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Definition/nature/basis

SEC. 4. Power of the Commissioner to Interpret Tax Laws and to Decide Tax Cases. - The power to interpret the

proisions of this Code and other tax !aws sha!! be under the exc!usie and ori"ina! #urisdiction of the Commissioner$

sub#ect to reiew b% the Secretar% of &inance.

The power to decide disputed assessments$ refunds of interna! reenue taxes$ fees or other char"es$ pena!ties imposed in

re!ation thereto$ or other matters arisin" under this Code or other !aws or portions thereof administered b% the 'ureau of

Interna! (eenue is ested in the Commissioner$ sub#ect to the exc!usie appe!!ate #urisdiction of the Court of Tax)ppea!s.

SEC. *. )uthorit% of the Commissioner to De!e"ate Power. - The Commissioner ma% de!e"ate the powers ested in him

under the pertinent proisions of this Code to an% or such subordinate officia!s with the ran+ e,uia!ent to a diision chief

or hi"her$ sub#ect to such !imitations and restrictions as ma% be imposed under ru!es and re"u!ations to be promu!"ated b%

the Secretar% of finance$ upon recommendation of the Commissioner Proided$ howeer$ That the fo!!owin" powers of

the Commissioner sha!! not be de!e"ated

a The power to recommend the promu!"ation of ru!es and re"u!ations b% the Secretar% of &inance0

b The power to issue ru!in"s of first impression or to reerse$ reo+e or modif% an% existin" ru!in" of the 'ureau0

c The power to compromise or abate$ under Sec. 124 ) and ' of this Code$ an% tax!iabi!it% Proided$ howeer$ That

assessments issued b% the re"iona! offices ino!in"basic deficienc% taxes of &ie hundred thousand pesos P322$222 or

!ess$ and minorcrimina! io!ations$ as ma% be determined b% ru!es and re"u!ations to be promu!"ated b%the Secretar% of

finance$ upon recommendation of the Commissioner$ discoered b%re"iona! and district officia!s$ ma% be compromised b%

a re"iona! ea!uation board whichsha!! be composed of the (e"iona! Director as Chairman$ the )ssistant (e"iona!

Director$the heads of the Le"a!$ )ssessment and Co!!ection Diisions and the (eenue District fficer hain" #urisdiction

oer the taxpa%er$ as members0 and

d The power to assi"n or reassi"n interna! reenue officers to estab!ishments where artic!es sub#ect to excise tax are

produced or +ept.

SEC. 111. Exceptions as to Period of Limitation of )ssessment and Co!!ection of Taxes. -

a In the case of a fa!se or fraudu!ent return with intent to eade tax or of fai!ure to fi!e a return$ the tax ma% be assessed$

or a proceedin" in court for the co!!ection of such tax ma% be fi!ed without assessment$ at an% time within ten 52 %ears

after the discoer% of the fa!sit%$ fraud or omission Proided$ That in a fraud assessment which has become fina! and

executor%$ the fact of fraud sha!! be #udicia!!% ta+en co"ni6ance of in the cii! or crimina! action for the co!!ection thereof.

b If before the expiration of the time prescribed in Section 127 for the assessment of the tax$ both the Commissioner and

the taxpa%er hae a"reed in writin" to its assessment after such time$ the tax ma% be assessed within the period a"reed

upon. The period so a"reed upon ma% be extended b% subse,uent written a"reement made before the expiration of the

period preious!% a"reed upon.

c )n% interna! reenue tax which has been assessed within the period of !imitation as prescribed in para"raph a hereof

ma% be co!!ected b% distraint or !e% or b% a proceedin" in court within fie 3 %ears fo!!owin" the assessment of the tax.

d )n% interna! reenue tax$ which has been assessed within the period a"reed upon as proided in para"raph b

hereinaboe$ ma% be co!!ected b% distraint or !e% or b% a proceedin" in court within the period a"reed upon in writin"

before the expiration of the fie 3 -%ear period. The period so a"reed upon ma% be extended b% subse,uent written

a"reements made before the expiration of the period preious!% a"reed upon.

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)n% proision of existin" "enera! or specia! !aw to the contrar% notwithstandin"$ the boo+s of accounts and other pertinent

records of tax-exempt or"ani6ations or "rantees of tax incenties sha!! be sub#ect to examination b% the 'ureau of Interna!

(eenue for purposes of ascertainin" comp!iance with the conditions under which the% hae been "ranted tax exemptions

or tax incenties$ and their tax !iabi!it%$ if an%.

Sec. 188. &ai!ure to be% Summons. - )n% person who$ bein" du!% summoned to appear to testif%$ or to appear and

produce boo+s of accounts$ records$ memoranda or other papers$ or to furnish information as re,uired under the pertinent

proisions of this Code$ ne"!ects to appear or to produce such boo+s of accounts$ records$ memoranda or other papers$ or

to furnish such information$ sha!!$ upon coniction$ be punished b% a fine of not !ess than &ie thousand pesos P3$222 but not more than ten thousand pesos P52$222 and suffer imprisonment of not !ess than one 5 %ear but not more than

two 1 %ears.

PE(ID

SEC. 127. Period of Limitation <pon )ssessment and Co!!ection. - Except as proided in Section 111$ interna! reenue

taxes sha!! be assessed within three 7 %ears after the !ast da% prescribed b% !aw for the fi!in" of the return$ and no

proceedin" in court without assessment for the co!!ection of such taxes sha!! be be"un after the expiration of such period

Proided$ That in a case where a return is fi!ed be%ond the period prescribed b% !aw$ the three 7-%ear period sha!! be

counted from the da% the return

was fi!ed. &or purposes of this Section$ a return fi!ed before the !ast da% prescribed b% !aw for the fi!in" thereof sha!! be

considered as fi!ed on such !ast da%.

SEC. 14=. Cii! Pena!ties. -

) There sha!! be imposed$ in addition to the tax re,uired to be paid$ a pena!t% e,uia!ent to twent%-fie percent 13 of

the amount due$ in the fo!!owin" cases

5 &ai!ure to fi!e an% return and pa% the tax due thereon as re,uired under the proisions of this Code or ru!es and

re"u!ations on the date prescribed0 or

1 <n!ess otherwise authori6ed b% the Commissioner$ fi!in" a return with an interna! reenue officer other than those withwhom the return is re,uired to be fi!ed0 or

7 &ai!ure to pa% the deficienc% tax within the time prescribed for its pa%ment in the notice of assessment0 or

4 &ai!ure to pa% the fu!! or part of the amount of tax shown on an% return re,uired to be fi!ed under the proisions of this

Code or ru!es and re"u!ations$ or the fu!! amount of tax due for which no return is re,uired to be fi!ed$ on or before the

date prescribed for its pa%ment.

' In case of wi!!fu! ne"!ect to fi!e the return within the period prescribed b% this Code or b% ru!es and re"u!ations$ or in

case a fa!se or fraudu!ent return is wi!!fu!!% made$ the pena!t% to be imposed sha!! be fift% percent 32 of the tax or of

the deficienc% tax$ in case$ an% pa%ment has been made on the basis of such return before the discoer% of the fa!sit% or

fraud Proided$ That a substantia! underdec!aration of taxab!e sa!es$ receipts or income$ or a substantia! oerstatement of

deductions$ as determined b% the Commissioner pursuant to the ru!es and re"u!ations to be promu!"ated b% the Secretar%

of &inance$ sha!! constitute prima facie eidence of a fa!se or fraudu!ent return Proided$ further$ That fai!ure to report

sa!es$ receipts or income in an amount exceedin" thirt% percent 72 of that dec!ared per return$ and a c!aim of

deductions in an amount exceedin" 72 of actua! deductions$ sha!! render the taxpa%er !iab!e for substantia!

underdec!aration of sa!es$ receipts or income or for oerstatement of deductions$ as mentioned herein

Suspension of prescriptie period/exceptions

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SEC. 127. Period of Limitation <pon )ssessment and Co!!ection. - Except as proided in Section 111$ interna! reenue

taxes sha!! be assessed within three 7 %ears after the !ast da% prescribed b% !aw for the fi!in" of the return$ and no

proceedin" in court without assessment for the co!!ection of such taxes sha!! be be"un after the expiration of such period

Proided$ That in a case where a return is fi!ed be%ond the period prescribed b% !aw$ the three 7-%ear period sha!! be

counted from the da% the return was fi!ed. &or purposes of this Section$ a return fi!ed before the !ast da% prescribed b% !aw

for the fi!in" thereof sha!! be considered as fi!ed on such !ast da%.
















e Proided$ howeer$ That nothin" in the immediate!% precedin" and para"raph a hereof sha!! be construed to

authori6e the examination and inesti"ation or in,uir% into an% tax return fi!ed in accordance with the proisions of an%

tax amnest% !aw or decree.

SEC. 117. Suspension of (unnin" of Statute of Limitations. - The runnin" of the Statute of Limitations proided in

Sections 127 and 111 on the ma+in" of assessment and the be"innin" of distraint or !e% a proceedin" in court for

co!!ection$ in respect of an% deficienc%$ sha!! be suspended for the period durin" which the Commissioner is prohibited

from ma+in" the assessment or be"innin" distraint or !e% or a proceedin" in court and for sixt% 82 da%s thereafter0

when the taxpa%er re,uests for a reinesti"ation which is "ranted b% the Commissioner0 when the taxpa%er cannot be

!ocated in the address "ien b% him in the return fi!ed upon which a tax is bein" assessed or co!!ected Proided$that$ if the

taxpa%er informs the Commissioner of an% chan"e in address$ the runnin" of the Statute of Limitations wi!! not be

suspended0 when the warrant of distraint or !e% is du!% sered upon the taxpa%er$ his authori6ed representatie$ or a

member of his househo!d with sufficient discretion$ and no propert% cou!d be !ocated0 and when the taxpa%er is out of the

Phi!ippines.

ow to protest or dispute an assessment administratie!%

SEC. 11=. Protestin" of )ssessment. - >hen the Commissioner or his du!% authori6ed representatie finds that proper

taxes shou!d be assessed$ he sha!! first notif% the taxpa%er of his findin"s Proided$ howeer$ That a preassessment notice

sha!! not be re,uired in the fo!!owin" cases

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d >hen the excise tax due on exciseab!e artic!es has not been paid0 or

e >hen the artic!e !oca!!% purchased or imported b% an exempt person$ such as$ but not !imited to$ ehic!es$ capita!

e,uipment$ machineries and spare parts$ has been so!d$ traded or transferred to non-exempt persons.

