Bureau of Internal Revenue
The Bureau of Internal Revenue (BIR) issued Revenue Memorandum Circular (RMC) No. 15-2020, 12 February 2020, to prescribe the manner on how concerned taxpayers shall be informed of the procedures in responding to the issuance of deficiency tax assessments. A printed guideline of the procedures shall be furnished to the taxpayer during the Discussion of Discrepancy. To acknowledge receipt, the taxpayer or his authorized representative shall be required to print his name and affix his signature on the space provided.
The guideline, provided as “Annex A” to the RMC, lays down the procedures on the different stages in responding to the deficiency tax assessments:
Stage of Assessment |
Guidelines |
During the Discussion of Discrepancy |
- The taxpayer will receive a “Notice of Discrepancy” containing any findings of discrepancy/disallowances discovered by the BIR during audit/investigation.
- The taxpayer can agree with the audit findings by signing the Agreement Form and payment of the corresponding deficiency tax type/s, including the applicable penalties and interest.
- Otherwise, the docket will be transmitted to the reviewing office (National Office or Revenue Region, as the case may be) for the issuance of deficiency tax assessment.
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Upon Receipt of Deficiency Tax Assessment (Preliminary Assessment Notice (PAN) / Formal Letter of Demand and Final Assessment Notice (FLD/FAN) |
- The reviewing office shall issue a PAN containing the computation of deficiency tax, the facts, the law, rule and regulations or jurisprudence on which the proposed deficiency assessment is based.
- In case of failure to respond to the PAN or pay within 15 days from the date of receipt, the FLD/FAN calling for payment of the taxpayer’s deficiency tax liabilities shall be issued.
- The taxpayer has 30 days from receipt of the FLD/FAN to file an administrative protest.
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Filing of Administrative Protest |
- A written protest to the FLD/FAN should be addressed to the Assistant Commissioner/Regional Director or Authorized Higher Revenue Official and filed with the reviewing office that issued the FLD/FAN.
- The protest may be a request for reconsideration (based on existing records) or reinvestigation (based on newly discovered or additional evidence), and must state the following information to be considered a valid protest:
- Date of the assessment notice;
- Nature of the protest, whether reconsideration or reinvestigation. If for reinvestigation, the taxpayer must specify the newly discovered or additional evidence and submit said evidence within 60 days from the date of filing the protest requesting for reinvestigation; and
- Applicable law, rules and regulations or jurisprudence on which the protest is based.
- If no protest to the FLD/FAN is filed within the 30-day period, the deficiency tax assessment shall become final, executory and demandable, and no request for reconsideration/reinvestigation shall be granted.
- A Final Decision on Disputed Assessment (FDDA) will be issued and the taxpayer has 30 days from receipt of the FDDA to file:
- a request for reconsideration of the FDDA with the Commissioner of Internal Revenue (CIR) in case of adverse decisions of the Assistant Commissioner/Regional Director or Authorized Higher Revenue Official; or
- a judicial protest with the Court of Tax Appeals (CTA).
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Filing of Appeal with the Court of Tax Appeals (CTA) |
- The taxpayer may file an appeal with the CTA under the following circumstances:
- In case of inactions of the CIR or the CIR’s authorized representative (Assistant Commissioner/Regional Director) on the administrative protest, an appeal should be filed within 30 days from the expiration of the 180-day period. The 180-day period is reckoned from the date of filing of the request for reconsideration, or from the date of submission of the documents within the 60-day period (for requests for reinvestigation).
- In case of adverse decisions of the Assistant Commissioner/Regional Director or Authorized Higher Revenue Official with regard the filed administrative protest, an appeal should be filed within 30 days from receipt of the FDDA.
- In case of adverse decisions of the CIR with regard requests for reconsideration of the FDDA, an appeal should be filed within 30 days from the receipt of the CIR’s decision.
- Failure to appeal to the CTA shall render the BIR’s decision as final, executory and demandable.
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Attached is the full text of the issuance.
RMC No. 15-2020
RMC No. 15-2020 Annex A
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