TAXPAYER S

REMEDIES

Protest or dispute the

assessment

Refund or recovery of

erroneously or illegally

collected taxes

Step 1: Issuance of a

Preliminary Assessment

Notice (PAN)

Taxpayer has 15 days to

respond

If there is sufficient basis for an

assessment, the BIR will issue a pre-

assessment notice (PAN) stating the

facts, laws, rules, regulations and

jurisprudence on which the proposed

assessment is based.

1. Taxpayer

has 15 days from receipt of

PAN to

respond

IF HE DOES NOT

RESPOND:

Considered default and a

Formal Letter of Demand

and Final Assessment

Notice (FLD/FAN) shall be

issued.

IF HE RESPONDS:

FLD/ FAN will be

issued within 15

days from the filing/

submission of

taxpayer s response.

Note that: if there s no PAN, the FAN

which follows therefrom is considered

VOID, since the sending of AN is part of

the due process requirement.

When is PAN not needed? And a FAN can be issued outright?

Any deficiency tax is the result of mathematical error in the

computation of the tax evident on the face of return

Discrepancy between the tax withheld and the amount actually

remitted

Taxpayer opted to claim a refund or tax credit for excess

creditable withholding tax carried it over and automatically

applied the amount claimed against the estimated tax liabilities

for the taxable quarter of the succeeding taxable year

Excise tax due on excisable articles has not been paid

When an article locally purchase or imported by an exempt

person has been sold, traded or transferred to non-exempt

person.

Step 2: Issuance of a

Formal Letter of

Demand and Final

Assessment Notice

Step 3: Protest the Formal

Letter of Demand/ Final

Assessment Notice

Taxpayer has 30 days from

receipt of FAN/ FLD to

respond

Remember that the FLD/ FAN must

state the following:

Facts

Law

Rues and Regulations

Jurisprudence

On which the assessment is based

in order to be valid. If not, it is

considered void.

The taxpayer must file a

letter of protest within 30

days from the date of

receipt of the FLD/ FAN

If the taxpayer fails to do so,

then the assessment

becomes final, executory

and demandable.

If taxpayer fails to do

so, then the

assessment

becomes final,

executory and

demandable.

Protest comes

in the form of

either a

written

request for:

Reconsideration

Reinvestigation

The protest must:

State the nature of protest (if reconsideration

or reinvestigation)

Date of the FAN

Applicable rules, law etc. (If the protest lack

any of these, then it shall be considered void

and without force and effect.

It refers to plea of re-

evaluation of an assessment

on the basis of existing

records without the need of

additional evidence. It may

involve a question of fact or

law or both.

Refers to a plea of re-

evaluation of an assessment

on the basis of newly-

discovered or additional

evidence that a taxpayer

intends to present in the

reinvestigation. It may also

involve a question of fact or

law or both.

For request for

reinvestigation, the

taxpayer shall submit all

relevant supporting

documents 60 days

from the date of filing of

his letter of protest.

Relevant supporting

documents should be

understood as those

documents necessary to

support the legal basis in

disputing a tax assessment

as determined by the

taxpayer.

Step 4: Denial of

the ProtestIf protest is

denied?

Appeal to the CTA

division within 30

days from the date

of receipt of decision

via a Petition for

Review under Rule

42 (judicial appeal)

Request for

reconsideration with

the CIR within 30

days from the date

of receipt of the

decision

(administrative

appeal)

If protest is STILL

denied?

Appeal to the CTA within 30

days from date of receipt of

the said decision

Note that: a Motion for Reconsideration

of the CIR s denial will NOT toll the 30-

day period to appeal to the CTA.

If protest or administrative

appeal is NOT ACTED UPON

by the CIR within 180 days

counted from the date of the

filing of the protest, the

taxpayer may either:

Appeal to the CTA

within 30 days from

the expiration of the

180 day period

Wait for the final

decision of the CIR

and then appeal the

said decision to the

CTA within 30 days

after receipt of said

decision.

Inaction

If the CIR s representative does not act

within 180 days counted from:

1. The date of filing of protest in case of a

request for reconsideration

2. The date of submission of the required

relevant supporting documents (within 60

days from the date of filing of the protest

for a request for reinvestigation)

The taxpayer

may either:

Appeal to the CTA

within 30 days from the

expiration of the 180

day period

Wait for the final

decision of the CIR

representative

Issuance of a Final

Decision on a

Disputed Assessment

(FDDA)

Assuming the CIR or his

representative acts on the protest,

the FDDA must state:

The facts, applicable law, rules

and regulations or jurisprudence

on which the decision is based (if

not, then it is a void decision)

That the decision is the final

decision

QUICK RUNDOWN ON

TAXPAYER S REMEDIES

PROCEDURE

Filing of tax return

BIR files

deficiency and

issues a PAN

15 days to

respond

Final Letter of

Demand/ Final

Assessment

Notice (FLD/FAN)

30 days to

protest

Taxpayer files a

protest letter

If it is a Request for

Reinvestigation, submit

supporting documents 60

days from the time of

protest letter

Denial of BIR

30 days

Inaction of

BIR

180 days,

appeal to

CTA

Appeal to CTA or CIR

and then the CTA

within 30 days from

the decision

Appeal to CTA within

30 days from the

lapse of 180 days or

wait for the decision

of the BIR

2010 BAR QUESTION

Continental Inc. received a PAN from the CIR. It failed to

protest the PAN. The CIR thereupon issued a FAN with a

letter of demand. The FAN was received by the corporation

and filed a protest against it.

CIR denied the protest on the ground that the assessment

had already become final and executory, the corporation

having failed to protest te PAN.

Is CIR correct?

Answer: NO. Failure to protest the PAN will have no effect

on the taxpayer. He will only be considered in default. It is

the FAN which must be protested. In this case, as the

FAN was protested, then the assessment has not yet

become final and executory.