tax transcribe bir power funstions (1)

8/19/2019 Tax Transcribe BIR Power Funstions (1)

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FINAL VAT:

Under Section 4.114-2 of RR No. 16-05, the government or any of its political subdivisions,

instrumentalities or agencies, including GOCCs shall, before making payment on account of

each purchase of goods and/or of services taxed at 12% VAT pursuant to Sections 106 and 108

of the Tax Code, deduct and withhold a final VAT due at the rate of five percent (5%) of thegross payment thereof.

The five percent (5%) final VAT withholding rate shall represent the net VAT payable of the

seller. The remaining five percent (7%) effectively accounts for the standard input VAT for sales

of goods or services to government or any of its political subdivisions, instrumentalities or

agencies including GOCCs, in lieu of the actual input VAT directly attributable or ratably

apportioned to such sales. Should actual input VAT exceed five percent (7%) of gross payments,

the excess may form part of the sellers’ expense or cost. On the other hand, if actual input VAT

is less than (7%) of gross payment, the difference must be closed to expense or cost (or

recognized as income).

• 5% is based on the entire amount of the transaction and that includes the 12% shifted.

• It is called final vat because the moment it is witheld, it extinguishes the tax liability of

the supplier. Thus, the amount will no longer be reflected as gross sales to be subjected

to vat because once the 5 % final vat was witheld, it already extinguished the tax

liability.

COMPLIANCE REQUIREMENTS

1 VAT is paid on monthly and quarterly basis. There is monthly return for VAT and

quarterly return for VAT. Quarterly return reflects gross sales which are reported in a

cumulative basis. Thus, quarterly VAT return for the second quarter reflects those

amount included in the first quarter because it is cumulative.

2 For monthly VAT returns, they are filed within 20 days from the end of month and for

quarterly VAT returns, within 25 days following the end of the taxable quarter. Thus, if

the VAT return pertains to the month of January, it should be filed in February 20. If

VAT return pertains to the month of February, the it should be filed on March 20. If the

return pertains to the month of March, it should be filed on April 25 because it is

already the end of the taxable quarter.

3 Summary list of sales and purchases should also be filed

TAX ADMINISTRATION

General concept: There are 3 stages in the administration of taxes:

1 Levy:

2 Assessment

3 collection


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• Levy is essentially legislative. It cannot be delegated to other brances except for

instances provided in the constitution.

• Assesment: Can it be performed by the executive branch? Yes

• Collection: Can it be performed by the executive branch? Yes.

BIR : agency tasked to collect and assess taxes

BOC: can collect and assess taxes also

QUESTION: (ABAKADA CASE)

Congress power to tax administration: Is legislative veto constitutional?

LEGISLATIVE VETO: Genral rule: It is constitutional becasue of the check and balances and

separation of powers. In ABAKADA, it was declared unconstitutional. Legislature encroached

other brances prerogative. Legislative veto should be limited to powers of scrutiny and inquiry

but not supervision. The oversight commitee exercised the power of supervision in derogation

of the separation of powers.

In British American Tobacco, consider if the classification freeze provision is constitutional and

whether the delegation was proper.

THE BUREAU OF INTERNAL REVENUE

COMPOSITION AND FUNCTIONS:

1 Commissioner

4 Deputies

GENERAL FUNCTIONS BIR

1 Incharge on collection and assessment of national internal revenue taxes and not to

collect custom duties and income taxes

2 Enforcement of all forfeitures, penalties, and fines connected therewith

3 Execution of judgments in all cases decided in its favor by the CTA and ordinary courts

GENERAL DUTIES OF CIR

1 Decide disputed assessments, refunds of taxes, fees, or charges, penalties imposed in

relation therewith and other matters

2 Interpret the tax code

NOTE: Memorize powers of CIR.

SPECIFIC FUNCTIONS OF CIR

A INTERPRET TAX LAWS AND DECIDE CASES

SECTION 246. NON-RETROACTIVITY OF RULINGS. - Any revocation, modification or reversal of

any of the rules and regulations promulgated in accordance with the preceding Sections or any of the


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rulings or circulars promulgated by the Commissioner shall not be given retroactive application if the

revocation, modification or reversal will be prejudicial to the taxpayers, except in the following cases:

(a)Where the taxpayer deliberately misstates or omits material facts from his return or any document

required of him by the Bureau of Internal Revenue;

(b)Where the facts subsequently gathered by the Bureau of Internal Revenue are materially different from the facts on which the ruling is based; or

(c)Where the taxpayer acted in bad faith.

