ACCT 183- ATTY. MACUMBAL
1. POWERS & AUTHORITY OF
COMMISSIONER OF INTERNAL
REVENUE
2.
TA X R E M E D I E S
3 . E X PA N D E D J U R I S D I C T I O N O F C TA
ATTY. HANIMAI I. MACUMBAL, CPA
ACCT 183
MSU-MARAWI
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ACCT 183- ATTY. MACUMBAL
O R G A N I Z AT I O N
AND
FUNCTIONS OF
THE BUREAU OF
INTERNAL
REVENUE
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ACCT 183- ATTY. MACUMBAL
RULE-MAKING AUTHORITY OF
S E C R E TA RY O F F I N A N C E
• The Secretary of Finance, upon recommendation of the
Commissioner, shall promulgate all needful rules and regulations for
the effective enforcement of the provisions of NIRC (Sec. 244,
NIRC).
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ACCT 183- ATTY. MACUMBAL
J UR I SDI C TI O N, POW ER ,
AND FUNCTIONS OF
THE COMMISSIONER OF
INTERNAL REVENUE
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ACCT 183- ATTY. MACUMBAL
• Assessment and collection of all national internal revenue taxes,
fees and charges;
• Enforcement of all forfeitures, penalties and fines;
POWERS &
DUTIES OF
THE BIR
• Execution of judgments in all cases decided in its
• favor (by the CTA and regular courts);
• Give effect and administer the supervisory and
• police powers conferred to it by the NIRC and other
• laws;
• Recommend to the Secretary of Finance all needful
• rules and regulations for the effective enforcement of the
provision of the NIRC.
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ACCT 183- ATTY. MACUMBAL
The BIR is headed by the CIR and 6 Deputy Commissioners,
who lead the following divisions:
Operations group
Legal Inspection Group
CHIEF
OFFICIALS
OF THE BIR
Resource and Management Group
Information Systems Group
Prosecution Group
Special Concerns Group
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ACCT 183- ATTY. MACUMBAL
1. Power to interpret tax laws
and to decide cases (Sec. 4,
NIRC);
POWERS OF
THE
COMMISSIONER
2. Power to obtain information
and to summon/examine and
take testimony of persons
(Sec. 5, NIRC);
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ACCT 183- ATTY. MACUMBAL
W H AT A R E T H E P U R P O S E S O F
THESE POWERS?
• To ascertain correctness of the return;
• To make a return when none has been made;
• To determine liability of any person for any
• internal revenue tax;
• To collect such liability;
• To evaluate tax compliance.
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ACCT 183- ATTY. MACUMBAL
SCOPE OF SUCH POWERS
1. To examine any book, paper, record or other data which may be relevant or
material to such inquiry;
2. To obtain any information (costs, volume of production, receipts, sales, gross
income) on a regular basis, from any person other than the person under
investigation and any office or officer of the national/local government;
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ACCT 183- ATTY. MACUMBAL
SCOPE OF SUCH POWERS
• To summon the following to produce records and to give testimony:
1. The person liable for tax or required to file a return;
2. Any officer or employee of such person;
3. Any person having in his possession, custody and care the books of
accounts, accounting records of entries related to the business of such
taxpayer.
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ACCT 183- ATTY. MACUMBAL
SCOPE OF SUCH POWERS
1. Power to make assessments and prescribe additional requirements for tax
administration and enforcement (Sec. 6, NIRC);
2. Power to assign internal revenue officers and other employees (Secs. 16 and 17,
NIRC);
3. Power to suspend the business operations of a taxpayer for vialations of VAT
rules
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ACCT 183- ATTY. MACUMBAL
ASSESSMENT
• Kinds of assessments:
• 1. Self assessment (Section 56[A], NIRC) – When the taxpayer computes his
own liability, files his return and pays the tax based on his computation
• 2. Deficiency assessment (Section 56[B], NIRC) – this occurs upon discovery of
the BIR that the self- assessment was either deficient or when no return was
made by the taxpayer (Ingles, 2015).
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ACCT 183- ATTY. MACUMBAL
Q : D O A L L T Y P E S O F TA X E S
REQUIRE ISSUANCE OF
ASSESSMENT?
