Managing Tax Assessment

and Collection

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 Topic Outline
1. Basic principles of taxation
□ Interpretation of Tax Laws
□ Sources of Tax Laws
□ Power of Commissioner of Internal Revenue
2. Types of Audit Notices and the proper approach in
handling them
□ Letter of Authority (LA, eLA)
□ Memorandum of Assignment
□ Letter Notice
□ Mission Order (Tax Mapping, Tax Surveillance,
Oplan Kandado)
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 Topic Outline
3. Approaching BIR Assessment
□ Basic Assessment Process
□ Subpoena Duces Tecum
□ Preliminary Assessment Notice (PAN)
□ Final Assessment Notice (FAN)
□ Protesting the FAN
□ Court of Tax Appeals

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 TAXATION

Definition

The power by which the sovereign,

through its law making body, raises
revenue to defray the necessary
expenses of government

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1. Constitution

2. Tax codes such as the National Internal Revenue Code (NIRC)

(RA 8424),Tariff and Customs Code, and portions of the Local
Government Code

3. Other statutes like Republic Act (R.A.) (An Act Creating the
Court of Tax Appeals), R.A. 7716 (E-VAT Law), and R.A. 9337
(Amendment to RA 8424)

4. Presidential Decrees (PD)

5. Executive Orders (EO)

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6. Court Decisions (Supreme Court, Court of Tax Appeals)

7. Revenue Regulations (RR) promulgated by the Department

of Finance
8. Administrative issuance of the Bureau of Internal Revenue
(BIR) like Revenue Memorandum Circulars (RMC), Revenue
Memorandum Orders (RMO) and those of the Bureau of
Customs like Customs Memorandum Orders (CMO)
9. BIR Rulings

10. Local Tax Ordinances

11. Tax Treaties and conventions with foreign countries

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Revenue Regulations (RR)
• These are formal interpretations of the Tax Code
• These are usually promulgated alone by the Secretary of
Finance, although in some cases, it is jointly issued with the
head of another government, e.g. Board of Investments,
Department of Trade and Industry and Cooperative
Development Authority
• Have the force and effect of law; hence, it can only be
repealed, modified or amended by another subsequent
regulation or law.
• These are numbered consecutively every calendar year.
Thus, Revenue Regulations No. 01-05 means that is the first
regulation issued for the year 2005

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Revenue Memorandum Circular (RMC)
□ These are intended to disseminate and embody pertinent
and applicable portions as well as amplifications of the rules,
precedents, laws, regulations opinions and other orders and
directives issued by offices and agencies other than the BIR,
for the information, guidance and compliance of revenue
personnel.

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Revenue Memorandum Order (RMO)
□ These are directives or instructions outlining procedures,
techniques, methods, processes, operations, activities, work
flow, and the like, which are necessary to carry out programs
or to archive policy goals and objectives.

□ These instructions may be of general or of limited scope, yet

in any case require definite compliance by those
concerned.

□ These are not addressed to any particular group of

employees or offices because they are for general
information, but those directly concerned with the
compliance of these provisions are either definitely stated or
unmistakably implied thereat.
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BIR Rulings (RMO 9-14)
□These are official positions of the Bureau on inquiries of taxpayers,
who request clarification on certain provisions of the National
Internal Revenue Code (NIRC), other tax laws, or their
implementing regulations.

□A taxpayer ordinarily may rely on a valid ruling received from the

Bureau pertaining to the transaction it was applied for. For the
ruling to be valid, the taxpayer must fully and accurately describe
the transaction in the request.

□Tax rulings cannot be cited as precedent by other taxpayers, but

they can provide useful information on how the Bureau may treat
a similar transaction.
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BIR Rulings
□Types of rulings that are issued by the BIR:
a.International Tax Affairs Division (ITAD) Rulings or Tax Treaty
Reliefs – for interpretations of tax treaty provisions

b.Value Added Tax (VAT) Rulings

c.BIR Rulings – for rulings not classified in letter a and b above

– signed and approved by the Commissioner

d.Delegated Authorities (DA) or Unnumbered Rulings (UN) – signed

by the Deputy Commissioner or Assistant Commissioner

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 Interpretation of Tax Laws
□ Legislative Intent
□ In case of doubt, the doubt must be
resolved liberally in favor of taxpayers
and strictly against the taxing authority

□ Exception: In case of tax exemptions,

laws must be construed strictly against
the taxpayer
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 National Internal Revenue Taxes