The taxpa%ers sha!! be informed in writin" of the !aw and the facts on which the assessment is made0 otherwise$ the

assessment sha!! be oid.

>ithin a period to be prescribed b% imp!ementin" ru!es and re"u!ations$ the taxpa%er sha!! be re,uired to respond to said

notice. If the taxpa%er fai!s to respond$ the Commissioner or his du!% authori6ed representatie sha!! issue an assessment

based on his findin"s.

Such assessment ma% be protested administratie!% b% fi!in" a re,uest for reconsideration or reinesti"ation within thirt%

72 da%s from receipt of the assessment in such form and manner as ma% be prescribed b% imp!ementin" ru!es and

re"u!ations.

>ithin sixt% 82 da%s from fi!in" of the protest$ a!! re!eant supportin" documents sha!! hae been submitted0 otherwise$

the assessment sha!! become fina!.

If the protest is denied in who!e or in part$ or is not acted upon within one hundred ei"ht% 5=2 da%s from submission of

documents$ the taxpa%er aderse!% affected b% the decision or inaction ma% appea! to the Court of Tax )ppea!s withinthirt% 72 da%s from receipt of the said decision$ or from the !apse of one hundred ei"ht% 5=2-da% period0 otherwise$ the

decision sha!! become fina!$ executor% and demandab!e.

9on- retroactiit%

SEC. 148. 9on-(etroactiit% of (u!in"s. - )n% reocation$ modification or reersa! of an% of the ru!es and re"u!ations

promu!"ated in accordance with the precedin" Sections or an% of the ru!in"s or circu!ars promu!"ated b% the

Commissioner sha!! not be "ien retroactie app!ication if the reocation$ modification or reersa! wi!! be pre#udicia! to

the taxpa%ers$ except in the fo!!owin" cases

a >here the taxpa%er de!iberate!% misstates or omits materia! facts from his return or an% document re,uired of him b%

the 'ureau of Interna! (eenue0

b >here the facts subse,uent!% "athered b% the 'ureau of Interna! (eenue are materia!!% different from the facts on

which the ru!in" is based0 or

c >here the taxpa%er acted in bad faith.

(u!in" of first impression

SEC. *. )uthorit% of the Commissioner to De!e"ate Power. - The Commissioner ma% de!e"ate the powers ested in him

under the pertinent proisions of this Code to an% or such subordinate officia!s with the ran+ e,uia!ent to a diision chief

or hi"her$ sub#ect to such !imitations and restrictions as ma% be imposed under ru!es and re"u!ations to be promu!"ated b%

the Secretar% of finance$ upon recommendation of the Commissioner Proided$ howeer$ That the fo!!owin" powers of

the Commissioner sha!! not be de!e"ated

a The power to recommend the promu!"ation of ru!es and re"u!ations b% the Secretar% of &inance0

b The power to issue ru!in"s of first impression or to reerse$ reo+e or modif% an% existin" ru!in" of the 'ureau0

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c The power to compromise or abate$ under Sec. 124 ) and ' of this Code$ an% tax!iabi!it% Proided$ howeer$ That

assessments issued b% the re"iona! offices ino!in"basic deficienc% taxes of &ie hundred thousand pesos P322$222 or

!ess$ and minorcrimina! io!ations$ as ma% be determined b% ru!es and re"u!ations to be promu!"ated b%the Secretar% of

finance$ upon recommendation of the Commissioner$ discoered b%re"iona! and district officia!s$ ma% be compromised b%

a re"iona! ea!uation board whichsha!! be composed of the (e"iona! Director as Chairman$ the )ssistant (e"iona!

Director$the heads of the Le"a!$ )ssessment and Co!!ection Diisions and the (eenue District fficer hain" #urisdiction

oer the taxpa%er$ as members0 and

d The power to assi"n or reassi"n interna! reenue officers to estab!ishments where artic!es sub#ect to excise tax are produced or +ept.

(EBIE>/)PPE)L T SEC

SEC. 4. Power of the Commissioner to Interpret Tax Laws and to Decide Tax Cases. - The power to interpret the

proisions of this Code and other tax !aws sha!! be under the exc!usie and ori"ina! #urisdiction of the Commissioner$

sub#ect to reiew b% the Secretar% of &inance.

The power to decide disputed assessments$ refunds of interna! reenue taxes$ fees or other char"es$ pena!ties imposed in

re!ation thereto$ or other matters arisin" under this Code or other !aws or portions thereof administered b% the 'ureau of

Interna! (eenue is ested in the Commissioner$ sub#ect to the exc!usie appe!!ate #urisdiction of the Court of Tax

)ppea!s.

(E;EDIES

P(EC(IPTIBE PE(ID T CLLECT
















e Proided$ howeer$ That nothin" in the immediate!% precedin" and para"raph a hereof sha!! be construed to

authori6e the examination and inesti"ation or in,uir% into an% tax return fi!ed in accordance with the proisions of an%

tax amnest% !aw or decree.

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)D;I9IST()TIBE (E;EDIES

CIBIL (E;EDIES &( CLLECTI9 & T)FES

SEC. 123. (emedies for the Co!!ection of De!in,uent Taxes. - The cii! remedies for the co!!ection of interna! reenue

taxes$ fees or char"es$ and an% increment thereto resu!tin" from de!in,uenc% sha!! be

a '% distraint of "oods$ chatte!s$ or effects$ and other persona! propert% of whateer character$ inc!udin" stoc+s and

other securities$ debts$ credits$ ban+ accounts and interest in and ri"hts to persona! propert%$ and b% !e% upon rea!

propert% and interest in ri"hts to rea! propert%0 and

b '% cii! or crimina! action.

Either of these remedies or both simu!taneous!% ma% be pursued in the discretion of the authorities char"ed with the

co!!ection of such taxes Proided$ howeer$ That the remedies of distraint and !e% sha!! not be aai!ed of where the

amount of tax ino!e is not more than ne hundred pesos P522.

The #ud"ment in the crimina! case sha!! not on!% impose the pena!t% but sha!! a!so order pa%ment of the taxes sub#ect of

the crimina! case as fina!!% decided b% the Commissioner.

The 'ureau of Interna! (eenue sha!! adance the amounts needed to defra% costs of co!!ection b% means of cii! or

crimina! action$ inc!udin" the preseration or transportation of persona! propert% distrained and the adertisement and sa!e

thereof$ as we!! as of rea! propert% and improements thereon.

SEC. 128. Constructie Distraint of the Propert% of a Taxpa%er. - To safe"uard the interest of the :oernment$ the

Commissioner ma% p!ace under constructie distraint the propert% of a de!in,uent taxpa%er or an% taxpa%er who$ in his

opinion$ is retirin" from an% business sub#ect to tax$ or is intendin" to !eae the Phi!ippines or to remoe his propert%therefrom or to hide or concea! his propert% or to perform an% act tendin" to obstruct the proceedin"s for co!!ectin" the tax

due or which ma% be due from him.

The constructie distraint of persona! propert% sha!! be affected b% re,uirin" the taxpa%er or an% person hain" possession

or contro! of such propert% to si"n a receipt coerin" the propert% distrained and ob!i"ate himse!f to presere the same

intact and una!tered and not to dispose of the same 0in an% manner whateer$ without the express authorit% of the

Commissioner.

In case the taxpa%er or the person hain" the possession and contro! of the propert% sou"ht to be p!aced under constructie

distraint refuses or fai!s to si"n the receipt herein referred to$ the reenue officer effectin" the constructie distraint sha!!

proceed to prepare a !ist of such propert% and$ in the presence of two 1 witnessed$ !eae a cop% thereof in the premiseswhere the propert% distrained is !ocated$ after which the said propert% sha!! be deemed to hae been p!aced under

constructie distraint.

SEC. 12*. Summar% (emedies. -

) Distraint of Persona! Propert%. - <pon the fai!ure of the person owin" an% de!in,uent tax or de!in,uent reenue to pa%

the same at the time re,uired$ the Commissioner or his du!% authori6ed representatie$ if the amount ino!ed is in excess

of ne mi!!ion pesos P5$222$222$ or the (eenue District fficer$ if the amount ino!ed is ne mi!!ion pesos

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P5$222$222 or !ess$ sha!! sei6e and distraint an% "oods$ chatte!s or effects$ and the persona! propert%$ inc!udin" stoc+s

and other securities$ debts$ credits$ ban+ accounts$ and interests in and ri"hts to persona! propert% of such persons 0in

sufficient ,uantit% to satisf% the tax$ or char"e$ to"ether with an% increment thereto incident to de!in,uenc%$ and the

expenses of the distraint and the cost of the subse,uent sa!e.

) report on the distraint sha!!$ within ten 52 da%s from receipt of the warrant$ be submitted b% the distrainin" officer to

the (eenue District fficer$ and to the (eenue (e"iona! Director Proided$ That the Commissioner or his du!%

authori6ed representatie sha!!$ sub#ect to ru!es and re"u!ations promu!"ated b% the Secretar% of &inance$ upon

recommendation of the Commissioner$ hae the power to !ift such order of distraint Proided$ further$ That a conso!idatedreport b% the (eenue (e"iona! Director ma% be re,uired b% the Commissioner as often as necessar%.

