BIR releases rules on appealing disputed tax assessments

MANILA, Philippines — The Bureau of Internal Revenue (BIR) has formalized guidelines on dealing with tax assessments disputed by taxpayers.

 

Under Revenue Memorandum Order 26-2016 dated June 13, the agency underscored the right of the taxpayer to question tax deficiency assessments sent by the bureau as part of its investigation.

 

Assessments are issued to taxpayers being audited. Though not specifically targeting anyone, BIR issues annual audit guidelines where "priority" taxpayers are named.

 

For 2016, this includes the top taxpaying individuals and corporations, self-employed and professionals as well as those who failed to pay income taxes on time.

 

"This is to put everything in one issuance and to make sure it is handled uniformly," outgoing BIR Commissioner Kim Henares said when asked for a reason behind the order.

 

Henares steps down by noon of June 30 when President Aquino's term lapses. 

 

Under the memorandum, the agency recognizes the taxpayer's right to object to an assessment, but should follow specific schedules and procedures on when and how to file it.

 

For a pre-assessment notice, the taxpayer may file an objection although this is "not mandatory."

 

After 15 days, a final assessment and formal letter of demand will be issued, to which the taxpayer is given 30 days to request for reconsideration or re-investigation before the BIR.

 

A re-investigation means the BIR is being asked by the taxpayer to assess it again. The order stated to commence with such, the taxpayer should submit "relevant supporting documents" within 60 days from its request.

 

"Evaluation of protest shall be based exclusively on the documents submitted within this period, and no further document shall be accepted after the expiration," the order said.

 

"The assessment shall become final and executory in the event the taxpayer fails to submit the relevant supporting documents within the 60-day period," it added.

 

A final decision on a disputed assessment shall be issued to rule on the protest, whether denied or approved partially or as a whole. This may also be appealed to the BIR commissioner.

 

If BIR fails to act on the request for reconsideration or re-investigation, the taxpayer may file an appeal before the Court of Tax Appeals within 30 days.

 

Under the order, the tax agency is given 180 days to act on reconsideration request and 60 days for a re-investigation. 

 

"Appeal to the commissioner or to the Court of Tax Appeals...shall not preclude the taxpayer from voluntarily settling the assessment partially or fully," it explained.