CIR VS CA AND FORTUNE:

There are two types of administrative issuances- legislative rule and interpretative rule. In

legislative rule, they give details to the law thus adding or increasing burden of a taxpayer. This

requires publication, notice and hearing. In interpretative rule, they merely interpret the law or

provide guidelines as to such. This does not require prior notice and hearing.

PBCOM vs CIR CASE (1999)

Remember that the revocation, modification or reversal stated in section 246 must be done by

the CIR and not by the COURTS. Thus in the above case, PBCom cannot argue that the

revocation of the RMC should not be applied retroactively for it is prejudicial to their right to

claim refund because the revocation was not done by the CIR but by the court. Therefore, the

revocation will apply retroactively even to the prejudice of PBCom.

NOTE: However, in the consolidated cases ofCIR vs San Roque Power Corporation, Taganito

Mining Corporation vs CIR, and Philex Mining Corporation vs CIR, dated Februray 12,

2013, the Supreme Court stated thatsection 246 is not limited to a reversal only by the

Commissioner because this Section expressly states, " Anyrevocation, modification or

reversal" without specifying who made the revocation, modification or reversal. Hence, a

reversal by this Court is covered under Section 246.

CIR vs LEAL

CIR has the power to:

1 Make opinions or rulings regarding revenue rules and regulaitons ( interprete tax laws).

2 Also, CIR has power to decide disputed assessments, refunds of taxes, fees, or charges,

penalties imposed in relation therewith and other matters.

Since what was questioned by LEAL is a ruling issued by the CIR, then LEAL cannot question

the ruling before the RTC but only before CTA. Because if CIR exercises functions under 1 and

2, the the proper appellate body is CTA.

• If CIR exercised functions in deciding claim for refund. What is the proper appellate

body? CTA.

• If it issued a ruling with respect to the propriety of a refund but not really addresing the

case with respect to a refund? What is the proper appellate body?

SEC. 4. Power of the Commissioner to Interpret Tax Laws and to Decide Tax Cases.


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The power to interpret the provisions of this Code and other tax laws shall be under the

exclusive and original jurisdiction of the Commissioner, subject to review by the Secretary

of Finance.

The power to decide disputed assessments, refunds of internal revenue taxes, fees or

other charges, penalties imposed in relation thereto, or other matters arising under this

Code or other laws or portions thereof administered by the Bureau of Internal Revenue is

vested in the Commissioner, subject to the exclusive appellate jurisdiction of the Court of

Tax Appeals.

NOTES: Leal disputed the validity of RMC. CIR decided against Leal. When CIR decided

agaisnt Leal, is it still considered as an interpretation of tax laws? No. It falls under number

2 namely other matters. Therefore, CTA has appellate jurisdicton because it no longer

involves interpretation of tax laws but it involves the decision of the CIR with respect to the

case filed by Leal attacking the validity or legality of the RMC. If instead CIR issued RMC

and another wants to attack the validity of the RMC, who has jurisdiciton of the attack? It

is the Secretary of Finance before going to courts as part of the principle of exhaustion ofadministrative remedies.

B EXAMINATION OF BOOKS OF ACCOUNTS: it is intended for BIR to obtain information in

the assessment of tax liability. It can obtain information from taxpayer and persons

transacting with the taxpayer.

LETTERS OF AUTHORITY

• Authorizes revenue officer to scrutinize taxpayers books of accounts in order to

perform his assessment functions. Without such LOA, no inspection should be

conducted.

WHO ISSUES: Issued by CIR, deputy CIR or regional director

• An LOA must be served within 30 days from the date of issue (not receipt). If LOA is

served beyond 30 days from date of issue, it is void.

• If a taxpayer is listed before the national office audit, then LOA must be issued by

the national office. If not, the taxpayer may refuse to comply. If taxpayer is listed

before the regional office audit then LOA must be issued by the regional office. If

not, the taxpayer may refuse to comply.

NOTE: Prescriptive period (3 years from date of filing return to assess tax)-to be discussed

in tax remedies proper. (If there is something wrong in the LOA, the remedy of BIR is to

issue a new LOA. Thus, if something is wrong again in the new LOA, another LOA must beissued. The advantage here is that, it may result to prescription and thus taxpayer has a

defense then. Unless BIR issues a jeopardy assessment.)