• GENERAL RULE:
• GR: Internal Revenue Taxes are self-assessing and do not require the issuance of an assessment
notice in order to establish the tax liability of a taxpayer (Tupaz v.Ulep, 316 SCRA 118). The
NIRC follows the pay-as-you-file system of taxation under which the taxpayer computes his own
tax liability, prepares the return, and pays the tax as he files the return.
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ACCT 183- ATTY. MACUMBAL
E XC E P T I O N :
• XPNs:
1. When the taxable period of a taxpayer is terminated (Sec. 6 [D], NIRC)
2. In case of deficiency tax liability arising from a tax audit conducted by the BIR (Sec. 56 [B],
NIRC)
3. Tax lien (Sec. 219, NIRC)
4. Dissolving corporation (Sec. 52 [c], NIRC)
5. Improperly Accumulated Earnings Tax (Sec. 29, NIRC)
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ACCT 183- ATTY. MACUMBAL
TA X R E M E D I E S
U N D E R N I RC
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ACCT 183- ATTY. MACUMBAL
REMEDIES
OF
TA X P AY E R
• These are legal actions which a taxpayer can
avail to seek relief from the undue burden or
oppressive effect of tax laws, or as means to
check possible excesses by revenue officers in
the performance of their duties.
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ACCT 183- ATTY. MACUMBAL
REMEDIES
OF THE
GOVERNMENT
•These are courses of action
provided or allowed in the
law to implement the tax
laws or enforce tax
collection.
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ACCT 183- ATTY. MACUMBAL
REMEDIES OF THE
TA X P AY E R
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ACCT 183- ATTY. MACUMBAL
( 1 ) A D M I N I S T R AT I V E P R O T E S T
• The taxpayer or its authorized representative or tax agent may protest
administratively against the aforesaid FLD/FAN within thirty (30) days from date
of receipt thereof.
• Administrative protest is the act by the taxpayer of questioning the validity of
the imposition of the corresponding delinquency increments for internal revenue
taxes as shown in the notice of assessment and letter of demand.
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ACCT 183- ATTY. MACUMBAL
A. REQUEST FOR
R E C O N S I D E R AT I O N
• refers to a plea of re-evaluation of an assessment on the
basis of existing records without need of additional
evidence. It may involve both a question of fact or of law or
both.
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ACCT 183- ATTY. MACUMBAL
B. REQUEST FOR
R E I N V E S T I G AT I O N
• refers to a plea of re-evaluation of an assessment on the basis of newly
discovered or additional evidence that a taxpayer intends to present in the
reinvestigation. It may also involve a question of fact or of law or both.
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ACCT 183- ATTY. MACUMBAL
E F F E C T O F FA I L U R E TO F I L E
P ROT E S T
• If the taxpayer fails to file a valid protest against the FLD/FAN within
thirty (30) days from date of receipt thereof, the assessment shall
become final, executory and demandable. No request for
reconsideration or reinvestigation shall be granted on tax
assessments that have already become final, executory and
demandable
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ACCT 183- ATTY. MACUMBAL
( 2 ) C O M P RO M I S E
• In case of tax assessment, compromise is the contract between the
government and the taxpayer to setlle the liability.
• Court cannot compel the CIR to compromise in cases when such is
allowed, in order to assure that no improper compromise is made to
the prejudice of the Government.
•
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ACCT 183- ATTY. MACUMBAL
C O M P R O M I S E V S ( 3 ) A B AT E M E N T
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ACCT 183- ATTY. MACUMBAL
TA X R E F U N D & TA X C R E D I T
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ACCT 183- ATTY. MACUMBAL
JUDICIAL REMEDIES
• Taxpayer’s remedy in case of denial of claim for refund
• The taxpayer may appeal to CTA in case of denial by CIR of the
claim for refund. It must be filed within 30 days from receipt of the
decision of the CIR but not to exceed the 2-year period from date of
payment of the tax or penalty regardless of any supervening cause
that may arise after payment.
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ACCT 183- ATTY. MACUMBAL
REMEDIES OF THE
G OVERNMENT
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ACCT 183- ATTY. MACUMBAL
( 1 ) TA X L I E N
• It is a legal claim or charge on property, personal or real, established
by law as a sort of security for the payment of tax obligations (HSBC
v. Rafferty, 39 Phil. 145).
• Tax in itself is not a lien even upon the property against which it is
assessed, unless expressly made so by statute.
