Malilong: The Marcos estate tax story

Twenty-five years ago, the Supreme Court noted, not without a hint of irony that “(m)ore than seven years since the demise of the late Ferdinand E. Marcos, the former President of the Republic of the Philippines, the matter of the settlement of his estate, and its dues to the government in estate taxes, are still unresolved.”

If the Court had any sense of foreboding that the taxes would still not be collected despite the clear and unmistakable language of their decision in Ferdinand Marcos Jr. versus Court of Appeals, the Commissioner of the Bureau of Internal Revenue and Herminia de Guzman, we are not sure. But a quarter of a century later, the estate has remained unsettled and, more disturbingly, the estate taxes unpaid.

Ferdinand Marcos Jr., better known as Bongbong Marcos, who is running for the office that his father vacated, said only very recently, perhaps by way of explaining his family’s refusal to pay the taxes, that there is “a lot of fake news” regarding his father’s delinquent estate taxes and that the matter should instead be left to the discretion of the court.

I do not know what else is left to the court to do after the decision of its 2nd Division in G.R. No. 120880 became final and executory on March 9, 1999. The decision dismissed Marcos’ petition to overturn the ruling of the Court of Appeals affirming the computation by the Commissioner of Internal Revenue of the deficiency assessment for estate taxes, among others, on the estate of the elder Ferdinand.

A reading of the decision would show that on June 27, 1990, less than a year after the former president died in Hawaii on Sept. 29, 1989, the BIR created a special audit team to investigate the tax liabilities of Marcos, his family, associates and cronies.

On July 26, 1991, the BIR issued a deficiency tax assessment against the Marcos estate in the amount of P23,293,607,638.00. Copies of the assessment were personally served on Bongbong and his mother, Imelda. Since the Marcoses did not administratively protest the assessment within 30 days from receipt, it became final and the BIR subsequently sent them notices of levy and sale to satisfy the delinquency.

Bongbong went to the Court of Appeals on June 28, 1993 to question the assessment and notices of levy and sale. On Nov. 29, 1994, the CA dismissed the petition, agreeing with the BIR that the deficiency assessments had already become final and unappealable in view of the petitioner’s failure to contest their correctness with the Court of Tax Appeals within the reglementary period.

Aggrieved by the dismissal, Bongbong went to the Supreme Court.

On June 5, 1997, the Supreme Court denied the petition and affirmed “in all respects,” the decision of the Court of Appeals. “He who comes to court must come with clean hands,” the Court ruled. “Otherwise, he not only taints his name, but ridicules the very structure of established authority.”

We will discuss the issues raised by Bongbong and the SC’s explanation why they found them unconvincing in our next column.