' Le% on (ea! Propert%. - )fter the expiration of the time re,uired to pa% the de!in,uent tax or de!in,uent reenue as

prescribed in this Section$ rea! propert% ma% be !eied upon$ before simu!taneous!% or after the distraint of persona!

propert% be!on"in" to the de!in,uent. To this end$ an% interna! reenue officer desi"nated b% the Commissioner or his du!%

authori6ed representatie sha!! prepare a du!% authenticated certificate showin" the name of the taxpa%er and the amounts

of the tax and pena!t% due from him. Said certificate sha!! operate with the force of a !e"a! execution throu"hout the

Phi!ippines.

Le% sha!! be affected b% writin" upon said certificate a description of the propert% upon which !e% is made. )t the same

time$ written notice of the !e% sha!! be mai!ed to or sered upon the (e"ister of Deeds for the proince or cit% where the propert% is !ocated and upon the de!in,uent taxpa%er$ or if he be absent from the Phi!ippines$ to his a"ent or the mana"er

of the business in respect to which the !iabi!it% arose$ or if there be none$ to the occupant of the propert% in ,uestion.

In case the warrant of !e% on rea! propert% is not issued before or simu!taneous!% with the warrant of distraint on persona!

propert%$ and the persona! propert% of the taxpa%er is not sufficient to satisf% his tax de!in,uenc%$ the Commissioner or his

du!% authori6ed representatie sha!!$ within thirt% 72 da%s after execution of the distraint$ proceed with the !e% on the

taxpa%ers rea! propert%.

>ithin ten 52 da%s after receipt of the warrant$ a report on an% !e% sha!! be submitted b% the !e%in" officer to the

Commissioner or his du!% authori6ed representatie Proided$ howeer$ That a conso!idated report b% the (eenue

(e"iona! Director ma% be re,uired b% the Commissioner as often as necessar% Proided$ further$ That the Commissioneror his du!% authori6ed representatie$ sub#ect to ru!es and re"u!ations promu!"ated b% the Secretar% of &inance$ upon

recommendation of the Commissioner$ sha!! hae the authorit% to !ift warrants of !e% issued in accordance with the

proisions hereof.

SEC. 12=. Procedure for Distraint and :arnishment. - The officer serin" the warrant of distraint sha!! ma+e or cause to

be made an account of the "oods$ chatte!s$ effects or other persona! propert% distrained$ a cop% of which$ si"ned b%

himse!f$ sha!! be !eft either with the owner or person from whose possession such "oods$ chatte!s$ or effects or other

persona! propert% were ta+en$ or at the dwe!!in" or p!ace of business of such person and with someone of suitab!e a"e and

discretion$ to which !ist sha!! be added a statement of the sum demanded and note of the time and p!ace of sa!e.

Stoc+s and other securities sha!! be distrained b% serin" a cop% of the warrant of distraint upon the taxpa%er and upon the

president$ mana"er$ treasurer or other responsib!e officer of the corporation$ compan% or association$ which issued the said

stoc+s or securities.

Debts and credits sha!! be distrained b% !eain" with the person owin" the debts or hain" in his possession or under his

contro! such credits$ or with his a"ent$ a cop% of the warrant of distraint. The warrant of distraint sha!! be sufficient

authorit% to the person ownin" the debts or hain" in his possession or under his contro! an% credits be!on"in" to the

taxpa%er to pa% to the Commissioner the amount of such debts or credits.

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'an+ accounts sha!! be "arnished b% serin" a warrant of "arnishment upon the taxpa%er and upon the president$ mana"er$

treasurer or other responsib!e officer of the ban+. <pon receipt of the warrant of "arnishment$ the ban+ sha!! tun oer to

the Commissioner so much of the ban+ accounts as ma% be sufficient to satisf% the c!aim of the :oernment.

SEC. 12A. Sa!e of Propert% Distrained and Disposition of Proceeds. - The (eenue District fficer or his du!% authori6ed

representatie$ other than the officer referred to in Section 12= of this Code sha!!$ accordin" to ru!es and re"u!ations

prescribed b% the Secretar% of &inance$ upon recommendation of the Commissioner$ forthwith cause a notification to beexhibited in not !ess than two 1 pub!ic p!aces in the municipa!it% or cit% where the distraint is made$ specif%in"0 the time

and p!ace of sa!e and the artic!es distrained. The time of sa!e sha!! not be !ess than twent% 12 da%s after notice. ne p!ace

for the postin" of such notice sha!! be at the ffice of the ;a%or of the cit% or municipa!it% in which the propert% is

distrained.

)t the time and p!ace fixed in such notice$ the said reenue officer sha!! se!! the "oods$ chatte!s$ or effects$ or other

persona! propert%$ inc!udin" stoc+s and other securities so distrained$ at pub!ic auction$ to the hi"hest bidder for cash$ or

with the approa! of the Commissioner$ throu"h du!% !icensed commodit% or stoc+ exchan"es.

In the case of Stoc+s and other securities$ the officer ma+in" the sa!e sha!! execute a bi!! of sa!e which he sha!! de!ier to

the bu%er$ and a cop% thereof furnished the corporation$ compan% or association which issued the stoc+s or othersecurities. <pon receipt of the cop% of the bi!! of sa!e$ the corporation$ compan% or association sha!! ma+e the

correspondin" entr% in its boo+s$ transfer the stoc+s or other securities so!d in the name of the bu%er$ and issue$ if re,uired

to do so$ the correspondin" certificates of stoc+ or other securities.

)n% residue oer and aboe what is re,uired to pa% the entire c!aim$ inc!udin" expenses$ sha!! be returned to the owner of

the propert% so!d. The expenses char"eab!e upon each sei6ure and sa!e sha!! embrace on!% the actua! expenses of sei6ure

and preseration of the propert% pendin" 0the sa!e$ and no char"e sha!! be imposed for the serices of the !oca! interna!

reenue officer or his deput%.

SEC. 152. (e!ease of Distrained Propert% <pon Pa%ment Prior to Sa!e. - If at an% time prior to the consummation of the

sa!e a!! proper char"es are paid to the officer conductin" the sa!e$ the "oods or effects distrained sha!! be restored to the

owner.

SEC. 155. (eport of Sa!e to 'ureau of Interna! (eenue. - >ithin two 1 da%s after the sa!e$ the officer ma+in" the same

sha!! ma+e a report of his proceedin"s in writin" to the Commissioner and sha!! himse!f presere a cop% of such report as

an officia! record.

SEC. 151. Purchase b% :oernment at Sa!e <pon Distraint. - >hen the amount bid for the propert% under distraint is not

e,ua! to the amount of the tax or is er% much !ess than the actua! mar+et a!ue of the artic!es offered for sa!e$ the

Commissioner or his deput% ma% purchase the same in beha!f of the nationa! :oernment for the amount of taxes$

pena!ties and costs due thereon.

Propert% so purchased ma% be reso!d b% the Commissioner or his deput%$ sub#ect to the ru!es and re"u!ations prescribed b%

the Secretar% of &inance$ the net proceeds therefrom sha!! be remitted to the 9ationa! Treasur% and accounted for as

interna! reenue.

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SEC. 157. )dertisement and Sa!e. - >ithin twent% 12 da%s after !e%$ the officer conductin" the proceedin"s sha!!

proceed to adertise the propert% or a usab!e portion thereof as ma% be necessar% to satisf% the c!aim and cost of sa!e0 and

such adertisement sha!! coer a period of a !east thirt% 72 da%s. It sha!! be effectuated b% postin" a notice at the main

entrance of the municipa! bui!din" or cit% ha!! and in pub!ic and conspicuous p!ace in the barrio or district in which the

rea! estate !ies and 0b% pub!ication once a wee+ for three 7 wee+s in a newspaper of "enera! circu!ation in the

municipa!it% or cit% where the propert% is !ocated. The adertisement sha!! contain a statement of the amount of taxes and

pena!ties so due and the time and p!ace of sa!e$ the name of the taxpa%er a"ainst whom taxes are !eied$ and a short

description of the propert% to be so!d. )t an% time before the da% fixed for the sa!e$ the taxpa%er ma% discontinue a!!

proceedin"s b% pa%in" the taxes$ pena!ties and interest. If he does not do so$ the sa!e sha!! proceed and sha!! be he!d either

at the main entrance of the municipa! bui!din" or cit% ha!!$ or on the premises to be so!d$ as the officer conductin" the

proceedin"s sha!! determine and as the notice of sa!e sha!! specif%.

>ithin fie 3 da%s after the sa!e$ a return b% the distrainin" or !e%in" officer of the proceedin"s sha!! be entered upon

the records of the (eenue Co!!ection fficer$ the (eenue District officer and the (eenue (e"iona! Director. The

(eenue Co!!ection fficer$ in consu!tation with the (eenue district fficer$ sha!! then ma+e out and de!ier to the

purchaser a certificate from his records$ showin" the proceedin"s of the sa!e$ describin" the propert% so!d statin" the name

of the purchaser and settin" out the exact amount of a!! taxes$ pena!ties and interest Proided$ howeer$ That in case the

proceeds of the sa!e exceeds the c!aim and cost of sa!e$ the excess sha!! be turned oer to the owner of the propert%.

The (eenue Co!!ection fficer$ upon approa! b% the (eenue District fficer ma%$ out of his co!!ection$ adance an

amount sufficient to defra% the costs of co!!ection b% means of the summar% remedies proided for in this Code$ inc!udin"

0the preseration or transportation in case of persona! propert%$ and the adertisement and subse,uent sa!e$ both in cases

of persona! and rea! propert% inc!udin" improements found on the !atter. In his month!% co!!ection reports$ such adances

sha!! be ref!ected and supported b% receipts.

SEC. 154. (edemption of Propert% So!d. - >ithin one 5 %ear from the date of sa!e$ the de!in,uent taxpa%er$ or an% one

for him$ sha!! hae the ri"ht of pa%in" to the (eenue District fficer the amount of the pub!ic taxes$ pena!ties$ and

interest thereon from the date of de!in,uenc% to the date of sa!e$ to"ether with interest on said purchase price at the rate of

fifteen percent 53 per annum from the date of purchase to the date of redemption$ and such pa%ment sha!! entit!e the person pa%in" to the de!ier% of the certificate issued to the purchaser and a certificate from the said (eenue District

fficer that he has thus redeemed the propert%$ and the (eenue District fficer sha!! forthwith pa% oer to the purchaser

the amount b% which such propert% has thus been redeemed$ and said propert% thereafter sha!! be free form the !ien of

such taxes and pena!ties.

