RIGHTS AND REMEDIES OF What’s the reason for that?

TAXPAYERS UNDER THE NIRC Because it would be very

convenient for any taxpayer who
A. AMEND RETURN received a notice of investigation to
change his return in order to escape
1. Section 6(A) liability. So, it would be useless on the
Power not to allow the withdrawal of part of the BIR to investigate since the
any return, statement of declaration, taxpayer would have changed the
although the same may be amended information in the return or coincide
(3rd par). with whatever was investigated.

Any return, statement of declaration 2. Section 228

filed in any office authorized to receive As a General Rule PAN must first be
the same shall not be withdrawn: issued before issuing a FAN or Final
Provided, that within three (3) years letter of demand.
from the date of such filing, the same
may be modified, changed, or amended: Exceptions:

Provided, further, that no notice for (a) When a discrepancy has been
audit or investigation of such return, determined between the tax withheld
statement or declaration has in the and the amount actually remitted by the
meantime been actually served upon withholding agent;
the taxpayer.
(b) When the excise tax due on
The General Rule is that whenever a excisable articles has not been paid;
return is filed, it will stay there, you
cannot do anything about it. But you (c) When a taxpayer who opted to claim
can make additional filing that’s why a refund or tax credit of excess
you can modify, amend or change any creditable withholding tax for a taxable
information there. period was determined to have carried
over and automatically applied the same
Does that mean that you can withdraw amount claimed against the estimated
the return filed earlier and exchange it tax liabilities for the taxable quarter or
with another return? quarters of the succeeding taxable year;
No, the return, once filed will
stay with the BIR. You just have to file a (d) When the finding for any deficiency
new return containing the corrected tax is the result of mathematical error in
information. Changing, amending, or the computation of the tax as appearing
modifying a return can only be done on the face of the return; or
within 3 years from the time of filing
and granting that there has been no (e) When the article locally purchased or
notice of investigation was ever issued imported by an exempt person, such as,
to the taxpayer otherwise you cannot but not limited to, vehicles, capital
amend the return you filed. equipment, machineries and spare
parts, has been sold, traded or C. REFUND AND/OR TAX CREDIT OF
transferred to non-exempt persons. ERRONEOUSLY PAID TAX