□ Income Tax
□ Estate and Donor’s Tax
□ Value Added Tax
□ Other Percentage Taxes
□ Excise Taxes
□ Documentary Stamp Taxes

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 The BIR has the power
□ "SEC 5. Power of the Commissioner to
Obtain Information, and to Summon,
Examine, and Take Testimony of
Persons

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 The BIR has the power
SEC 6. Power of the Commissioner to Make
Assessments and Prescribe Additional Requirements
for Tax administration and Enforcement –

(A) Examination of Returns and Determination of

Tax Due. - After a return has been filed, the
Commissioner or his duly authorized representative
may authorize the examination of any taxpayer and
the assessment of the correct amount of tax:
Provided, however, that failure to file a return shall
not prevent the Commissioner from authorizing the
examination of any taxpayer.

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 The BIR has the power
SEC 6. Power of the Commissioner to
Make Assessments and Prescribe
Additional Requirements for Tax
administration and Enforcement –

"(C) Authority to Conduct Inventory-

taking, Surveillance and to Prescribe
Presumptive Gross Sales and Receipts.

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 Types of audit notices

1. Electronic Letter of Authority (eLA)

2. Memorandum of Assignment (MOA)
3. Letter Notices (LN)
4. Mission Orders (MO)

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 Memorandum of Assignment (MOA)
(Revenue Memorandum Order No. 069-10)

Coverage:

1. Reassignment for the continuation of the

audit/investigation to another RO due to
resignation/retirement/transfer of the original RO.
2. Assignment to the original RO of returned cases by
the reviewing office and reassignment to another
RO of returned cases in case of
resignation/retirement/transfer of the original RO.

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 Memorandum of Assignment (MOA)
(Revenue Memorandum Order No. 062-10)

3. Reassignment to another RO due to referral of the

case to another investigating office (e.g., cases
referred to SID by the RDO)
4. ONETT cases (capital gains tax/creditable
withholding tax and DST involving transfers of real
property or shares of stock and donor's tax)
5. Protested cases/cases for reinvestigation.
6. Refunds of foreign embassies and its personnel
(RMC 080-10)

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 Letter Notice (LN)

Sample LN Form

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 Nature and coverage of Letter Notices (LNs)

Coverage
- Issued for under-declaration of sales and over-
claimed purchases discovered under the
Reconciliation of Listing for Enforcement
System (RELIEF) and TPM – BOC Data
Program.
- Covers only the tax indicated therein on a given
particular period or quarter

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 LN same nature as LA

"LN being served by the Bureau upon taxpayers who

were found to have under-declared their sales or
purchases through the Third Party Information
Program can be considered a notice of audit or
investigation which would in effect disqualify the
taxpayers concerned from amending any return which
is the subject of such audit or investigation."

- RMC 40-03, July 03, 2003

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 Types of LN

1. RELIEF-SLSP & Third Party Matching (TPM) –Bureau

of Customs (BOC) LN – computerized matching of
information/data by third party (TP) sources against
declarations per VAT return (Relief -RMO 30-03, 42-03,
24-04, 32-05, 32-07, 36-08; TPM-BOC – RMO 34-04,
46-04, 32-05, 32-07)
2. Taxpayer Reconciliation System (TRS) – LN - on
information/data provided by withholding agents/payors
and payees/income recipients against taxpayers'
declaration per income /VAT/percentage/ withholding tax
returns (RMO 28-07 as amended by RMO 04-08)
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 LN – Sources of Discrepancies

1. Sales reported by seller vs purchases reported by the

buyer (VAT and income tax)
2. CWT remitted by buyer vs CWT claimed by
seller/supplier CWT)

3. Income reported vs. CWT or FT paid by payor

4. Importations recorded by BOC vs importations
reported in the SLSP (VAT and income tax)

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Mission Orders (MO)

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 Mission Orders (MO)

Coverage: All surveillance and stock-taking activities

Purpose:
To monitor taxpayers on non-compliance with
requirements on issuance of receipts, filing of returns,
declaration of taxable transactions, taxpayer
registration, and payment of correct amount of taxes.

