Tuesday, July 22, 2008 Tax notes: Proof of approval of request for re-investigation
THE Bureau of Internal Revenue (BIR) is allowed a period of three years from the date of issuance of the final assessment notice (FAN) to collect the deficiency tax.
One instance when the running of this prescription period can be suspended is if the taxpayer requests for a reinvestigation, which is then granted by the BIR Commissioner. The grant may be expressed in communications with the taxpayer or implied from the actions of the commissioner or his authorized representatives in response to the request for reinvestigation.
The burden of proof that the taxpayer’s request for reinvestigation had been actually granted shall be on the commissioner. If there is no evidence that the request was granted and no actual reinvestigation was conducted, the running of the statute of limitations cannot be deemed suspended. (Bank of the Philippine Islands v. Commissioner of Internal Revenue, CTA Case 7397, April 9, 2008)
Hence, if the BIR failed to initiate collection proceedings after the lapse of the three-year period, its authority to collect will already be barred by prescription. (Source: Punongbayan & Araullo)