The owner sha!! not$ howeer$ be depried of the possession of the said propert% and sha!! be entit!ed to the rents and

other income thereof unti! the expiration of the time a!!owed for its redemption.

SEC. 153. &orfeiture to :oernment for >ant of 'idder. - In case there is no bidder for rea! propert% exposed for sa!e asherein aboe proided or if the hi"hest bid is for an amount insufficient to pa% the taxes$ pena!ties and costs$ the Interna!

(eenue fficer conductin" the sa!e sha!! dec!are the propert% forfeited to the :oernment in satisfaction of the c!aim in

,uestion and within two 1 da%s thereafter$ sha!! ma+e a return of his proceedin"s and the forfeiture which sha!! be spread

upon the records of his office. It sha!! be the dut% of the (e"ister of Deeds concerned$ upon re"istration with his office of

an% such dec!aration of forfeiture$ to transfer the tit!e of the propert% forfeited to the :oernment without the necessit% of

an order from a competent court.

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>ithin one 5 %ear from the date of such forfeiture$ the taxpa%er$ or an% one for him ma% redeem said propert% b% pa%in"

to the Commissioner or the !atters (eenue Co!!ection fficer the fu!! amount of the taxes and pena!ties$ to"ether with

interest thereon and the costs of sa!e$ but if the propert% be not thus redeemed$ the forfeiture sha!! become abso!ute.

SEC. 158. (esa!e of (ea! Estate Ta+en for Taxes. - The Commissioner sha!! hae char"e of an% rea! estate obtained b% the

:oernment of the Phi!ippines in pa%ment or satisfaction of taxes$ pena!ties or costs arisin" under this Code or in

compromise or ad#ustment of an% c!aim therefore$ and said Commissioner ma%$ upon the "iin" of not !ess than twent%12 da%s notice$ se!! and dispose of the same of pub!ic auction or with prior approa! of the Secretar% of &inance$ dispose

of the same at priate sa!e. In either case$ the proceeds of the sa!e sha!! be deposited with the 9ationa! Treasur%$ and an

accountin" of the same sha!! rendered to the Chairman of the Commission on )udit.

SEC. 15*. &urther Distraint or Le%. - The remed% b% distraint of persona! propert% and !e% on rea!t% ma% be repeated if

necessar% unti! the fu!! amount due$ inc!udin" a!! expenses$ is co!!ected

T)F LIE9

SEC. 15=. In#unction not )ai!ab!e to (estrain Co!!ection of Tax. - 9o court sha!! hae the authorit% to "rant an in#unction

to restrain the co!!ection of an% nationa! interna! reenue tax$ fee or char"e imposed b% this Code.

SEC. 15A. 9ature and Extent of Tax Lien. - If an% person$ corporation$ partnership$ #oint-account cuentas en

participacion$ association or insurance compan% !iab!e to pa% an interna! reenue tax$ ne"!ects or refuses to pa% the same

after demand$ the amount sha!! be a !ien in faor of the :oernment of the Phi!ippines from the time when the assessment

was made b% the Commissioner unti! paid$ with interests$ pena!ties$ and costs that ma% accrue in addition thereto upon a!!

propert% and ri"hts to propert% be!on"in" to the taxpa%er Proided$ That this !ien sha!! not be a!id a"ainst an% mort"a"ee

purchaser or #ud"ment creditor unti! notice of such !ien sha!! be fi!ed b% the Commissioner in the office of the (e"ister of

Deeds of the proince or cit% where the propert% of the taxpa%er is situated or !ocated.

9 I9G<9CTI9

SEC. 15=. In#unction not )ai!ab!e to (estrain Co!!ection of Tax. - 9o court sha!! hae the authorit% to "rant an in#unction

to restrain the co!!ection of an% nationa! interna! reenue tax$ fee or char"e imposed b% this Code.



a '% distraint of "oods$ chatte!s$ or effects$ and other persona! propert% of whateer character$ inc!udin" stoc+s and

other securities$ debts$ credits$ ban+ accounts and interest in and ri"hts to persona! propert%$ and b% !e% upon rea!

propert% and interest in ri"hts to rea! propert%0 and


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crimina! action$ inc!udin" the preseration or transportation of persona! propert% distrained and the adertisement and sa!ethereof$ as we!! as of rea! propert% and improements thereon.G<DICI)L (E;EDIES

SEC. 112. &orm and ;ode of Proceedin" in )ctions )risin" under this Code. - Cii! and crimina! actions and proceedin"s

instituted in beha!f of the :oernment under the authorit% of this Code or other !aw enforced b% the 'ureau of Interna!

(eenue sha!! be brou"ht in the name of the :oernment of the Phi!ippines and sha!! be conducted b% !e"a! officers of the

'ureau of Interna! (eenue but no cii! or crimina! action for the recoer% of taxes or the enforcement of an% fine$

pena!t% or forfeiture under this Code sha!! be fi!ed in court without the approa! of the Commissioner.

SEC. 115. (emed% for Enforcement of Statutor% Pena! Proisions. - The remed% for enforcement of statutor% pena!ties of

a!! sorts sha!! be b% crimina! or cii! action$ as the particu!ar situation ma% re,uire$ sub#ect to the approa! of the

Commissioner.

ST)T<T(H DE&E9SES

ST)T<T(H &&E9SES )9D PE9)LTIES

C)PTE( I

)DDITI9S T T)F

SEC. 14*. :enera! Proisions. -

a The additions to the tax or deficienc% tax prescribed in this Chapter sha!! app!% to a!! taxes$ fees and char"es imposed

in this Code. The )mount so added to the tax sha!! be co!!ected at the same time$ in the same manner and as part of the

tax.

b If the withho!din" a"ent is the :oernment or an% of its a"encies$ po!itica! subdiisions or instrumenta!ities$ or a

"oernment-owned or contro!!ed corporation$ the emp!o%ee thereof responsib!e for the withho!din" and remittance of the

tax sha!! be persona!!% !iab!e for the additions to the tax prescribed herein.

c the term @person@$ as used in this Chapter$ inc!udes an officer or emp!o%ee of a corporation who as such officer$

emp!o%ee or member is under a dut% to perform the act in respect of which the io!ation occurs.




8/2/2019 Collated 2




1 <n!ess otherwise authori6ed b% the Commissioner$ fi!in" a return with an interna! reenue officer other than those with

whom the return is re,uired to be fi!ed0 or












deductions in an amount exceedin" 72 of actua! deductions$ sha!! render the taxpa%er !iab!e for substantia!underdec!aration of sa!es$ receipts or income or for oerstatement of deductions$ as mentioned herein.

SEC. 14A. Interest. -

) In :enera!. - There sha!! be assessed and co!!ected on an% unpaid amount of tax$ interest at the rate of twent% percent

12 per annum$ or such hi"her rate as ma% be prescribed b% ru!es and re"u!ations$ from the date prescribed for pa%ment

unti! the amount is fu!!% paid.

' Deficienc% Interest. - )n% deficienc% in the tax due$ as the term is defined in this Code$ sha!! be sub#ect to the interest

prescribed in Subsection ) hereof$ which interest sha!! be assessed and co!!ected from the date prescribed for its

pa%ment unti! the fu!! pa%ment thereof.

C De!in,uenc% Interest. - In case of fai!ure to pa%

5 The amount of the tax due on an% return to be fi!ed$ or

1 The amount of the tax due for which no return is re,uired$ or

7 ) deficienc% tax$ or an% surchar"e or interest thereon on the due date appearin" in the notice and demand of the

Commissioner$ there sha!! be assessed and co!!ected on the unpaid amount$ interest at the rate prescribed in Subsection

) hereof unti! the amount is fu!!% paid$ which interest sha!! form part of the tax.

D Interest on Extended Pa%ment. - If an% person re,uired to pa% the tax is ,ua!ified and e!ects to pa% the tax on

insta!!ment under the proisions of this Code$ but fai!s to pa% the tax or an% insta!!ment hereof$ or an% part of such amountor insta!!ment on or before the date prescribed for its pa%ment$ or where the Commissioner has authori6ed an extension of

time within which to pa% a tax or a deficienc% tax or an% part thereof$ there sha!! be assessed and co!!ected interest at the

rate hereinaboe prescribed on the tax or deficienc% tax or an% part thereof unpaid from the date of notice and demand

unti! it is paid.

SEC. 132. &ai!ure to &i!e Certain Information (eturns. - In the case of each fai!ure to fi!e an information return$ statement

or !ist$ or +eep an% record$ or supp!% an% information re,uired b% this Code or b% the Commissioner on the date prescribed

8/2/2019 Collated 2


therefor$ un!ess it is shown that such fai!ure is due to reasonab!e cause and not to wi!!fu! ne"!ect$ there sha!!$ upon notice

and demand b% the Commissioner$ be paid b% the person fai!in" to fi!e$ +eep or supp!% the same$ ne thousand pesos

5$222 for each fai!ure Proided$ howeer$ That the a""re"ate amount to be imposed for a!! such fai!ures durin" a

ca!endar %ear sha!! not exceed Twent%-fie thousand pesos P13$222.

SEC. 135. &ai!ure of a >ithho!din" )"ent to Co!!ect and (emit Tax. - )n% person re,uired to withho!d$ account for$ and

remit an% tax imposed b% this Code or who wi!!fu!!% fai!s to withho!d such tax$ or account for and remit such tax$ or aidsor abets in an% manner to eade an% such tax or the pa%ment thereof$ sha!!$ in addition to other pena!ties proided for

under this Chapter$ be !iab!e upon coniction to a pena!t% e,ua! to the tota! amount of the tax not withhe!d$ or not

accounted for and remitted.