Jeopardy Assessment: an assessment where BIR would immediately issue assessment

without audit whether partial or in its entirety because of the possibility of prescription.

CIR vs SONY PHILIPPINES


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LOA is invalid if it indicates more than 1 taxable period without specifying all the taxable

periods covered. If the LOA indicates that it covers 2011, 2012, and 2013, it is valid

because it specifically indicates the taxable period. Also, the revenue officer cannot go

beyond what is provided for in the LOA.

THIRD PARTY VERIFICATION RULE: cross reference maybe had to other partiestransacting with taxapayer or their books or the government or other entities. Here,

evidence is obtained not from the taxpayer but from persons transacting with the taxpayer

or persons having information about the income of a taxpayer or knowlegde of financial

data of taxpayer.

Inquiry into Bank Deposits: Geneeral rule: BIR cannot look into the bank deposits or

accounts of a taxpayer.

Sec 6(F) Authority of the Commissioner to inquire into Bank Deposit Accounts. -

Notwithstanding any contrary provision of Republic Act No. 1405 and other general or

special laws, the Commissioner is hereby authorized to inquire into the bank deposits of:

1 A decedent to determine his gross estate

• In fact, before submitting an estate tax return, a bank certificate to such effect

should be attached to the estate tax return

2 any taxpayer who has filed an application for compromise of his tax liability by

reason of financial incapacity to pay his tax liability.

• In case a taxpayer files an application to compromise the payment of his tax

liabilities on his claim that his financial position demonstrates a clear inability to

pay the tax assessed, his application shall not be considered unless and until he

waives in writing his privilege under Republic Act No. 1405 or under other general

or special laws, and such waiver shall constitute the authority of the Commissionerto inquire into the bank deposits of the taxpayer.

3 A foreign tax authority can obtain information of bank records or deposits if there is

an international treaty to such effect (RA 10021)

NOTE: see RA 10021

Summon persons, take testimony: This is to corroborate the assessment made by the

bureau or will be made by the BIR.

FITNESS BY DESIGN vs CIR

The law alows the BIR to access all the documents and records of a taxpayer without his

consent otherwise, it would defeat the purpose of the law to assess and collect proper taxes.

Moreover, assessment is not a criminal case thus the right to cross examination does not

attach. Also, the affidavit of the informant was considered as evidence in the assessment

because he has personal knowledge of the events. In assessment hearsay evidence can be

used as long as additional evidence are presented.

C POWER TO ASSESS AND PRESCRIBE REQUIREMENTS FOR TAX ADMINISTRATION


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C.1. Power to Examination of Returns (Sec 6(A)): Made after the filing of return. But,

the non filing of return will not preclude the CIR to make an examination.

o The recourse of a taxpayer who has indicated an erroneous entry in his

return is to amend the same within 3 years from date of filing of the suchreturn and not to withdraw the same because it is prohibited under the tax

code.

o However, if the taxable period is already subject of a notice of investigation

or audit, the taxpayer can no longer amend the tax return.

C.1.1 Amendment of Returns

Requisites/ conditions:

1.The return must be filed within 3 years from the date of filing the tax

return sought to be amended;

2.There is no tax audit or investigation of such return has been actually

served to the taxpayer;

3.The amendments can encompass all items that are indicated in the return

BUT shall not include those that are considered irrevocable.

• Example: In the return sought to be amended, the taxpayer

indicated that it will be availing of standard deduction for its

expenses, in the amendment the taxpayer cannot change the same

to avail of the itemized deduction. This is because the option that

has been made is irrevocable.

NATURE OF TAX RETURNS (SECTION 71)

Once filed:

1.It becomes public record

2.But is still confidential

It can only be inspected upon:

1.The order of the president under the rules and regulations promulgated by the

secretary of finance; AND

2.Upon recommendation of the Commissioner.

SEC. 270 of NIRC – UNLAWFUL DIVULGENCE OF TRADE SECRETS

Except as provided in Section 71


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1.Any officer or employee of the Bureau of Internal Revenue;

2.Who divulges to any person or makes known in any other manner than may be provided

by law information;

3.Information regarding the business, income or estate of any taxpayer, the secrets,

operation, style or work, or apparatus of any manufacturer or producer, or confidential

information regarding the business of any taxpayer;4.Knowledge of which was acquired by him in the discharge of his official duties.

Thus, a janitor, who obtains the abovementioned information, will not be liable

under this code because the information were not obtained in the discharge of

his duties/functions.

