Tax notes: Revised procedures on tax assessment

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Monday, December 16, 2013


THE Bureau of Internal Revenue (BIR) recently revised the rules and procedures relative to the due process requirements in the issuance of tax assessment with the issuance of Revenue Regulations (RR) No. 18-2013. A notable amendment introduced by BIR is the removal of the Notice of Informal Conference.

Under the Tax Code, the Notice of Informal Conference is not a requirement; nevertheless, it was institutionalized under RR No. 12-99 as part of the procedural due process. Among the salient features of the revised rules in RR No. 18-2013 are as follows: 1) Removal of the requirement to issue Notice of Informal Conference prior to the issuance of preliminary assessment notice (PAN). PAN will directly be issued to the taxpayer if the Commissioner of Internal Revenue or his duly authorized representative finds sufficient basis to assess the taxpayer for any deficiency tax or taxes after review and evaluation of taxpayers’ records.

2) Formal Letter of Demand (FLD) and Final Assessment Notice (FAN) will be issued if the taxpayer fails to respond within 15 days from receipt of the PAN. In case the taxpayer responds to the PAN within the 15-day period, the FLD/FAN shall be issued within 15 days from the filing/submission of the taxpayer’s response.

3) Requirement to state the nature of protest of the taxpayer to the FLD/FAN, whether the taxpayer is seeking reconsideration or reinvestigation.

4) It introduced the remedy of administrative appeal with the Commissioner of Internal Revenue on Final Decision on Disputed Assessment (FDDA) issued by the authorized representatives of the Commissioner through the filing of request for reconsideration.

5) It prescribed the modes of service for PAN/FLD/FAN/FDDA, which may be served by the Commissioner or his duly authorized representative through personal service, substituted service or by mail.

6) Imposition of deficiency and delinquency interest – the 20 percent deficiency interest will be assessed from the date prescribed for the payment of the tax until the full payment thereof while the 20 percent delinquency interest shall be collected from the due date appearing in the notice and demand of the Commissioner of Internal Revenue until the amount is fully paid.

(Source: Punongbayan & Araullo)

Published in the Sun.Star Cebu newspaper on December 17, 2013.

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