S<(C)(:E )9D P(I;) &)CIE &()<D






1 <n!ess otherwise authori6ed b% the Commissioner$ fi!in" a return with an interna! reenue officer other than those with

whom the return is re,uired to be fi!ed0 or












deductions in an amount exceedin" 72 of actua! deductions$ sha!! render the taxpa%er !iab!e for substantia!

underdec!aration of sa!es$ receipts or income or for oerstatement of deductions$ as mentioned herein.

C(I;ES/&&E9SES/PE9)LTIES/&(&EIT<(E

SEC. 112. &orm and ;ode of Proceedin" in )ctions )risin" under this Code. - Cii! and crimina! actions and proceedin"s

instituted in beha!f of the :oernment under the authorit% of this Code or other !aw enforced b% the 'ureau of Interna!

(eenue sha!! be brou"ht in the name of the :oernment of the Phi!ippines and sha!! be conducted b% !e"a! officers of the

8/2/2019 Collated 2


'ureau of Interna! (eenue but no cii! or crimina! action for the recoer% of taxes or the enforcement of an% fine$

pena!t% or forfeiture under this Code sha!! be fi!ed in court without the approa! of the Commissioner.

SEC. 115. (emed% for Enforcement of Statutor% Pena! Proisions. - The remed% for enforcement of statutor% pena!ties of

a!! sorts sha!! be b% crimina! or cii! action$ as the particu!ar situation ma% re,uire$ sub#ect to the approa! of the

Commissioner.

SEC. 114. (emed% for Enforcement of &orfeitures. - The forfeiture of chatte!s and remoab!e fixtures of an% sort sha!! be

enforced b% the sei6ure and sa!e$ or destruction$ of the specific forfeited propert%. The forfeiture of rea! propert% sha!! be

enforced b% a #ud"ment of condemnation and sa!e in a !e"a! action or proceedin"$ cii! or crimina!$ as the case ma%

re,uire.

SEC. 113. >hen Propert% to be So!d or Destro%ed. - Sa!es of forfeited chatte!s and remoab!e fixtures sha!! be effected$ so

far as practicab!e$ in the same manner and under the same conditions as the pub!ic notice and the time and manner of sa!e

as are prescribed for sa!es of persona! propert% distrained for the non-pa%ment of taxes.

Disti!!ed spirits$ !i,uors$ ci"ars$ ci"arettes$ other manufactured products of tobacco$ and a!! apparatus used I or about thei!!icit production of such artic!es ma%$ upon forfeiture$ be destro%ed b% order of the Commissioner$ when the sa!e of the

same for consumption or use wou!d be in#urious to pub!ic hea!th or pre#udicia! to the enforcement of the !aw.

)!! other artic!es sub#ect to excise tax$ which hae been manufactured or remoed in io!ation of this Code$ as we!! as dies

for the printin" or ma+in" of interna! reenue stamps and !abe!s which are in imitation of or purport to be !awfu! stamps$

or !abe!s ma%$ upon forfeiture$ be so!d or destro%ed in the discretion of the Commissioner.

&orfeited propert% sha!! not be destro%ed unti! at !east twent% 12 da%s after sei6ure.

SEC. 118. Disposition of funds (ecoered in Le"a! Proceedin"s or btained from &orfeitures. - a!! #ud"ments and monies

recoered and receied for taxes$ costs$ forfeitures$ fines and pena!ties sha!! be paid to the Commissioner or his authori6ed

deputies as the taxes themse!es are re,uired to be paid$ and except as specia!!% proided$ sha!! be accounted for and dea!t

with the same wa%.

SEC. 11*. Satisfaction of Gud"ment (ecoered )"ainst an% Interna! (eenue fficer. - >hen an action is brou"ht a"ainst

an% Interna! (eenue officer to recoer dama"es b% reason of an% act done in the performance of officia! dut%$ and the

Commissioner is notified of such action in time to ma+e defense a"ainst the same$ throu"h the So!icitor :enera!$ an%

#ud"ment$ dama"es or costs recoered in such action sha!! be satisfied b% the Commissioner$ upon approa! of the

Secretar% of &inance$ or if the same be paid b% the person used sha!! be repaid or reimbursed to him.

9o such #ud"ment$ dama"es$ or costs sha!! be paid or reimbursed in beha!f of a person who has acted ne"!i"ent!% or in bad

faith$ or with wi!!fu! oppression.

C(I;ES$ TE( &&E9SES )9D &(&EIT<(ES

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SEC. 137. :enera! Proisions. -

a )n% person conicted of a crime pena!i6ed b% this Code sha!!$ in addition to bein" !iab!e for the pa%ment of the tax$ be

sub#ect to the pena!ties imposed herein Proided$ That pa%ment of the tax due after apprehension sha!! not constitute a

a!id defense in an% prosecutionfor io!ation of an% proision of this Code or in an% action for the forfeiture of untaxed

artic!es.

b )n% person who wi!!fu!!% aids or abets in the commission of a crime pena!i6ed herein or who causes the commission

of an% such offense b% another sha!! be !iab!e in the same manner as the principa!.

c If the offender is not a citi6en of the Phi!ippines$ he sha!! be deported immediate!% after serin" the sentence without

further proceedin"s for deportation. If he is a pub!ic officer or emp!o%ee$ the maximum pena!t% prescribed for the offense

sha!! be imposed and$ in addition$ he sha!! be dismissed from the pub!ic serice and perpetua!!% dis,ua!ified from ho!din"

an% pub!ic office$ to ote and to participate in an% e!ection. If the offender is a Certified Pub!ic )ccountant$ his certificate

as a Certified Pub!ic )ccountant sha!!$ upon coniction$ be automatica!!% reo+ed or cance!!ed.

d In the case of associations$ partnerships or corporations$ the pena!t% sha!! be imposed on the partner$ president$ "enera!

mana"er$ branch mana"er$ treasurer$ officer-in-char"e$ and the emp!o%ees responsib!e for the io!ation.

e The fines to be imposed for an% io!ation of the proisions of this Code sha!! not be !ower than the fines imposed

herein or twice the amount of taxes$ interest and surchar"es due from the taxpa%er$ whicheer is hi"her.

SEC. 134. )ttempt to Eade or Defeat Tax. - )n% person who wi!!fu!!% attempts in an% manner to eade or defeat an% tax

imposed under this Code or the pa%ment thereof sha!!$ in addition to other pena!ties proided b% !aw$ upon coniction

thereof$ be punished b% a fine not !ess than Thirt% thousand P72$222 but not more than ne hunderd thousand pesos

P522$222 and suffer imprisonment of not !ess than two 1 %ears but not more than four 4 %ears Proided$ That the

coniction or ac,uitta! obtained under this Section sha!! not be a bar to the fi!in" of a cii! suit for the co!!ection of taxes.

SEC. 133. &ai!ure to &i!e (eturn$ Supp!% Correct and )ccurate Information$ Pa% Tax >ithho!d and (emit Tax and (efund

Excess Taxes >ithhe!d on Compensation. - )n% person re,uired under this Code or b% ru!es and re"u!ations promu!"atedthereunder to pa% an% tax ma+e a return$ +eep an% record$ or supp!% correct the accurate information$ who wi!!fu!!% fai!s to

pa% such tax$ ma+e such return$ +eep such record$ or supp!% correct and accurate information$ or withho!d or remit taxes

withhe!d$ or refund excess taxes withhe!d on compensation$ at the time or times re,uired b% !aw or ru!es and re"u!ations

sha!!$ in addition to other pena!ties proided b% !aw$ upon coniction thereof$ be punished b% a fine of not !ess than Ten

thousand pesos P52$222 and suffer imprisonment of not !ess than one 5 %ear but not more than ten 52 %ears.

)n% person who attempts to ma+e it appear for an% reason that he or another has in fact fi!ed a return or statement$ or

actua!!% fi!es a return or statement and subse,uent!% withdraws the same return or statement after securin" the officia!

receiin" sea! or stamp of receipt of interna! reenue office wherein the same was actua!!% fi!ed sha!!$ upon coniction

therefor$ be punished b% a fine of not !ess than Ten thousand pesos P52$222 but not more than Twent% thousand pesos

P12$222 and suffer imprisonment of not !ess than one 5 %ear but not more than three 7 %ears.

SEC. 138. Pena! Liabi!it% of Corporations. - )n% corporation$ association or "enera! co-partnership !iab!e for an% of the

acts or omissions pena!i6ed under this Code$ in addition to the pena!ties imposed herein upon the responsib!e corporate

officers$ partners$ or emp!o%ees sha!!$ upon coniction for each act or omission$ be punished b% a fine of not !ess than

&ift% thousand pesos P32$222 but not more than ne hundred thousand pesos P522$222.

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8/2/2019 Collated 2


P72$222 but not more than &ift% thousand pesos P32$222 and suffer imprisonment of not !ess than two 1 %ears but not

more than four 4 %ears.

SEC. 13A. I!!e"a! Co!!ection of &orei"n Pa%ments. - )n% person who +nowin"!% underta+es the co!!ection of forei"n

pa%ments as proided under Section 8* of this Code without hain" obtained a !icense therefor$ or without comp!%in"

with its imp!ementin" ru!es and re"u!ations$ sha!!$ upon coniction for each act or omission$ be punished b% a fine of not

!ess than Twent% thousand pesos P12$222 but not more than &ift% thousand pesos P32$222 and suffer imprisonment ofnot !ess than one 5 %ear but not more than two 1 %ears.

SEC. 182. <n!awfu! Possession of Ci"arette Paper in 'obbins or (o!!s$ Etc. - It sha!! be un!awfu! for an% person to hae

in his possession ci"arette paper in bobbins or ro!!s$ ci"arette tippin" paper or ci"arette fi!ter tips$ without the

correspondin" authorit% therefor issued b% the Commissioner. )n% person$ importer$ manufacturer of ci"ar and ci"arettes$

who has been found "ui!t% under this Section$ sha!!$ upon coniction for each act or omission$ be punished b% a fine of not

!ess than Twent% thousand pesos P12$222 but not more than ne hundred thousand pesos P5222$222 and suffer

imprisonment for a term of not !ess than six 8 %ears and one 5 da% but not more than twe!e 51 %ears.