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 MO authorized signatories
(Revenue Memorandum Order No. 03-09)

Investigating office/division Authorized Revenue

Official
Revenue District Office Regional Director
Special Investigation Division Regional Director

National Investigation Division (NID) ACIR – Enforcement

and policy cases division (PCD) Services
LT Audit and Investigation Division I ACIR, Large Taxpayers
& II/LT Field Operations Division /LT Service
District Offices

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 Revenue Officers authorized to conduct
surveillance
(RMO 03-09, as amended by RMO 50-2010, May 28,
2010)
At least 2 implementing officers comprised of:
a. ROs – Assessment/Excise;
b. Intelligence Officers (IOs)
c. Special Investigators (SIs)

In cases where there is not enough officers to complete the

team of 2, the following may be assigned to assist provided
that they shall be strictly supervised by the assessment
ROs:
a. ROs – Collection/Document Processing
b. Computer Operators
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 Types of surveillance and compliance
verification drives under "Oplan Kandado"
(Revenue Memorandum Order No. 3-09)

Type of Surveillance
1. Covert Surveillance – surreptitious and undercover
watch on the business operations of a person as well as
movement of goods or rendition of services.
2. Overt Surveillance – commences with
the inventory-taking of the business documents
followed by the actual observation and close
monitoring of the business activities of such
person.

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 Types of surveillance and compliance
verification drives under "Oplan Kandado"
(Revenue Memorandum Order No. 3-09)

3. Short-Duration Surveillance (Tax Compliance Check)

– business operations of the target taxpayer are
observed for purposes of detecting non-compliance with
the Bureau's primary and secondary
registration requirements.

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 Grounds for suspension or
temporary closure of business
□ (a) Failure to issue receipts or invoices by a
VAT-registered or registrable taxpayer;
□ (b) Failure to file a Value-Added Tax return;
□ (c) Understatement of taxable sales or
receipts by 30% or more of the correct
amount thereof in the case of a VAT-
registered or registrable taxpayer; or,
□ (d) Failure to register.
□ (Sec. 115, NIRC, RMO 3-09)
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 Average Sales (RMO 3-09)
To get the Average Daily Sales:

Total Sales During Surveillance

———————————————= Average
Total No. of Days Under Daily
Surveillance Sales (ADS)

To get the Average Quarterly Sales:

ADS x 30 days x 3 months = Average
Quarterly Sales (AQS) 32
 Tax Compliance Verification Drive
(TCVD)“TAX MAPPING”
□ Purpose;
To expand its tax base, enhance tax
compliance and consequently boost its tax
collection effort.
□ To establish cordial relationship with taxpayer
by giving assistance thru tax information drive
and verification of taxpayer's compliance
requirements during the actual visitation of
taxpayer's establishment and its branches

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 Tax Compliance Verification Drive
(TCVD)“TAX MAPPING”
□ POLICIES
□ 1. A Revenue Region Special Order (RRSO) shall
be issued by the Regional Director enumerating
the participating Revenue Officers;
□ 2. A Mission Order (MO) shall be issued by the
Regional Director authorizing specific Revenue
Officers to compose the Tax Mapping Team, the
area covered and the date/time of operation.
□ 3. Revenue officer should present his/her official
BIR Identification Card when visiting an
establishment

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 Tax Compliance Verification
Drive(TCVD)
“TAX MAPPING”
1. Verify if the establishment is registered
or not:
□ If registered: determine if there is a need
for registration up-date; verify if the
Registration Fee is paid then provide
taxpayer with appropriate forms and
record findings in the Taxpayer's
Information Sheet (TIS)

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 Tax Mapping
□ If not registered, require the establishment
and/or taxpayer to register within 24 hours
then record findings in the TIS;

2. Observe and verify if the establishment

maintains duly authorized Receipts or
Sales/Commercial Invoices.

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 Tax Mapping
□ 3. Verify if the use of CRM/POS/CAS is
duly authorized and determine if there
are violations in the use of
CRM/POS/CAS;
□ 4. Verify if the establishment is
maintaining duly authorized books of
accounts and recorded transactions
are updated.

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 Basic assessment process

Filing of tax
Selection of Investigation Issuance of
return and Issuance of
tax return for (Conduct of
payment of PAN FAN
audit examination)
tax
 Letter of authority

Scope:

1. Audit or investigation of all internal revenue taxes,

including withholding taxes.

2. Claims for tax refund/credit, audit of taxpayers retiring

from business or undergoing corporate reorganization
and other cases where TVNs were previously
authorized for audit/verification of tax liabilities and
other audit-related activities.

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 Sample LA issued by
an RDO

Period covered: Only one

taxable year (2008)

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Issuance of electronic LAs
(RMO 44-2010, May 12, 2010)

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 Serving of letter of authority (LA)

Letter of Authority (LA) - must be served upon

the taxpayer or his authorized representative
within thirty (30) days from date of issue
otherwise it becomes invalid.