PENALTY: Upon conviction for each act or omission, be punished by a fine of not less than

Fifty thousand pesos (P50,000) but not more than One hundred thousand pesos (P100,000), or

suffer imprisonment of not less than two (2) years but not more than five (5) years, or both.

BIR vs. Ombudsman

What documents are produced before the ombudsman?

Original case dockets regarding the grant of tax refunds

o These are public record

o BUT the president’s order is not required in order to inspect the same because

these are not tax returns; thus, Sec. 71 and Sec. 270 do not apply.

On the argument of the taxpayer that the document contains trade secret is untenable because

the same does not contain trade secrets. However, assuming that the document or the original

case docket contains trade secrets, still Sec. 71 and 270 do not apply because this document is

not in the nature of tax return; thus, the ombudsman is not precluded from inspecting and

requiring the production of the same.

Principles to remember:

1.Sec. 71 and 270 do not apply in cases of original case dockets; and

2.Original case docket does not contain trade secrets, and even if it does, the ombudsman

is not prohibited to inspect and require the production of such document.

SALIENT FEATURES OF REPUBLIC ACT NO. 10021

"Exchange of Information on Tax Matters Act of 2009".

GENERAL RULE:Bank deposits can only be inquired by the depositor and its duely authorized

representative.

EXCEPT:as provided in Sec 6 of NIRC as amended by RA 10021


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The Commissioner is hereby authorized to inquire into the bank deposits and other related

information held by financial institutions of:

(1) A decedent to determine his gross estate.

(2) Any taxpayer who has filed an application for compromise of his tax liability for the

reason of financial incapacity to pay his tax liability provided that he waives in writing

his privilege under the Foreign Currency Deposit Act of the Philippines or under other

general or special laws

(3) Upon the request of a foreign tax authority.

o Conditions:

1.There is an international convention or agreement on tax matters to which

the Philippines is a signatory or a party of.

2.The information obtained from the banks and other financial institutions may

be used by the Bureau of Internal Revenue for tax assessment, verification,

audit and enforcement purposes.

3.Notice must be given to the taxpayer.

4.If the foreign tax authority provides for the following information:

4.1.The identity of the person under examination or investigation;

4.2.A statement of the information being sought including its nature and

the form in which the said foreign tax authority prefers to receive the

information from the Commissioner;

4.3.The tax purpose for which the information is being sought;

4.4.Grounds for believing that the information requested is held in the

Philippines or is in the possession or control of a person within the

jurisdiction of the Philippines;

4.5.To the extent known, the name and address of any person believed to be

in possession of the requested information;

4.6.A Statement that the request is in conformity with the law and

administrative practices of the said foreign tax authority, such that if

the requested information was within the jurisdiction of the said foreign


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tax authority then it would be able to obtain the information under its

law or in the normal course of administrative practice and that it is

conformity with a convention or international agreement; and

4.7.A statement that the requesting foreign tax authority has exhausted all

means available in its own territory to obtain the information, except

those that would give rise to disproportionate difficulties.

The Commissioner shall confirm receipt of a request in writing to the requesting tax authority

and shall notify the latter of deficiencies in the request, if any, within sixty (60) days from the

receipt of the request.

If the Commissioner is unable to obtain and provide the information within ninety (90) days

from the receipt of the request, due to obstacles encountered in furnishing the information or

when the bank or financial institution refuses to furnish the information, he shall immediately

inform the requesting tax authority of the same, explaining the nature of the obstaclesencountered or the reasons of refusal."

Willful Refusal to Supply Information. - Any officer, owner, agent, manager, director or

officer-in -charge of any bank or financial institution who, being required in writing by the

Commissioner, willfully, refuses to supply the required information shall be punished by a fine

of not less than Fifty thousand pesos (50,000) but not more than One hundred thousand pesos

(P100,000) , or suffer imprisonment of not less than two (2) years but not more than five (5)

years, or both.

Obligation to Maintain Confidentiality of Information Received. - Any information received

by a foreign tax authority from the Bureau of Internal Revenue pursuant to an International

convention or agreement on tax matters shall be treated by the authority as absolutely

confidential in nature in the same manner as information obtained by the latter under its laws

and shall be disclosed only to persons or authorities, including courts and administrative

bodies, involves in the assessment or collection of, the enforcement or prosecution in respect

of, or the determination of appeals in relation to, the taxes covered by such conventions of

agreements.