SEC. 185. <n!awfu! <se of Denatured )!coho!. - )n% person who for the purpose of manufacturin" an% beera"e$ uses

denatured a!coho! or a!coho! specia!!% denatured to be used for motie power or withdrawn under bond for industria! uses

or a!coho! +nowin"!% misrepresented to be denatured to be unfit for ora! inta+e or who +nowin"!% se!!s or offers for sa!e

an% beera"e made in who!e or in part from such a!coho! or who uses such a!coho! for the manufacture of !i,uid

medicina! preparations ta+en interna!!%$ or +nowin"!% se!!s or offers for sa!e such preparations containin" as an in"redient

such a!coho!$ sha!! upon coniction for each act or omission be punished b% a fine of not !ess than Twent% thousand pesos

P12$222 but not more than ne hundred thousand pesos P522$222 and suffer imprisonment for a term of not !ess than

six 8 %ears and one 5 da% but not more than twe!e 51 %ears.

)n% person who sha!! un!awfu!!% recoer or attempt to recoer b% disti!!ation or other process an% denatured a!coho! or

who +nowin"!% se!!s or offers for sa!e$ concea!s or otherwise disposes of a!coho! so recoered or redisti!!ed sha!! be

sub#ect to the same pena!ties imposed under this Section.

SEC. 181. Shipment or (emoa! of Li,uor or Tobacco Products under &a!se 9ame or 'rand or as an Imitation of an%

Existin" or therwise ?nown Product 9ame or 'rand. - )n% person who ships$ transports or remoes spirituous$

compounded or fermented !i,uors$ wines or an% manufactured products of tobacco under an% other than the proper name

or brand +nown to the trade as desi"natin" the +ind and ,ua!it% of the contents of the cas+$ bott!e or pac+a"e containin"

the same or as an imitation of an% existin" or otherwise +nown product name or brand or causes such act to be done$ sha!!$

upon coniction for each act or omission$ be punished b% a fine of not !ess than Twent% thousand pesos P12$222 but notmore than ne hundred thousand pesos P5222$222 and suffer imprisonment of not !ess than six 8 %ears and one 5

da% but not more than twe!e 51 %ears.

SEC. 187. <n!awfu! Possession or (emoa! of )rtic!es Sub#ect to Excise Tax without Pa%ment of the Tax. - )n% person

who owns and/or is found in possession of imported artic!es sub#ect to excise tax$ the tax on which has not been paid in

accordance with !aw$ or an% person who owns and/or is found in possession of imported tax-exempt artic!es other than

those to whom the% are !e"a!!% issued sha!! be punished b%

8/2/2019 Collated 2


a ) fine of not !ess than ne thousand pesos P5$222 nor more than Two thousand pesos P1$222 and suffer

imprisonment of not !ess than sixt% 82 da%s but not more than one hundred 522 da%s$ if the appraised a!ue$ to be

determined in the manner prescribed in the Tariff and Customs Code$ inc!udin" duties and taxes$ of the artic!es does not

exceed ne thousand pesos P5$222.

b ) fine of not !ess than Ten thousand pesos P52$222 but not more than Twent% thousand pesos P12$222 and suffer

imprisonment of not !ess than two 1 %ears but not more than four 4 %ears$ if the appraised a!ue$ to be determined in

the manner prescribed in the Tariff and Customs Code$ inc!udin" duties and taxes$ of the artic!es exceeds ne thousand

pesos P5$222 but does not exceed &ift% thousand pesos P32$2220

c ) fine of not !ess than Thirt% thousand pesos P72$222 but not more than Sixt% thousand pesos P82$222 and suffer

imprisonment of not !ess than four 4 %ears but not more than six 8 %ears$ if the appraised a!ue$ to be determined in the

manner prescribed in the Tariff and Customs Code$ inc!udin" duties and taxes of the artic!es is more than &ift% thousand

pesos P32$222 but does not exceed ne hundred fift% thousand pesos P532$2220 or

d ) fine of not !ess than &ift% thousand pesos P32$222 but not more than ne hundred thousand pesos P522$222 and

suffer imprisonment of not !ess than ten 52 %ears but not more than twe!e 51 %ears$ if the appraised a!ue$ to be

determined in the manner prescribed in the Tariff and Customs Code$ inc!udin" duties and taxes$ of the artic!es exceeds

ne hundred fift% thousand pesos P532$222.

)n% person who is found in possession of !oca!!% manufactured artic!es sub#ect to excise tax$ the tax on which has not

been paid in accordance with !aw$ or an% person who is found in possession of such artic!es which are exempt from excise

tax other than those to whom the same is !awfu!!% issued sha!! be punished with a fine of not !ess than 52 times the

amount of excise tax due on the artic!es found but not !ess than &ie hundred pesos P322 and suffer imprisonment of not

!ess than two 1 %ears but not more than four 4 %ears.

)n% manufacturer$ owner or person in char"e of an% artic!e sub#ect to excise tax who remoes or a!!ows or causes the

un!awfu! remoa! of an% such artic!es from the p!ace of production or bonded warehouse$ upon which the excise tax has

not been paid at the time and in the manner re,uired$ and an% person who +nowin"!% aids or abets in the remoa! of such

artic!es as aforesaid$ or concea!s the same after i!!e"a! remoa! sha!!$ for the first offense$ be punished with a fine of not

!ess than ten 52 times the amount of excise tax due on the artic!es but not !ess than ne thousand pesos P5$222 andsuffer imprisonment of not !ess than one 5 %ear but not more than two 1 %ears.

The mere unexp!ained possession of artic!es sub#ect to excise tax$ the tax on which has not been paid in accordance with

!aw$ sha!! be punishab!e under this Section.

Sec. 184. &ai!ure or refusa! to Issue (eceipts or Sa!es or Commercia! Inoices$ Bio!ations re!ated to the Printin" of such

(eceipts or Inoices and ther Bio!ations. -

a )n% person who$ bein" re,uired under Section 17* to issue receipts or sa!es or commercia! inoices$ fai!s or refuses to

issue such receipts of inoices$ issues receipts or inoices that do not tru!% ref!ect and/or contain a!! the informationre,uired to be shown therein$ or uses mu!tip!e or doub!e receipts or inoices$ sha!!$ upon coniction for each act or

omission$ be punished b% a fine of not !ess than ne thousand pesos P5$222 but not more than &ift% thousand pesos

P32$222 and suffer imprisonment of not !ess than two 1 %ears but not more than four 4 %ears.

b )n% person who commits an% of the acts enumerated hereunder sha!! be pena!i6ed in the same manner and to the same

extent as proided for in this Section

5 Printin" of receipts or sa!es or commercia! inoices without authorit% from the 'ureau of Interna! (eenue0 or

1 Printin" of doub!e or mu!tip!e sets of inoices or receipts0 or

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7 Printin" of unnumbered receipts or sa!es or commercia! inoices$ not bearin" the name$ business st%!e$ Taxpa%er

Identification 9umber$ and business address of the person or entit%.

SEC. 183. ffenses (e!atin" to Stamps. - )n% person who commits an% of the acts enumerated hereunder sha!!$ upon

coniction thereof$ be punished b% a fine of not !ess than Twent% thousand pesos P12$222 but not more than &ift%

thousand pesos P32$222 and suffer imprisonment of not !ess than four 4 %ears but not more than ei"ht = %ears

a ma+in"$ importin"$ se!!in"$ usin" or possessin" without express authorit% from the Commissioner$ an% die for printin"

or ma+in" stamps$ !abe!s$ ta"s or p!a%in" cards0

b Erasin" the cance!!ation mar+s of an% stamp preious!% used$ or a!terin" the written fi"ures or !etters or cance!!ation

mar+s on interna! reenue stamps0

c Possessin" fa!se$ counterfeit$ restored or a!tered stamps$ !abe!s or ta"s or causin" the commission of an% such offense

b% another0

d Se!!in" or offerin" for sa!e an% box or pac+a"e containin" artic!es sub#ect to excise tax with fa!se$ spurious or

counterfeit stamps or !abe!s or se!!in" from an% such fraudu!ent box$ pac+a"e or container as aforementioned0 or

e :iin" awa% or acceptin" from another$ or se!!in"$ bu%in" or usin" containers on which the stamps are not comp!ete!%

destro%ed.

Sec. 188. &ai!ure to be% Summons. - )n% person who$ bein" du!% summoned to appear to testif%$ or to appear and

produce boo+s of accounts$ records$ memoranda or other papers$ or to furnish information as re,uired under the pertinent

proisions of this Code$ ne"!ects to appear or to produce such boo+s of accounts$ records$ memoranda or other papers$ or

to furnish such information$ sha!!$ upon coniction$ be punished b% a fine of not !ess than &ie thousand pesos P3$222

but not more than ten thousand pesos P52$222 and suffer imprisonment of not !ess than one 5 %ear but not more than

two 1 %ears.

SEC. 18*. Dec!aration under Pena!ties of Per#ur%. - )n% dec!aration$ return and other statement re,uired under this Code$

sha!!$ in !ieu of an oath$ contain a written statement that the% are made under the pena!ties of per#ur%. )n% person who

wi!!fu!!% fi!es a dec!aration$ return or statement containin" information which is not true and correct as to eer% materia!

matter sha!!$ upon coniction$ be sub#ect to the pena!ties prescribed for per#ur% under the (eised Pena! Code.

SEC. 18=. ther Crimes and ffenses. -

) ;isdec!aration or ;isrepresentation of ;anufacturers Sub#ect to Excise Tax. - )n% manufacturer who$ in io!ation of

the proisions of Tit!e BI of this Code$ misdec!ares in the sworn statement re,uired therein or in the sa!es inoice$ an%

pertinent data or information sha!! be punished b% a summar% cance!!ation or withdrawa! of the permit to en"a"e in

business as a manufacturer of artic!es sub#ect to excise tax.