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 Validity of LAs

- An LA must be served upon the taxpayer or his

authorized representative within thirty (30) days from date
of issue otherwise it becomes invalid.

- Rule that the examination should be completed within

120 days from the date of issuance of LA and
requirement for its revalidation of LAs in case of failure to
complete the audit within the 120-day period -
withdrawn. (RMO 44-2010)

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 Effect of failure to revalidate an LA

Failure of the revenue officer to complete the audit

within 120 days and without revalidating the LA shall
make him/her liable to administrative sanctions.

- RMC 23-09 (May 08, 2009) and RMO 44-2010,

(May 12, 2010)

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 What happens upon issuance of
audit notice?
 Revenue Examiner issues Letter of Authority (LA)
and checklist of presentation of the requirements
for the audit or access to records request.
 Revenue Examiner requests the taxpayer, in
writing, to make available for inspection, the
pertinent books of accounts, accounting records
and particular or specific documents indicating
therein the time and date within which these
records should be made available.

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 What happens upon issuance of
audit notice?
 Revenue Examiner examines the books of
accounts and other accounting records in the
taxpayer's office or place of business or in the
office of the Bureau of Internal Revenue.

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 Documents requested for
submission during
examination
1. Annual ITR and certified FS including profit and loss
2. Audited Financial Statement and Certificate of
Creditable Withheld at Source (BIR Form 2307)
3. Quarterly and Monthly VAT/Percentage Tax Returns;
4. Withholding Taxes: (a) Alpha List; (b) 1604CF; (c)
1601E; (d) 1604E; (d) 1601C; (e) 1601F; and others
5. List of inventories – Beginning and Ending
6. OR of all taxes paid and/or Customs Duties paid
7. Others

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 Documents requested for
submission during examination
Worksheets
1. Monthly abstract of all ledger accounts
2. Detailed schedule of sales and its corresponding output
taxes per VAT Regs. 6-89
3. Schedule of Export and/or VAT Tax Exempt Sales, if any
4. Detailed Shedule of Purchases and its Corresponding
input taxes per VAT Regs. 6-89
5. Detailed composition of cost of sales
6. Schedule of property and equipment and its
accumulated depreciation/amortization
7. Others

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 Documents for
verification/examination
For verification:
1. General journal and general ledger
2. Subsidiary journals and subsidiary ledgers
3. Sales invoices and receipts
4. Proof of exportations (export permit, inward letter or
bank CM for inward remittance) if any
5. Purchase of invoices and receipts/pertinent
importation documents, if any

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 Documents for
verification/examination

6. Documents and records supporting all deductions/

expenses claimed;
7. Production reports, if any
8. Other related and pertinent accounting records and
documents
9. Others

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 Notice of submission of
documents
(RMO 45-2010, May 12, 2010)

□ The documents required by the BIR for

examination should be presented within 10 days
from date of receipt of LA and checklist of
requirements/access to records request.
□ In case a taxpayer fails or refuses to present or
submit required documents, BIR issues First
Notice, signed by the Revenue Officer (RO)
and/or his group supervisor.

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 Notice of submission of
documents
(RMO 45-2010, May 12, 2010)

□ If the taxpayer ignores the First Notice and

continues to disregard the demand for the
submission of the required documents, a Second
and Final Notice, signed by the Head Office
concerned, shall be sent to the taxpayer after 10
calendar days from receipt of the First Notice.

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 BIR remedy in case of non-submission of
documents
(RMO 45-2010, May 12, 2010)

□ SDT is issued 10 days after receipt of the

Second and Final notice
□ BIR's courses of action of the taxpayer refuses
to comply with the SDT:
 file a criminal case against the taxpayer
 initiate a proceeding to cite the taxpayer
for contempt

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 SUBPOENA DUCES TECUM
□ Prescribes the revised guidelines and
procedures in the issuance and enforcement of
Subpoenas Duces Tecum (SDT) and the
prosecution of cases for non-compliance
therewith

□ RMO No. 10-2013, RMO No. 8-2014

 SUBPOENA DUCES TECUM
When is the issuance of Subpoenas Duces Tecum (SDT)?

