tax 1 course syllabus

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TAX 1 COURSE SYLLABUS

I. General Principles of TaxationA. Definition and Concept of TaxationB. Nature of Taxation

CIR vs. Reyes (480 SCRA 382, 377)

C. Characteristics of TaxationD. Power of Taxation Compared with Other Powers

1. Police Power2. Power of Eminent Domain

E. Purpose of Taxation1. Revenue-raising2. Non-revenue/special or regulatoryBagatsing vs. Ramirez (74 SCRA 306)

CIR vs. Central Luzon Drug Corp (456 SCRA 414, 445)

Tio vs. Videogram Regulatory Board (151 SCRA 208)

Lutz v. Araneta (88 Phil 60)

Roxas vs. CTA (G.R. No. L-25043, 04/26/1968)

F. Principles of Sound Tax System1. Fiscal Adequacy2. Theoretical Justice3. Administrative Feasibility

G. Theory and Basis of Taxation1. Lifeblood Theory2. Necessity Theory3. Benefits- Protection Theory (Symbiotic Relationship)4.

Jurisdiction over subject and objects

CIR vs. Algue, Inc., et. al. L-28896, 02/17/1988

Philippine Guaranty Co. Inc. v. CIR 13 SCRA 775

H. Doctrines in Taxation1. Prospectivity of tax laws2. Imprescriptibility


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3. Double taxationa. Strict senseb. Broad sensec. Constitutionality of double taxationd. Modes of eliminating double taxationVillanueva vs. City of Iloilo26 SCRA 578

Ericsson Telecommunications, Inc. vs. City of Pasig, 538 SCRA 99, 114-115 (2207)

4. Escape from taxationa. Shifting of tax burden

1) Ways of shifting the tax burden2) Taxes that can be shifted3) Meaning of impact and incidence of taxation

a) Tax avoidanceb) Tax evasion

CIR vs. Toda GR 147188, 9/14/2004

5. Exemption from taxationa. Meaning of exemption from taxationb. Nature of tax exemptionc. Kinds of tax exemption

1) Express2) Implied3)

Contractual

Philippine Acetylene Co., Inc. vs. CIR (GR L-19707, 8/17/1967

d. Rationale/grounds for exemptione. Revocation of tax exemption

6. Compensation and Set-offFrancia vs. IAC 162 SCRA 753

7. Compromise8. Tax amnesty

a. Definitionb. Distinguished from tax exemption


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9. Construction and Interpretation ofa. Tax laws

1) General Rule2) Exception

b. Tax exemption and exclusionA. General RuleB. Exception

c. Tax rules and regulations1) General rule onlyBIR Ruling No. 370-2011 Imposition of 20% withholding tax on PEACE bonds

Revenue Memorandum Circular 53-2011 Taxability of voluntary contributions in

excess of compulsory contributions to SSS, GSIS, PhilHealth and Pag-IBIG

d. Penal provisions of tax lawse. Non-retroactive application to taxpayers

1)ExceptionsLorenzo vs. Pozadas, Jr., et. al. 64 Phil 353BIR Ruling No. 370-2011 Imposition of 20% withholding tax on PEACE bonds

I. Scope and Limitation of Taxation1. Inherent Limitations

a. Public purposeb. Inherently Legislative

1) General Rule2) Exceptions

a) Delegation to local governmentsb) Delegation to the Presidentc) Delegation to administrative agenciesAbakada Guro Party List v. Ermita (469 SCRA 1, 122, 123-124)

c. Territorial1) Situs of Taxation

a) Meaning


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b) Situs of Income Tax(1) From sources within the Philippines

(2) From sources without the Philippines

(3) Income partly within and partly without the Philippines

2)Situs of Property Taxes(a) Taxes on Real Property

(b) Taxes on Personal Property

3)Situs of Excise Tax(a) Estate Tax

(b) Donors Tax

4)Situs of Business Tax(a) Sale of Real Property(b) Sale of Personal Property

(c) VAT

d. International Comitye. Exemption of Government Entities, Agencies and Instrumentalities

