver of Secrecy of Bank Deposits pursuant to the provisions of the Bank
Secrecy Act under RA No. 1405, in case of financial incapacity to pay the tax
liabilities and increments
➢ Sworn Statement or Affidavit of no unutilized Tax Credit Certificate on-hand or
pending claim or application for tax credit/refund
➢ Waiver of the Defense of the Statute of Limitation for the collection of the
accounts receivable