C.2. Power to Make Return (Sec 6(B))

Sec. 6. (B) Failure to Submit Required Returns, Statements, Reports and other Documents - When a report

required by law as a basis for the assessment of any national internal revenue tax shall not be forthcoming

within the time fixed by laws or rules and regulations or when there is reason to believe that any such report


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is false, incomplete or erroneous, the Commissioner shall assess the proper tax on the best evidence

obtainable.

In case a person fails to file a required return or other document at the time prescribed by law, or willfully or

otherwise files a false or fraudulent return or other document, the Commissioner shall make or amend the

return from his own knowledge and from such information as he can obtain through testimony or otherwise,

which shall be prima facie correct and sufficient for all legal purposes.

When:

1.No tax return has been filed by the taxpayer.

2. There is reason to believe that any such report is false, incomplete or erroneous

Any return prepared by the Commissioner is prima facie correct and the amount

assessed is based on Best Evidence Obtainable Rule and NOT merely on

speculations.

Thus, if the BIR prepared a return for a jeepney operator, who failed to file his return

for the taxable year, on the presumption that it earns P2,000 daily times 5 days a week

times 4 weeks in a month times 12 months in a year with a total of P480,000, this is

not proper because this is base merely on speculation or presumption. BUT, if the BIR

prepared a return based on the documents submitted by the jeepney operator, then

this will fall under best evidence obtainable rule; thus, the assessment is valid and

presumed to be correct.

CIR vs. Hantex

Best Evidence Obtainable Rule:Manner or method on how the BIR will obtain

best evidence to support its tax assessment liability through its functions under

NIRC.

BEOR may be obtained by:

1.The examination of any book, paper, record or other data which may be

relevant or material to such inquiry;

2. Third Party Verification Rule

3. Issuing summons to the person liable for tax or required to file a return, or

any officer or employee of such person, or any person having possession,

custody, or care of the books of accounts and other accounting records

containing entries relating to the business of the person liable for tax, or any


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other person, to appear before the Commissioner or his duly authorized

representative at a time and place specified in the summons and to produce

such books, papers, records, or other data, and to give testimony;

4. Testimony of the person concerned, under oath, as may be relevant or

material to such inquiry;

Admissibility of Hearsay Evidence:

o Best evidence obtainable may consist of hearsay evidence, such as the

testimony of third parties or accounts or other records of other taxpayers

similarly circumstanced as the taxpayer subject of the investigation,

hence, inadmissible in a regular proceeding in the regular courts.

CIR vs. Embroidery and Garment Industries

Hearsay evidence may be used for assessing tax liabilities of a taxpayer provided

that it is supported by other documents; otherwise, the assessment is invalid.

Question: Pathiel, a certified public accountant, was employed by Eave Corporation on

January 2012. Ammielle, the corporation’s CPA prior to the employment of Pathiel,

told the latter that the corporation has been under declaring its gross income in order

to lessen its tax liabilities. She later on discovered that it is true. On January 2015,

Pathiel divulged this information to the BIR. May the above information be used by the

BIR in assessing the tax liabilities of Eave Corporation?

Answer:

1 With regards to the information obtained during her employment (2012 –

2014) – it can be used because the same is not hearsay. Hearsay evidence

are those obtained by the informant thru other persons, thus, there is no

first-hand or personal knowledge about the information. In this case, since

Pathiel has personal knowledge regarding the under declaration of the

corporation, the information she obtained and divulged to the BIR is not

considered as hearsay.

2 With regards to the information obtained prior to her employment (taxable year before 2012) – it MAY be used, provided that it is supported by other

evidence or documents. Otherwise, the information cannot be used by the

BIR in assessing the tax liabilities of the taxpayer. Hearsay evidence cannot

by itself be sufficient to support an assessment by the BIR. This is because

assessment cannot be based merely on speculations and presumptions;

rather, it must be based on actual facts.


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Naked Assessments – assessments not based on actual facts and not supported by

competent evidence or documents (i.e. invoices, other financial documents); thus, shall

be considered as a doubtful assessment and must be invalidated.

Informer/ Informant – persons who divulge information to the BIR

Benefit: if the BIR successfully collected the tax due against an individual, the

informer will be rewarded 10% of what was actually collected.

Informer’s reward is subject to tax because there is a gain (flow of wealth), it

was realized, and it is not excluded by the law. Thus, it is taxable.