2. Constitutional Limitationsa. Provisions Directly Affecting Taxation

1) Prohibition against imprisonment for non-payment of poll tax2) Uniformity and equality of taxation3) Grant by Congress of authority to the President to impose tariff rates4) Prohibition against taxation of religious, charitable entities and educational entities5) Prohibition against taxation of non-stock, non-profit institutions6) Majority vote of Congress for grant of tax exemption7) Prohibition on use of tax levied for special purpose8) Presidents veto power on appropriation, revenue, tariff bills9) Non-impairment of the jurisdiction of the Supreme Court10) Grant of power to the local government units to create its own sources of revenue11) Flexible tariff clause12) Exemption from real property taxes13) No appropriation or use of public money for religious purposes


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b. Provisions Indirectly Affecting Taxation1) Due process2) Equal protection3) Religious freedom4) Non-impairment of obligations on contracts

J. Stages of Taxation1. Levy2. Assessment and Collection3. Payment4. Refund

K. Definition, Nature and Characteristics of TaxesL. Requisites of a valid taxM. Tax as distinguised from other forms of exactions

1. Tariff2. Toll

Diaz vs. Secretary of Finance

3. License fee4. Special assessment5. Debt

N. Kinds of Taxes1. As to object

a. Personal, capitation or poll taxb. Property taxc. Privilege tax

2. As to burden or incidencea. Directb. Indirect

3. As to tax ratesa. Specificb. Ad valoremc. Mixed


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4. As to purposesa. General or fiscalb. Special, regulatory or sumptuary

Osmea vs. Orbos (220 SCRA 703)

5. As to scope or authority to imposea. Nationalb. Local

6. As to graduationa. Progressiveb. Regressivec. Proportionate

II. Tax Remedies under the NIRCA. Taxpayers Remedies

1. Assessment

a. Concept of assessment

1) Requisites for valid assessment

2) Constructive methods of income determination

3) Inventory method for income determination

4) Jeopardy assessment

5) Tax delinquency and tax deficiency

Commissioner of Internal Revenue vs. Court of Appeals (G.R. No. 104151)

Republic of the Philippines vs. Court of Appeals (149 SCRA 351)

b. Power of the Commissioner to make assessments and

prescribe additional requirements for tax administration and enforcement

1) Power of the Commissioner to obtain information, and

to summon/examine, and take testimony of persons

c. When assessment is made1) Prescriptive period for assessment

a) False, fraudulent, and non-filing of returns

Mambulao Lumber Company vs. Republic (132 SCRA 1)

2) Suspension of running of statute of limitations

Republic vs. Hizon (320 SCRA 574)


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d. General provisions on additions to the tax

1) Civil penalties

2) Interest

e. Assessment process

1) Tax audit

2) Notice of informal conference

3) Issuance of preliminary assessment notice (PAN)

4) Notice of informal conference

5) Issuance of preliminary assessment notice (PAN)

6) Exceptions to Issuance of PAN

7) Reply to PAN

8) Issuance of formal letter of demand and assessment notice/final assessment notice

9) Disputed assessment

10) Administrative decision on a disputed assessment

f. Protesting assessment

1) Protest of assessment by taxpayer

a) Protested assessment

b) When to file a protest

c) Forms of protest

CIR vs. Villa (22 SCRA 3)

2) Submission of documents within 60 days from filing ofprotest

3) Effect of failure to protest

g. Rendition of decision by Commissioner

1) Denial of protest

a) CIRs actions equivalent to denial of protest

(1) Filing of criminal action against taxpayer

(2) Issuing a warrant of distraint and levy

(b) Inaction by Commissioner

h. Remedies of taxpayer to action by Commissioner

1) In case of denial of protest

2) In case of inaction by Commissioner within 180 days

from submission of documents

3) Effect of failure to appeal


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2. Collectiona. Requisites

b. Prescriptive periods

c. Distraint of personal property including garnishment

1) Summary remedy of distraint of personal property

a) Procedure for distraint and garnishment

b) Sale of property distrained and disposition of proceeds

(1) Release of distrained property upon payment prior to sale

c) Purchase by the government at sale upon distraint

d) Report of sale to BIR

e) Constructive distraint to protect the interest of the government

d. Summary remedy of levy on real property

1) Advertisement and sale

2) Redemption of property sold

3) Final deed of purchaser

e. Forfeiture to government for want of bidder

1) Remedy of enforcement of forfeitures

(a) Action to contest forfeiture of chattel

(b) Resale of real estate taken for taxes

(c) When property to be sold or destroyed

(d) Disposition of funds recovered in legal proceedings or obtained from forfeiture

f. Further distraint or levy

g. Tax lien

h. Compromise

1) Authority of the Commissioner to compromise and abate taxes

i. Civil and criminal actions

1) Suit to recover tax based on false or fraudulent returns

3. Refund

a. Grounds and requisites for refund

b. Requirements for refund as laid down by cases

1) Necessity of written claim for refund


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2) Claim containing a categorical demand for reimbursement