In case the information or records requested are not furnished

within the period prescribed in the written notice, or when the
information or records submitted are incomplete, the concerned
revenue officer conducting a verification or shall request for the
issuance of SDT through a Memorandum Report, stating therein
the relevant facts, specifying the particular documents or records
not made available to him and the taxpayer liable or the third
party/office concerned.
Sample SDT
 SUBPOENA DUCES TECUM
Who are the persons covered by SDT?
1. Person liable for tax or required to file a return or any officer
or employee of such person, or any person having
possession, custody, or care of the books of accounts and
other accounting records containing entries relating to the
business of the person liable for tax;
2. Any person other than the person whose internal revenue tax
liability is subject to audit or investigation, or from any office
or officer of the national and local governments, government
agencies and instrumentalities, including the Bangko Sentral
ng Pilipinas and government-owned or controlled
corporations (GOCCs);
 SUBPOENA DUCES TECUM
What is the action of the BIR in case the taxpayer failed to obey
SDT?

In case there is no submission or incomplete presentation of the

required books of accounts and other accounting records, the
revenue officers shall work jointly with the action lawyer in
documenting/gathering evidence/s for the criminal prosecution of
the individual who disobeyed the SDT.
 SUBPOENA DUCES TECUM
Are there withdrawal of cases in court?

The person summoned shall be accorded full notice and

opportunity to comply with the SDT as detailed herein. Once the
Complaint-Affidavit has been filed for violation of Section 266
(“Failure to Obey Summons”) of the NIRC, as amended, no
prosecuting officer of the Bureau shall cause the withdrawal or
dismissal of the case, notwithstanding the subsequent submission
of documents indicated in the SDT.
 Authorized Signatory of SDT
(Revenue Memorandum Order 008-14, January 29,
2014)
National Office:
□ Assistant Commissioner, Enforcement and
Advocacy Service – for the National Office;

□ Assistant Commissioner, Large Taxpayers Service – for

taxpayers under the jurisdiction of the Large
Taxpayers Service, including LTDOs;

□ Any other officer duly delegated by the

Commissioner.
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 Authorized Signatory of SDT
(Revenue Memorandum Order 008-14, January 29,
2014)
Regional Office:

□ Revenue Regional Directors– for the Regional Offices;

□ Any other officer duly delegated by the

Commissioner.

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□Due Process Requirement

□ (RR 12-99, as amended by RR 18-2013)

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 Assessment Process

Filing of
tax return Issuance Issuance
Issuance Issuance of
and of Letter of
of PAN of FAN
payment Authority FDDA
of tax
 Final Decision on
Disputed Assessment
(FDDA)

Elevate to CIR Appeal to

(Reconsideration) CTA

Final Decision
of CIR

Appeal to
CTA
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 Preliminary Assessment Notice
(PAN)

- Notice given to the taxpayer prior to the

issuance of a Final Assessment Notice (FAN)
- Shows in detail, the facts and law, rules and
regulations or jurisprudence on which the
proposed assessments are based.

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 Exceptions to issuance of PAN

1. Finding is a result of mathematical error

2. Discrepancy between tax withheld and
remitted by the withholding agent
3. Taxpayer claiming a refund/ tax credit of
excess CWT who carried over/applied the
same amount claimed against their estimated
tax liabilities
4. Unpaid excise taxes
5. Tax exempt importations transferred to non-
tax-exempt persons
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 Decision on PAN

Taxpayers confirms
agree
agreement in writing;
pays tax liability

Taxpayer
disagree Taxpayer issues reply to
the PAN

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 Replying to the PAN
1. Submit the written reply to the PAN within the 15-
day period
2. Address the factual and legal basis of the findings
3. Support the arguments and reconciliations with
documentary evidences
4. Request that the docket be forwarded to the
Revenue District Office.

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 PAN

□ If the taxpayer fails to respond within fifteen

(15) days from date of receipt of the PAN,
he shall be considered in default, in which
case, a Formal Letter of Demand and Final
Assessment Notice (FLD/FAN) shall be issued
calling for payment of the taxpayer's
deficiency tax liability, inclusive of the
applicable penalties (RR 18-13)

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 PAN

□ If the taxpayer, within fifteen (15) days from

date of receipt of the PAN, responds that
he/it disagrees with the findings of
deficiency tax or taxes, an FLD/FAN shall be
issued within fifteen (15) days from
filing/submission of the taxpayer's response,
calling for payment of the taxpayer's
deficiency tax liability, inclusive of the
applicable penalties.

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 Final Assessment Notice

- The FAN refers to the document which contains

the final assessment of the BIR on the taxpayer as
regards the taxable year and/or tax under audit.

- Taxpayers must be informed in writing of the law

and the facts upon which a tax assessment is
based; otherwise, the assessment is void. FAN
should contain the facts and law.