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ACCT 183- ATTY. MACUMBAL
(2)DISTRAINT & LEVY
• Distraint is a summary remedy in which the collection of tax is
enforced on the taxpayer’s personal property. When enforced to
taxpayer’s personal property not in his possession, it is called
garnishment. Meanwhile, levy is enforced on real property.
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ACCT 183- ATTY. MACUMBAL
GARNISHMENT
• It is the taking of personal properties, cash or sums of money owned
by a delinquent taxpayer which is in the possession of a third party
(i.e. bank accounts.) Bank accounts are garnished by serving a
warrant upon the taxpayer and upon the president, manager,
treasurer, or other responsible officer of the bank.
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ACCT 183- ATTY. MACUMBAL
(3) FORFEITURE OF REAL
P RO P E RT Y
• It is the divestiture of property without compensation, in
consequence of a default or offense. It transfers the title to the
specific thing from the owner to the government. Also, there would
no longer be any further levy for such would be for the total
satisfaction of the tax due.
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ACCT 183- ATTY. MACUMBAL
(4) SUSPENSION OF BUSINESS
O P E R AT I O N
The CIR or his authorized representative is empowered to suspend the business operations and
temporarily close the business establishment of any person for any of the following violations:
In the case of VAT-registered person:
1. Failure to issue receipts or invoices;
2. Failure to file a VAT return as required under Sec. 114; or understatement of taxable sales or
receipts by 30% or more of his correct taxable sales or receipts for the taxable quarter.
2. Failure of any person to Register as required under Sec. 236: The temporary closure of the
establishment shall be for the duration of not less than 5 days and shall be lifted only upon
compliance with whatever requirements prescribed by the CIR in the closure order (Sec. 115 NIRC).
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ACCT 183- ATTY. MACUMBAL
( 5 ) N O N - AVA I L A B I L I T Y O F
I N J U N C T I O N TO R E S T R A I N
C O L L E C T I O N O F TA X
• No court shall have the authority to grant an injunction to restrain
the collection of any national internal revenue, tax, fee or charge
(Sec. 219, R.A. 8424).
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ACCT 183- ATTY. MACUMBAL
JUDICIAL REMEDIES
• Ordinary civil action
• Criminal action
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ACCT 183- ATTY. MACUMBAL
A P P ROVA L O F T H E C O M M I S S I O N E R
• No civil or criminal action for the recovery of taxes or the
enforcement of any fine, penalty or forfeiture under the
NIRC shall be filed in court without the approval of the CIR
(Sec. 220 NIRC).
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ACCT 183- ATTY. MACUMBAL
(1) CIVIL ACTIONS
• For tax remedy purposes, these are actions instituted by the
government to collect internal revenue taxes in the regular courts
after assessment by CIR has become final and executory.
• It includes the filing by the government of claims against the
deceased taxpayer with the probate court.
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ACCT 183- ATTY. MACUMBAL
(2) CRIMINAL ACTIONS
• Criminal complaint is instituted to penalize taxpayer for the violation of the
NIRC, and not to demand payment (CIR vs. PASCOR Realty and Development
Corporation).
• The judgment in the criminal case shall not only impose the penalty but shall
also order payment of the taxes subject of the criminal case as finally decided by
the CIR (Sec 205, NIRC). Thus, a criminal action for violation of the NIRC
constitutes a collection method.
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ACCT 183- ATTY. MACUMBAL
TWO COMMON CRIMES PUNISHABLE
U N D E R T H E N I RC
1. Attempt
to evade or defeat tax. The conviction or acquittal obtained
under this Section shall not be a bar to the filing of a civil suit for the
collection of taxes (Sec. 254, NIRC).
2. Failure to file return, supply correct and accurate information, pay
tax, withhold and remit tax and refund excess taxes withheld on
compensation (Sec. 255, NIRC).
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ACCT 183- ATTY. MACUMBAL
E X PA N D E D
JURISDICTION
O F C TA
• RA 9282, which took effect on April 23,
2004, expanded the jurisdiction of the
CTA to include, among others, the
power to review by appeal decisions,
orders or resolutions of the RTC in local
tax cases originally decided or resolved
by them in the exercise of their original
or appellate jurisdiction.
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ACCT 183- ATTY. MACUMBAL
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