' &orfeiture of Propert% <sed in <n!icensed 'usiness or Dies <sed for Printin" &a!se Stamps$ Etc. - )!! chatte!s$

machiner%$ and remoab!e fixtures of an% sort used in the un!icensed production of artic!es sub#ect to excise tax sha!! be

forfeited. Dies and other e,uipment used for the printin" or ma+in" of an% interna! reenue stamp$ !abe! or ta" which is in

imitation of or purports to be a !awfu! stamp$ !abe! or ta" sha!! a!so be forfeited.

C &orfeiture of :oods I!!e"a!!% Stored or (emoed. - <n!ess otherwise specifica!!% authori6ed b% the Commissioner$ a!!

artic!es sub#ect to excise tax shou!d not be stored or a!!owed to remain in the disti!!er% warehouse$ bonded warehouse or

other p!ace where made$ after the tax thereon has been paid0 otherwise$ a!! such artic!es sha!! be forfeited. )rtic!es

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withdrawn from an% such p!ace or from customs custod% or imported into the countr% without the pa%ment of the re,uired

tax sha!! !i+ewise be forfeited.

C)PTE( III

PE9)LTIES I;PSED 9 P<'LIC &&ICE(S

SEC. 18A. Bio!ations Committed b% :oernment Enforcement fficers. - Eer% officia!$ a"ent$ or emp!o%ee of the 'ureau

of Interna! (eenue or an% other a"enc% of the :oernment char"ed with the enforcement of the proisions of this Code$

who is "ui!t% of an% of the offenses herein be!ow specified sha!!$ upon coniction for each act or omission$ be punished b%

a fine of not !ess than &ift% thousand pesos P32$222 but not more than ne hundred thousand pesos P522$222 and

suffer imprisonment of not !ess than ten 52 %ears but not more than fifteen 53 %ears and sha!! !i+ewise suffer an

additiona! pena!t% of perpetua! dis,ua!ification to ho!d pub!ic office$ to ote$ and to participate in an% pub!ic e!ection

a Extortion or wi!!fu! oppression throu"h the use of his office or wi!!fu! oppression and harassment of a taxpa%er whorefused$ dec!ined$ turned down or re#ected an% of his offers specified in para"raph d hereof0

b ?nowin"!% demandin" or receiin" an% fee$ other or "reater sums that are authori6ed b% !aw or receiin" an% fee$

compensation or reward$ except as b% !aw prescribed$ for the performance of an% dut%0

c >i!!fu!!% ne"!ectin" to "ie receipts$ as b% !aw re,uired$ for an% sum co!!ected in the performance of dut% or wi!!fu!!%

ne"!ectin" to perform an% other duties en#oined b% !aw0

d fferin" or underta+in" to accomp!ish$ fi!e or submit a report or assessment on a taxpa%er without the appropriate

examination of the boo+s of accounts or tax !iabi!it%$ or offerin" or underta+in" to submit a report or assessment !ess than

the amount due the :oernment for an% consideration or compensation$ or conspirin" or co!!udin" with another or others

to defraud the reenues or otherwise io!ate the proisions of this Code0

e 9e"!ectin" or b% desi"n permittin" the io!ation of the !aw b% an% other person0

f ;a+in" or si"nin" an% fa!se entr% or entries in an% boo+$ or ma+in" or si"nin" an% fa!se certificate or return0

" )!!owin" or conspirin" or co!!udin" with another to a!!ow the unauthori6ed retriea!$ withdrawa! or reca!! of an%

return$ statement or dec!aration after the same has been officia!!% receied b% the 'ureau of Interna! (eenue0

h ain" +now!ed"e or information of an% io!ation of this Code or of an% fraud committed on the reenues co!!ectib!e

b% the 'ureau of Interna! (eenue$ fai!ure to report such +now!ed"e or information to their superior officer$ or fai!ure to

report as otherwise re,uired b% !aw0 and

i >ithout the authorit% of !aw$ demandin" or acceptin" or attemptin" to co!!ect$ direct!% or indirect!%$ as pa%ment or

otherwise an% sum of mone% or other thin" of a!ue for the compromise$ ad#ustment or sett!ement of an% char"e or

comp!aint for an% io!ation or a!!e"ed io!ation of this Code.

Proided$ That the proisions of the fore"oin" para"raph notwithstandin"$ an% interna! reenue officer for which a prima

facie case of "rae misconduct has been estab!ished sha!!$ after due notice and hearin" of the administratie case and

sub#ect to Cii! Serice Laws$ be dismissed from the reenue serice Proided$ further$ That the term @"rae

misconduct@$ as defined in Cii! Serice Law$ sha!! inc!ude the issuance of fa+e !etters of authorit% and receipts$ for"er% of

si"nature$ usurpation of authorit% and habitua! issuance of unreasonab!e assessments.

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SEC. 1*2. <n!awfu! Diu!"ence of Trade Secrets. - Except as proided in Section *5 of this Code and Section 18 of

(epub!ic )ct 9o. 87==$ an% officer or emp!o%ee of the 'ureau of Interna! (eenue who diu!"es to an% person or ma+es

+nown in an% other manner than ma% be proided b% !aw information re"ardin" the business$ income or estate of an%

taxpa%er$ the secrets$ operation$ st%!e or wor+$ or apparatus of an% manufacturer or producer$ or confidentia! information

re"ardin" the business of an% taxpa%er$ +now!ed"e of which was ac,uired b% him in the dischar"e of his officia! duties$

sha!! upon coniction for each act or omission$ be punished b% a fine of not !ess than &ift% thousand pesos P32$222 but

not more than ne hundred thousand pesos P522$222$ or suffer imprisonment of not !ess than two 1 %ears but not morethan fie 3 %ears$ or both.

SEC. 1*5. <n!awfu! Interest of (eenue Law Enforcers in 'usiness. - )n% interna! reenue officer who is or sha!! become

interested$ direct!% or indirect!%$ in the manufacture$ sa!e or importation of an% artic!e sub#ect to excise tax under Tit!e BI

of this Code or in the manufacture or repair or sa!e$ of an% die for printin"$ or ma+in" of stamps$ or !abe!s sha!! upon

coniction for each act or omission$ be punished b% a fine of not !ess than &ie thousand pesos P3$222 but not more than

Ten thousand pesos P52$222$ or suffer imprisonment of not !ess than two 1 %ears and one 5 da% but not more than

four 4 %ears$ or both.

SEC. 1*1. Bio!ation of >ithho!din" Tax Proision. - Eer% officer or emp!o%ee of the :oernment of the (epub!ic of the

Phi!ippines or an% of its a"encies and instrumenta!ities$ its po!itica! subdiisions$ as we!! as "oernment-owned or

contro!!ed corporations$ inc!udin" the 'an"+o Sentra! n" Pi!ipinas 'SP$ who$ under the proisions of this Code or ru!es

and re"u!ations promu!"ated thereunder$ is char"ed with the dut% to deduct and withho!d an% interna! reenue tax and to

remit the same in accordance with the proisions of this Code and other !aws is "ui!t% of an% offense herein be!ow

specified sha!!$ upon coniction for each act or omission be punished b% a fine of not !ess than &ie thousand pesos

P3$222 but not more than &ift% thousand pesos P32$222 or suffer imprisonment of not !ess than six 8 months and one

5 da% but not more than two 1 %ears$ or both

a &ai!in" or causin" the fai!ure to deduct and withho!d an% interna! reenue tax under an% of the withho!din" tax !aws

and imp!ementin" ru!es and re"u!ations0

b &ai!in" or causin" the fai!ure to remit taxes deducted and withhe!d within the time prescribed b% !aw$ and

imp!ementin" ru!es and re"u!ations0 and

c &ai!in" or causin" the fai!ure to fi!e return or statement within the time prescribed$ or renderin" or furnishin" a fa!se or

fraudu!ent return or statement re,uired under the withho!din" tax !aws and ru!es and re"u!ations.

SEC. 1*7. Pena!t% for &ai!ure to Issue and Execute >arrant. - )n% officia! who fai!s to issue or execute the warrant of

distraint or !e% within thirt% 72 da%s after the expiration of the time prescribed in Section 12* or who is found "ui!t% of

abusin" the exercise thereof b% competent authorit% sha!! be automatica!!% dismissed from the serice after due notice andhearin".

C)PTE( IB

TE( PE9)L P(BISI9S

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SEC. 1*4. Pena!t% for Second and Subse,uent ffenses. - In the case of reincidence$ the maximum of the pena!t%

prescribed for the offense sha!! be imposed.

SEC. 1*3. Bio!ation of ther Proisions of this Code or (u!es and (e"u!ations in :enera!. - )n% person who io!ates an%

proision of this Code or an% ru!e or re"u!ation promu!"ated b% the Department of &inance$ for which no specific pena!t%

is proided b% !aw$ sha!!$ upon coniction for each act or omission$ be punished b% a fine of not more than ne thousand

pesos P5$222 or suffer imprisonment of not more than six 8 months$ or both.

SEC. 1*8. Pena!t% for Se!!in"$ Transferrin"$ Encumberin" or in )n% >a% Disposin" of Propert% P!aced <nder

Constructie Distraint. - )n% taxpa%er$ whose propert% has been p!aced under constructie distraint$ who se!!s$ transfers$

encumbers or in an% wa% disposes of said propert%$ or an% part thereof$ without the +now!ed"e and consent of the

Commissioner$ sha!!$ upon coniction for each act or omission$ be punished b% a fine of not !ess than twice the a!ue of

the propert% so so!d$ encumbered or disposed of but not !ess than &ie Thousand pesos P3$222$ or suffer imprisonment

of not !ess than two 1 %ears and one 5 da% but not more than four 4 %ears$ of both.