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Formal Letter of Demand
and Assessment Notice

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 Decision on FAN

Taxpayers confirms
agree agreement in writing;
pays tax liability

Taxpayer Taxpayer issues protest

disagree to the FAN

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 FAN involving several issues
Taxpayer agrees with
finding in the FAN

 Taxpayer shall pay deficiency tax inclusive

of applicable interest and/or surcharge.
 If there are several issues in the assessment
and taxpayer agrees with the validity of
some of the issues raised in the FAN, the
taxpayer shall be required to pay the
deficiency taxes on the undisputed issues.
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Protesting the FAN

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 Law governing the administrative
protest
Sec 228 of the NIRC:

Such assessment may be protested

administratively by filing a request for
reconsideration or reinvestigation within 30 days
from receipt of the assessment in such form
prescribed by implementing rules and
regulations.

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 Forms of protest
Request for reconsideration - a plea for a re-
evaluation of an assessment on the basis of
existing records without need of additional
evidence . It may involve a question of fact or
law or both. New legal argument may be
presented.
Request for reinvestigation - a plea for re-
evaluation on the basis of newly-discovered
evidence or additional evidence that a taxpayer
intends to present in the reinvestigation. It may
involve a question of fact or law or both,

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 Reconsideration vs reinvestigation
Request for reconsideration does not stop the running
of the 5-year prescriptive period to collect !

□ BIR should be able to initiate collection within 5

years from issuance of FAN
□ If not, the BIR losses right to collect even if the
assessment has become final and executory.
□ If you have pending protests, check what type
(recon or reinvestigation) and evaluate whether
right to collect has prescribed

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 Reconsideration vs reinvestigation
Request for reinvestigation suspends the running of the
5-year prescriptive period for collection.

□ period between filing of protest and issuance of

FDDA is excluded from the 5 years.

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 Pro forma protest
A pro forma protest is not valid.

1. General statement that the taxpayer disagrees with

the findings and requests for their cancellation
2. Reiteration of the grounds already stated in the reply
to PAN
3. A reference to the previously filed reply to the PAN
(e.g. "We have already submitted our reply to your
findings in a letter dated _____ and received by your
office on _____ . . .".

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 Prescribed format
a) Nature of protest whether reinvestigation or
reconsideration
• In case of reinvestigation – specify the
newly discovered evidence to be
presented
b) Date of the Assessment Notice
c) The applicable law, rules and regulations or
jurisprudence

□ OTHERWISE, protest is considered VOID and

have no FORCE and EFFECT

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 After the FAN . . .

PAY 60 days

Submit INACTION
ReInv File CTA
docs 180 + 30 appeal
days

FAN Protest in 30 days 30 days

ReCon FDDA-denial
PAY
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 Elevation of protest to the CIR
□ Taxpayer may elevate his protest through request
for reconsideration to the Commissioner within 30
days from date of receipt of the final decision of
the Commissioner's duly authorized
representative.
□ Counting of the 60 + 180 +30 before appealing
with CTA shall commence from submission of
protest to CIR.

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 Decision to appeal assessment in
court
1. Cost-benefit considerations
2. Strength of the case
3. Company policy
4. Legal issues involved that cannot be resolved
at BIR level
5. Desire to settle recurring legal issues

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 CTA Jurisdiction
Sec 7 of RA 1125 provides that the CTA shall
exercise exclusive appellate jurisdiction to
review decisions of the Commissioner of Internal
Revenue in cases involving disputed
assessments, … penalties imposed relation
thereto or other matters arising from the NIRC or
other laws or part of laws administered by the
BIR.

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 CTA jurisdiction

Disputed assessment

□ FAN that was properly protested within the

prescribed time
□ 30 days from denial or inaction
□ In the proper protest format –
reconsideration or investigation
 Period to appeal
Sec 228, NIRC

"If the protest is denied in whole or in part, or is not

acted upon within one hundred eighty (180) days
from submission of documents, the taxpayer
adversely affected by the decision or inaction
may appeal to the Court of Tax Appeals within
thirty (30) days from receipt of the said decision, or
from the lapse of one hundred eighty (180)-day
period; otherwise, the decision shall become final,
executory and demandable."
 Option of the taxpayer in case of inaction

If the protest is not acted upon within the 180-day

period, the taxpayer may either;

1) Appeal to CTA within 30 days from receipt of

the lapse of 180 days
2) Await the Final Decision (FDDA) of the CIR’s
duly authorized representative