AN ASSESSMENT is valid even if it is based on the so-called “tentative return” of the taxpayer. As held by the Court of Tax Appeals (CTA), the Bureau of Internal Revenue (BIR) is not prohibited from looking into a taxpayer’s tentative tax return in ascertaining the correctness of its final return.

(CTA Case No. 6608, Oct. 20, 2009)Under Section 5 of the Tax Code of 1997, the BIR commissioner or his duly authorized representative is allowed to examine any book, paper, record or other data that may be relevant or material in determining the correct liability of a taxpayer.

The law states “any return” and, therefore, includes not only the “final return” but also a “tentative return.”

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Section 6 of the Tax Code of 1997 states that a return may be modified, changed or amended within three years from the date of filing of a taxpayer’s return as long as no notice for audit or investigation of such return, statement or declaration has been actually served upon the taxpayer.

However, the said section also provides that any return, statement or declaration filed in any office authorized to receive the same shall not be withdrawn.

According to the CTA, this means that once a return has been filed, the BIR commissioner or his duly authorized representative is not precluded from examining the correctness of any return filed at the BIR office. (Source: Punongbayan & Araullo)