The taxpayers shall be informed in 1. Section 229

writing the LAW and the FACTS on which - no suit or proceeding shall be
the assessment is made, otherwise the maintained in any court for the
assessment shall be void. recovery of any national internal
- An assessment is deemed made revenue tax alleged to have been
when the FAN is finally released, erroneously or illegally collected
mailed and sent to the taxpayer. until a claim for refund or credit
has been duly filed with the
Commissioner.
B. WHAT CONSTITUTE DENIAL OF
PROTEST OR DECISION ON This means that a taxpayer must first
DISPUTED ASSESSMENT file an administrative claim for refund
with the BIR before filing a judicial claim
for refund with the Court. However, this
Section 7(a)(2) of RA No. 9282 provides does not mean that the taxpayer must
that the "inaction" of the CIR or his await the final resolution of its
failure to decide a disputed assessment administrative claim for refund before
within the 180-day period is "deemed a seeking judicial recourse, since doing so
denial" of the protest. Therefore, would be tantamount to the taxpayer’s
allowing the taxpayer to either: (1) file forfeiture of its right to seek judicial
a petition for review with the Court of recourse should the two-year
Tax Appeals within 30 days after the prescriptive period expire without the
expiration of the 180-day period; or (2) appropriate judicial claim being filed.
await the final decision of the In short, the taxpayer need not await
Commissioner on the disputed the final decision of the administrative
assessments and appeal such final claim in order to resort to the
decision to the Court of Tax Appeals appropriate judicial claim.
within 30 days after receipt of a copy of
such decision. 2. WHAT CONSTITUTES ERRONEOUS
PAYMENT REQUIREMENT TO FILE
Clearly, the inaction is deemed an ADMINISTRATIVE CLAIM
adverse decision of the CIR on the
administrative protest. Thus, for - there must be a written claim
purposes of determining whether for refund filed by the taxpayer to
taxpayers may already appeal to the the Commissioner
CTA, the inaction of the CIR within 180 - the claim must categorically
days shall be deemed denial or an demand for reimbursement
adverse decision of the CIR. - the claim for refund must be filed
within two years from the date
of payment of the tax or penalty.
3. OFFSETTING AGAINST have a feeling of security against
DEFICIENCY ASSESSMENTS unscrupulous tax agents who will always
find an excuse to inspect the books of
Government invoked set-off - the taxpayers not to determine the
Taxpayer invoked set-off - latter’s real liability but to take
advantage of every opportunity to
It was held that taxes cannot be subject molest peaceful law-abiding citizens.
to set-off. Without such a legal defense taxpayers
would furthermore be under obligation
It was ruled that there can be no to always keep their books open and
off-setting of taxes. A person cannot keep them open for inspection subject
refuse to pay a tax on the ground that to harassment by unscrupulous tax
the government owes him an amount agents.
equal to or greater than the tax being
collected. The collection of a tax cannot
await the results of a lawsuit against the 1. Section 203
government, since as we know there is Internal revenue taxes shall be assessed
a process (mandatory audit) pa before within three (3) years:
refund is to be granted or approved. - If the return is filed before the
due date, it commences to run
Accordingly, the government and after the due date of filing the
taxpayer are not mutually creditors and return.
debtors of each other and a claim for - If the return was filed after the
taxes is not such a debt, demand, due date, it shall commence after
contract or judgment as is allowed to be the return has been filed.
set-off.
Internal revenue taxes shall be assessed
National government taxes against Local within ten (10) years:
taxes are not allowed to offset. - When the return is false and
fraudulent with the intent to
D. STATUTE OF LIMITATIONS evade taxes or when No return
was filed.
Rationale: (Republic vs. Ablaza) - Commences after the date of
The law prescribing a limitation of discovery.
actions for the collection of the income
tax is beneficial both to the government 2. Section 222
and its citizens. Exceptions as to Period of Limitation of
Assessment and Collection of Taxes.
To the government because tax
officers would be obliged to act properly (a) If return filed is false or fraudulent
in the making of assessments with intent to evade tax or if No return
was filed:
To citizens because after the lapse of - collection of such tax may be
the period of prescription citizens would filed without assessment
 - at any time within ten (10) criminal action is not
years after the discovery of the suspended)
falsity, fraud or omission - when the taxpayer
Provided, that the fact of fraud which requests for an
has become final and executory shall be investigation which was
judicially taken cognizance of in the civil granted.
or criminal action for the collection - when the taxpayer cannot
thereof. be located in the address
as indicated in the return
Prescriptive period for Collection - when the warrant of
In general: distraint or levy has been
- Within 5 years from issuance of served and no property
FAN. could be located.
Return filed is fraudulent or - when the taxpayer is out
No return was filed of the Philippines.
- Ten (10) years from discovery
Did the pendency of the taxpayer’s
Prima facie evidence of false or appeal to the CTA and the SC have the
fraudulent return: effect of legally preventing the CIR for
- substantial under declaration of the collection of tax?
taxable sales, receipts or income Yes, filing of an appeal with the
or a substantial overstatement of said courts effectively suspended the
deductions both exceeding prescriptive period to collect the taxes
30%. due.

3. Section 223
Suspension of Running of Statute of What is the waiver of the statute of
Limitations limitations?
- agreement between the taxpayer
The prescriptive period under the NIRC and the BIR that the period to
shall be suspended in the following issue an assessment and collect
instances: the taxes due is extended to a
date certain.
a. There has been a waiver of the - not a waiver of the right to
defense of prescription invoke the defense of prescription
b. The running of the prescriptive as erroneously held by CTA.
period is also suspended when: *waiver- toll the running of prescriptive period
- the Commissioner is
prohibited in making an
The Commissioner of Internal Revenue
assessment or beginning
has issued Revenue Memorandum
of a distraint or levy or a
Circular (RMC) No. 141-2019 reiterating
proceeding in court for 60
the salient provisions for a valid
days thereafter (filing of
waiver.
It emphasize that taxpayer must ensure
that his waiver:
- Is executed before the expiration
of the period to assess or to
collect taxes;
- Indicates the expiry date of the
extended period;
- Indicates the type of tax (for
waiver of the prescriptive period
to collect); and
- Is signed by his authorized
representative.