IS A VOID FDDA TANTAMOUNT TO TAX ASSESSMENT?
– DELOITTE. ON THE DOT
NE of the woes of a taxpayer is being assessed by the Bureau of Internal Revenue (BIR). While most taxpayers devote the time and careful consideration to ensuring compliance with the many requirements of the BIR, some are unfortunately subjected to an assessment, leaving the taxpayer with the immense task of defending its position during tax investigations.
A great amount of detailed work goes into proving a taxpayer’s compliance, often involving long hours of preparing protest letters and documentary requirements, and also in most cases, necessitating the assistance of external tax and legal advis- task, and the time and cost involved, not to mention the integrity and reputation that are at stake, taxpayers would naturally want to see these cases settled in the most constructive and beneficial way.
When faced with an assessment from the BIR, the taxpayer’s immediate and best course of action is to evaluate the case at hand, review his available options, and diligently go through the standing remedies, all while making sure that due process is observed. Fundamental to the subject is Section 228 of the National Internal Revenue Code of 1997 (NIRC) and Revenue Regulations (RR) No. 12-99, as amended by RR No. 18-2013. These documents lay out the procedure to be followed during tax assessments.
Section 228 of the NIRC declares that an assessment is void writing of the facts and law on which it is made. Both RR Nos. 12-99 and 18-2013 require that WTC assessment should have been invalidated because the facts on which the assessment was based. It claimed that it was deprived of due process because in not stating the factual basis of the assessment, the CIR did not consider the defenses and supporting documents it presented. as regards the EWT and FBT On the other hand, the SC also found that the CTA made an error in concluding that the assessment on EWT and FBT deficiency was void because was void. Noting that what is appealable to the CTA is the “decision” of the CIR on disputed assessment and not the assessment itself, it is clear that the assessment is independent and distinct from a decision on a disputed assessment. Thus, the invalidity of one does not necessarily result in the invalidity of the other, unless otherwise provided by the law or regulations.
- test letter to the assessment in the administrative level, the CIR can either issue a decision on the disputed assessment or fail to act on it, at which point the protest is considered denied. The taxpayer may then appeal the decision or inaction of the CIR. Therefore, only recourse of the taxpayer in addressing its final tax liability. Instead, inaction on the part of the CIR may also result in the finality of a taxpayer’s tax liability, which may also be appealed before the CTA.
To recapitulate the SC’s decision on the case at hand: “A decision differs from an assessment, and failure of and law on which it is based renders the decision void— but not necessarily the assessment. Tax laws may not be extended by implication beyond the clear import of their language, nor their operation enlarged so as to
- cally provided.” TheauthorisaseniormanagerwiththeTax&CorporateServicesdivisionof NavarroAmper&Co.,the - loitteSoutheastAsiaLtd.—a ToucheTohmatsuLimited— operatinginBrunei,Cambo Philippines,Singapore,ThailandandVietnam.