Week 3:

Tax Administration Part II

Module 3
 Week 3: Tax Administration II

Learning Objectives:

1.Define Tax Administration

2.Give Tax Agencies
3.Enumerate the Power, Duties and
Responsibilities of Bureau of Internal
Revenue and its commissioner
4.Give meaning to Tax Credit Certificate
 Week 3: Tax Administration II

Learning Objectives:

5.Provide the efficient and effective

collection through Administrative
Provisions
6.Show the Tax Remedies and
Assessment Procedure;
7.Provide insights about the Collection of
Taxes
 Week 3: Tax Administration II

Posting of Bonds
In cases where the computation of
required actual tax payment is be not
readily done, and will cause delays, an
agreement shall the effect that a bond is
secured instead of assuring Gf tax that
may still be due.
 Week 3: Tax Administration II

Exporter's Bond
Exporters of good that would be subject
to excise tax, if sold or: removed for
consumption in the Philippines, shall
submit proof' of exportation satisfactory
to the Commissioner.
 Week 3: Tax Administration II

Informer’s Reward
For voluntary sworn information given to
the BIR which leads to the discovery of
frauds thereby resulting in revenue
recoveries, 10% of such amount
recovered may be rewarded to the
informer.
 Week 3: Tax Administration II
Civil Action Criminal Action
is one that is brought to is a penal prosecution. It is
enforce, redress or protect an action, suit or cause
private rights. In general, all instituted to punish an
types of legal actions other infraction of the criminal
than criminal proceedings laws.
are civil actions.
 Week 3: Tax Administration II

Tax Crime
is committed when the violator has
knowingly and willfully filed a fraudulent
return or neglected to file a return with
intent to evade the tax.
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Surcharges
The payment of surcharge is mandatory
and the BIR is not vested with any
authority to waive the collection thereof.
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Simple Neglect Willful Neglect
A simple neglect surcharge A willful neglect surcharge
of twenty-five percent in of fifty percent in addition to
addition to tax assessed to tax assessed to be paid shall
be paid shall be imposed be imposed
 Week 3: Tax Administration II
Delinquency Deficiency
is the nonpayment of tax on is the amount still due and
time after issuance of FLD collectible from the taxpayer
and FAN upon audit or investigation
 Deficiency Interest Delinquency
Interest
Imposed On Shortage of the Imposed on the
taxes that delay in payment of
taxes due as
Should have been
provided in the
paid
FAN

Compound From From the date From the due date

prescribed for its appearing in the
FAN until full
Payment until full
payment of the tax payment of the tax
due, surcharge and
due
deficiency interest
 Week 3: Tax Administration II

Penalty on Criminal Offenses

1.If the offender is an alien, he shall be
deported immediately deportation'
after serving the sentence without
further proceedings of deportation;
 Week 3: Tax Administration II

Penalty on Criminal Offenses

2. The offender is a public officer or
employee, the maximum penalty
prescribed for the offense shall be
imposed.
 Week 3: Tax Administration II

Penalty on Criminal Offenses

3. If the offender is a CPA, his CPA
certificate shall be automatically
revoked or cancelled upon conviction
 Week 3: Tax Administration II

Penalty on Criminal Offenses

4. In the case of associations,
partnerships or corporations and
employees responsible for the
violation
 Week 3: Tax Administration II

Other Penalties
One thousand pesos (P1,000) for each
failure, provided that the aggregate
amount to be imposed for all such failures
during the calendar year shall not exceed
twenty-five thousand pesos (P25,000).
Tax Return Assessment Period Collection Period
Filed
Regular Within three (3) years from five (5) years from assessment
return filing of return (Sec. 203, (BPI vs. CIR, G.R. No. 139736,
NIRC) 473 SCRA 205)
or
Within three (3) years from Within five (5) years from the
filing of return(Sec. 203, assessment (Sec. 222, [d] NIRC)
NIRC)
Fraudulent, Within ten (10) years from Within five (5) years from the
false, or the discovery of fraud, assessment (Sec. 222, [c] NIRC)
falsity, or omission (Sec.
failure to file Court proceeding for tax
222, [a] MRC)
return collection within ten (10) years
Or from the discovery of fraud,
falsity, or omission (Sec. 222, [a]
Without assessment (Sec.
NIRC)
222, [a] NIRC)
Remedies A person adversely affected by the action
taken by the BIR can avail of the

to taxpayer
administrative and judicial remedies to
question the enforcement of tax collection.
 Week 3: Tax Administration II

Administrative Remedies
1. Tax Avoidance - Before the payment of
tax, the taxpayer can reduce, or totally
escape the payment of tax through
legally permissible means such as
applying for tax exemption in the sale
of his principal residence classified as
capital asset or choosing the lesser tax
rate applicable to the taxable
transaction.
 Week 3: Tax Administration II

Administrative Remedies
2. Amendment of Tax Returns - As a rule,
a tax return once filed cannot anymore
be withdrawn but it can still be
modified for as long as (a) the
amendment is made within three (3)
years om the date of the filing of such
return; and (b) no notice for Wit or
investigation of such return has been
served to the taxpayer
 Week 3: Tax Administration II

Administrative Remedies
3. Demand for the Letter of Authority
(LA) - It authorizes or empowers a
particular Revenue Enforcement
Officer (REO) to go over, verify and
scrutinize a taxpayer's books and
records.
 Week 3: Tax Administration II

Administrative Remedies
4. Protesting an Assessment - Before
payment, the taxpayer can contest the
assessment within 30 days from the
receipt of the notice of assessment.
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Administrative Remedies
5. Applying for No Audit Program (NAP)
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Administrative Remedies
6. Entering into a Compromise - Before
payment, the taxpayer may offer an
amount which is lesser than the
amount of tax liability assessed to him.
 Week 3: Tax Administration II

Administrative Remedies
7. Filing of Claim for Tax Credit - After
payment, a tax credit certificate could
be issued to the taxpayer, which may
be applied against any internal
revenue tax for which the taxpayer is
liable.
 Week 3: Tax Administration II

Administrative Remedies
8. Filing of Claim for Refund - After
payment, a request for actual return in
cash of erroneously or illegally
collected taxes should be made
through filing a claim for tax refund.
 Tax Credit or Tax Refund
Summary Application
Tax Claim Filing Prescriptive Forfeiture in Favor of
Period the Government

(1) Tax Credit Within 2 years after Tax credit certificate

the payment of tax or unutilized within 5
penalty years from date of
mailing or delivery
(2) Tax Refund Within 2 years after the Refund check or
payment of tax or warrant unclaimed or
penalty uncashed within 5
years from date of
mailing or delivery
Judicial
Remedies
 Week 3: Tax Administration II

1. Civil Action
Appeal to the Court of Tax Appeals (CTA) - If the protest
is denied in whole or in part, or is not acted upon within
180 days from submission of documents, the taxpayer
adversely affected by the decision or inaction may
appeal to the CTA within 30 days from receipt of the
said decision, or from the lapse of the 180-day period;
otherwise, the decision shall become final, executory
and demandable.
 Week 3: Tax Administration II

2. Criminal Action
The taxpayer could file a complaint
against erring BIR officials and employees
who commit any of the delinquencies
specified in the Tax Code, like extorting,
conspiring to violate the provisions of the
Code
 Week 3: Tax Administration II

3. Other Judicial Remedies

A. Action for damages against revenue
officers
B. Action to contest forfeiture of chattel