3) Filing of administrative claim for refund and thesuit/proceeding

before the CTA within 2 years from date of payment

regardless of any supervening cause

c. Legal basis of tax refunds

d. Statutory basis for tax refund under the Tax Code

1) Scope of claims for refund

2) Necessity of proof for claim or refund

3) Burden of proof for claim of refund

4) Nature of erroneously paid tax/illegally assessed collected

5) Tax refund vis--vis tax credit

6) Essential requisites for claim of refund

e. Who may claim/apply for tax refund/tax credit

1) Taxpayer/withholding agents of non-resident foreign corporation

f. Prescriptive period for recovery of tax erroneously or illegally collected

g. Other consideration affecting tax refunds

B. Government Remedies

1. Administrative remedies

a. Tax lien

b. Levy and sale of real property

c. Forfeiture of real property to the government for want of bidder

d. Further distraint and levy

e. Suspension of business operation

f. Non-availability of injunction to restrain collection of tax

2. Judicial remedies

3. Statutory Offenses and Penalties

a. Civil penalties

1) Surcharge

2) Interest

a) In General

b) Deficiency interest

c) Delinquency interest

d) Interest on extended payment


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4. Compromise and Abatement of taxes

a. Compromise

CIR vs. Abad, etc. (G.R. No. L-19627, June 27, 1968)

b. Abatement

III. Organization and Function of the Bureau of Internal Revenue

A. Rule-making authority of the Secretary of Finance

1. Authority of Secretary of Finance to promulgate rules and regulations

2. Specific provisions to be contained in rules and regulations

3. Non-retroactivity of rulings

BIR Ruling No. 370-2011 Imposition of 20% withholding tax on PEACE bonds

B. Power of the Commissioner to suspend the business operation of a taxpayer

Oplan Kandado of the BIR

IV. Judicial Remedies; Republic Act 1125 The Act that Created the Court of Tax Appeals (CTA), asamended, and the Revised Rules of the Court of Tax Appeals

A. Jurisdiction of the Court of Tax Appeals

1. Exclusive appellate jurisdiction over civil tax cases

a. Cases within the jurisdiction of the Court en banc

b. Cases within the jurisdiction of the Court in divisions

2. Criminal cases

a. Exclusive original jurisdiction

b. Exclusive appellate jurisdiction in criminal cases

B. Judicial Procedures

1. Judicial action for collection of taxes

a. Internal revenue taxes

b. Local taxes

1) Prescriptive period

2. Civil cases

a. Who may appeal, mode of appeal, effect of appeal

1) Suspension of collection of tax

a) Injunction not available to restrain collection


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2) Taking of evidence

3) Motion for reconsideration or New trial

b. Appeal to the CTA, en banc

c. Petition for review on certiorari to the Supreme Court

3. Criminal cases

a. Institution and prosecution of criminal actions

1) Institution on civil action in criminal action

b. Appeal and period to appeal

1) Solicitor General as counsel for the People and government

officials sued in their official capacity

d. Petition for review on certiorari to the Supreme CourtC. Taxpayers suit impugning the validity of tax measures or acts oftaxing authorities

a. Taxpayers suit, definedb. Distinguished from citizens suitc. Requisites for challenging the constitutionality of a tax measure

or act of taxing authority

1) Concept of locus standi as applied in taxation2) Doctrine of transcendental importance

3) Ripeness for judicial determination

Maceda vs. Macaraig, Jr. (197 SCRA 771)Gonzales vs. Marcos (65 SCRA 624)

Abaya vs. Ebdane (515 SCRA 720)

tax 1 course syllabus

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