SEC. 1**. &ai!ure to Surrender Propert% P!aced <nder Distraint and Le%. - )n% person hain" in his possession or under

his contro! an% propert% or ri"hts to propert%$ upon which a warrant of constructie distraint$ or actua! distraint and !e%

has been issued sha!!$ upon demand b% the Commissioner or an% of his deputies executin" such warrant$ surrender such

propert% or ri"ht to propert% to the Commissioner or an% of his deputies$ un!ess such propert% or ri"ht is$ at the time of

such demand$ sub#ect to an attachment or execution under an% #udicia! process. )n% person who fai!s or refuses to

surrender an% of such propert% or ri"ht sha!! be !iab!e in his own person and estate to the :oernment in a sum e,ua! to

the a!ue of the propert% or ri"hts not so surrendered but not exceedin" the amount of the taxes inc!udin" pena!ties and

interest for the co!!ection of which such warrant had been issued$ to"ether with cost and interest if an%$ from the date of

such warrant. In addition$ such person sha!!$ upon coniction for each act or omission$ be punished b% a fine of not !ess

than &ie thousand pesos P3$222$ or suffer imprisonment of not !ess than six 8 months and one 5 da% but not more

than two 1 %ears$ or both.

SEC. 1*=. Procurin" <n!awfu! Diu!"ence of Trade Secrets. - )n% person who causes or procures an officer or emp!o%ee

of the 'ureau of Interna! (eenue to diu!"e an% confidentia! information re"ardin" the business$ income or inheritance

of an% taxpa%er$ +now!ed"e of which was ac,uired b% him in the dischar"e of his officia! duties$ and which it is un!awfu!

for him to reea!$ and an% person who pub!ishes or prints in an% manner whateer$ not proided b% !aw$ an% income$

profit$ !oss or expenditure appearin" in an% income tax return$ sha!! be punished b% a fine of not more than Two thousand

pesos P1$222$ or suffer imprisonment of not !ess than six 8 months nor more than fie 3 %ears$ or both.

SEC. 1*A. Confiscation and &orfeiture of the Proceeds or Instruments of Crime. - In addition to the pena!t% Imposed for

the io!ation of the proisions of Tit!e F of this Code$ the same sha!! carr% with it the confiscation and forfeiture in faor

of the "oernment of the proceeds of the crime or a!ue of the "oods$ and the instruments or too!s with which the crime

was committed Proided$ howeer$ That if in the course of the proceedin"s$ it is estab!ished that the instruments or too!s

used in the i!!icit act be!on" to a third person$ the same sha!! be confiscated and forfeited after due notice and hearin" in a

separate proceedin" in faor of the :oernment if such third person !eased$ !et$ chartered or otherwise entrusted the same

8/2/2019 Collated 2


to the offender Proided$ further$ That in case the !essee sub!eased$ or the borrower$ charterer$ or trustee a!!owed the use

of the instruments or too!s to the offender$ such instruments or too!s sha!!$ !i+ewise$ be confiscated and forfeitedProided$

fina!!%$ That propert% of common carriers sha!! not be sub#ect to forfeiture when used in the transaction of their business

as such common carrier$ un!ess the owner or operator of said common carrier was$ at the time of the i!!e"a! act$ a

consentin" part% or pri% thereto$ without pre#udice to the owners ri"ht of recoer% a"ainst the offender in a cii! or

crimina! action. )rtic!es which are not sub#ect of !awfu! commerce sha!! be destro%ed.

SEC. 1=2. Subsidiar% Pena!t%. - If the person conicted for io!ation of an% of the proisions of this Code has no propert%

with which to meet the fine imposed upon him b% the court$ or is unab!e to pa% such fine$ he sha!! be sub#ect to a

subsidiar% persona! !iabi!it% at the rate of one 5 da% for each Ei"ht pesos and fift% centaos P=.32 sub#ect to the ru!es

estab!ished in )rtic!e 7A of the (eised Pena! Code.

SEC. 1=5. Prescription for Bio!ations of an% Proision of this Code. - )!! io!ations of an% proision of this Code sha!!

prescribe after &ie 3 %ears.

Prescription sha!! be"in to run from the da% of the commission of the io!ation of the !aw$ and if the same be not +nown at

the time$ from the discoer% thereof and the institution of #udicia! proceedin"s for its inesti"ation and punishment.

The prescription sha!! be interrupted when proceedin"s are instituted a"ainst the "ui!t% persons and sha!! be"in to run

a"ain if the proceedin"s are dismissed for reasons not constitutin" #eopard%.

The term of prescription sha!! not run when the offender is absent from the Phi!ippines

P)H;E9T & T)F I9 C(I;I9)L C)SES

SEC. 137. :enera! Proisions. -

a )n% person conicted of a crime pena!i6ed b% this Code sha!!$ in addition to bein" !iab!e for the pa%ment of the

tax$ be sub#ect to the pena!ties imposed herein Proided$ That pa%ment of the tax due after apprehension sha!! not

constitute a a!id defense in an% prosecutionfor io!ation of an% proision of this Code or in an% action for the

forfeiture of untaxed artic!es.









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crimina! action$ inc!udin" the preseration or transportation of persona! propert% distrained and the adertisement and sa!e

thereof$ as we!! as of rea! propert% and improements thereon.

(E&<9DS >E(E >(ITTE9 CL)I; IS 9EEDED

SEC. 124. )uthorit% of the Commissioner to Compromise$ )bate and (efund or Credit Taxes. - The Commissioner ma% -

) Compromise the Pa%ment of an% Interna! (eenue Tax$ when

5 ) reasonab!e doubt as to the a!idit% of the c!aim a"ainst the taxpa%er exists0 or

1 The financia! position of the taxpa%er demonstrates a c!ear inabi!it% to pa% the assessed tax.

The compromise sett!ement of an% tax !iabi!it% sha!! be sub#ect to the fo!!owin" minimum amounts

&or cases of financia! incapacit%$ a minimum compromise rate e,uia!ent to ten percent 52 of the basic assessed tax0

and

&or other cases$ a minimum compromise rate e,uia!ent to fort% percent 42 of the basic assessed tax.

>here the basic tax ino!ed exceeds ne mi!!ion pesos P5$222.222 or where the sett!ement offered is !ess than the

prescribed minimum rates$ the compromise sha!! be sub#ect to the approa! of the Ea!uation 'oard which sha!! be

composed of the Commissioner and the four 4 Deput% Commissioners.

' )bate or Cance! a Tax Liabi!it%$ when

5 The tax or an% portion thereof appears to be un#ust!% or excessie!% assessed0 or

1 The administration and co!!ection costs ino!ed do not #ustif% the co!!ection of the

amount due.

)!! crimina! io!ations ma% be compromised except a those a!read% fi!ed in court$ or b those ino!in" fraud.

C Credit or refund taxes erroneous!% or i!!e"a!!% receied or pena!ties imposed without authorit%$ refund the a!ue of

interna! reenue stamps when the% are returned in "ood condition b% the purchaser$ and$ in his discretion$ redeem or

chan"e unused stamps that hae been rendered unfit for use and refund their a!ue upon proof of destruction. 9o credit or

refund of taxes or pena!ties sha!! be a!!owed un!ess the taxpa%er fi!es in writin" with the Commissioner a c!aim for credit

or refund within two 1 %ears after the pa%ment of the tax or pena!t% Proided$ howeer$That a return fi!ed showin" an

oerpa%ment sha!! be considered as a written c!aim for credit or refund.

) Tax Credit Certificate a!id!% issued under the proisions of this Code ma% be app!ied a"ainst an% interna! reenue tax$

exc!udin" withho!din" taxes$ for which the taxpa%er is direct!% !iab!e. )n% re,uest for conersion into refund of unuti!i6ed

tax credits ma% be a!!owed$ sub#ect to the proisions of Section 172 of this Code Proided$ That the ori"ina! cop% of the

Tax Credit Certificate showin" a creditab!e ba!ance is surrendered to the appropriate reenue officer for erification and

cance!!ation Proided$ further$ That in no case sha!! a tax refund be "ien resu!tin" from aai!ment of incenties "ranted

pursuant to specia! !aws for which no actua! pa%ment was made.

The Commissioner sha!! submit to the Chairmen of the Committee on >a%s and ;eans of both the Senate and ouse of

(epresentaties$ eer% six 8 months$ a report on the exercise of his powers under this Section$ statin" therein the

fo!!owin" facts and information$ amon" others names and addresses of taxpa%ers whose cases hae been the sub#ect of

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recommendation of the Commisioner$ secure a certificate of tax c!earance from the 'I( which certificate sha!! be

submitted to the SEC.

(E;EDH & TE T)FT)FP)HE(

SEC. 11A. (ecoer% of Tax Erroneous!% or I!!e"a!!% Co!!ected. - no suit or proceedin" sha!! be maintained in an% court for

the recoer% of an% nationa! interna! reenue tax hereafter a!!e"ed to hae been erroneous!% or i!!e"a!!% assessed or

co!!ected$ or of an% pena!t% c!aimed to hae been co!!ected without authorit%$ of an% sum a!!e"ed to hae been excessie!%

or in an% manner wron"fu!!% co!!ected without authorit%$ or of an% sum a!!e"ed to hae been excessie!% or in an% manner

wron"fu!!% co!!ected$ unti! a c!aim for refund or credit has been du!% fi!ed with the Commissioner0 but such suit or

proceedin" ma% be maintained$ whether or not such tax$ pena!t%$ or sum has been paid under protest or duress.

In an% case$ no such suit or proceedin" sha!! be fi!ed after the expiration of two 1 %ears from the date of pa%ment of the

tax or pena!t% re"ard!ess of an% superenin" cause that ma% arise after pa%ment Proided$ howeer$ That the

Commissioner ma%$ een without a written c!aim therefor$ refund or credit an% tax$ where on the face of the return upon

which pa%ment was made$ such pa%ment appears c!ear!% to hae been erroneous!% paid.

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Documents