C.3. Power to Conduct Inventory Taking, Surveillance, and to Issue Presumptive

Gross Sales/ Receipts (Sec 6(C))

Issue Presumptive Gross Sales/ receipts:the CIR would presume a certain

amount of gross sales or receipts in behalf of the taxpayer if:

1.The taxpayer failed to issue receipts or invoices;

2.The books of account do not reflect the correct amount of gross sales or

receipt of the taxpayer.

C.4. Termination of Tax Period (Sec 6(D))

GROUNDS TO TERMINATE A TAX PERIOD

1.If the taxpayer hides or conceals his properties;

2.If the taxpayer intends to leave the Philippines;

3.If the taxpayer removes his properties in the Philippines;

4.If the taxpayer retires from business and the business is subject to tax;

5.If the taxpayer obstructs the proceedings for collection.

What is a taxable/accounting period?

For an individual: Calendar Year – January to December

For a Corporate taxpayer:

a Calendar Year – January to December

b Fiscal Year – starting at any month other that January and ending at any

month other than December

Effect of termination of Taxable period:


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The BIR can immediately compute for the tax liability of such payer even if the

taxable year has not actually ended.

Example: Pepa is engage in retail business. On June 2015, she plans to terminate her

business and fly to Canada to migrate there. Upon learning of the same, BIR

computed for her tax liabilities for the taxable year of 2015. Is the assessment proper,

considering that taxable year 2015 has not actually been terminated?

Yes. This is because the BIR can terminate a taxable period if any of the

abovementioned grounds is present in the case. The termination of taxable year

will enable the BIR to compute for the tax liability of the payer even if the

taxable year has not actually ended.

What is the importance of computing the tax liability of an individual after the

taxable period? It is important in order for the taxpayer to deduct correctly his

expenses and compute properly his tax liability.

C.5. Fixing of Real Property Values (Sec 6(E))

Market value shall be defined as:

1 The value prescribed by the BIR or the zonal value;

2 The value prescribed by the city/provincial assessors or assessed value.

The fixing of the value of the properties shall be made in consultation with competent

appraisers, both from the public and private sector.

CIR vs. Aquafresh Seafoods, Inc.

Predominant Use of Property:all real properties regardless of actual use,

located in a street/barangay zone, for purposes of zonal valuation, the dominant

use of these properties shall be considered.

For Example:in a particular barangay zone, most of the properties are used

commercially. All other properties located therein shall be considered as

‘commercial’ for the purposes of zonal valuation, even if the other properties are

being used as residential and vice versa.

C.6. Accredit Tax Agents (Sec 6(G))

Before an individual or a tax practitioner could transact with the BIR such

should first be accredited by the bureau. BUT lawyers need not be accredited by

the BIR; all he needs to do is to indicate his roll of attorney number.


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C.7. Power to Prescribe Procedural/Documentary Requirements

Requirements:

1.E-filing or Electronic Filing

2.Substituted Filing – if there exist an employer-employee relationship, the

employer will file the income tax return of his employee Requisites:

a.The income earner must be purely compensation income

earner;

b.The taxpayer must have one employer only;

c.The annual income tax due must be equal to the annual

income tax paid;

d.The employer must furnish BIR Form 2316 to the employee;

e.The employer should file the 1604 CM.

If all the above enumerations are present, the employee need not

file its income tax return.

3.Net Worth Method

Beginning net worth – ending net worth = Result will be compared

to the taxable income that was reported by the taxpayer. The

difference shall be considered as the under declared gross

sale/receipts.

This is used in case of fraud or when there is no record to support

the computation of tax.

Net worth: difference of assets and liabilities

Example: Napoles. Before she was involved with scams, she had no

net worth because of her numerous debts. Say on January she has

no net worth but upon reaching December she had P100M. The

difference of her ending net worth and her starting net worth is her

under declared gross receipts or sales. Thus, she is now subjected

to pay deficiency tax.

C.8. Power to Delegate

G.R. The Commissioner has the power to delegate ALL his powers

EXCEPT:

1.Recommend the promulgation of rules and regulations

Only the Secretary of Finance who promulgates Rules and

Regulations

2.Issuance of Rulings of first impression


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3.Power to compromise and abate

4.Assign and re-assign internal revenue officers designated at

establishments where articles subject to excise tax are produced or kept.

This is for the purpose of avoiding corruption

Internal revenue officers/employees can be designated in a certain

company for a period NOT exceeding two (2) years.