REMEDIES OF THE BUREAU IN THE AUDIT PROCESS AND COLLECTION OF

DELINQUENT ACCOUNTS

1. 26. What means are available to the Bureau to compel a Taxpayer to produce his
books of accounts and other records?
A Taxpayer shall be requested, in writing, not more than two (2) times, to produce his
books of accounts and other pertinent accounting records, for inspection. If, after the
Taxpayers receipt of the second written request, he still fails to comply with the
requirements of the notice, the Bureau shall then issue him a Subpoena Duces
Tecum.
2. 27. What course of action shall the Bureau take if the Taxpayer fails to comply with
the Subpoena Duces Tecum?
If, after the Taxpayer fails, refuses, or neglects to comply with the requirements of the
Subpoena Duces Tecum, the Bureau may:
File a criminal case against the Taxpayer for violation of Section 5 as it relates to
Sections 14 and 266, of the NIRC, as amended; and/or
Initiate proceedings to cite the Taxpayer for contempt, under Section 3(f), Rule 71 of
the Revised Rules of Court.
3. What alternatives are open to Government for the collection of delinquent accounts?
Once an assessment becomes final and demandable, the Government may employ
any, or all, of the following remedies for the collection of delinquent accounts:
Distraint of personal property;
Levy of real property belonging to the Taxpayer;
Civil Action; and
Criminal Action.
4. What is "Distraint of Personal Property"?
Distraint of personal property involves the seizure by the Government of personal
property - tangible or intangible - to enforce the payment of taxes, followed by the
public sale of such property, if the Taxpayer fails to pay the taxes voluntarily.
5. What is "Levy of Real Property"?
Levy of real property refers to the same act of seizure, but in this case of real
property, and interest in or rights to such property in order to enforce the payment of

taxes. As in the distraint of personal property, the real property under levy shall be
sold in a public sale, if the taxes involved are not voluntarily paid following such levy.
6. In what time period must collection be made?
Any internal revenue tax, which has been assessed within the period prescribed
shall be collected within three (3) years from date of assessment. However, tax fraud
cases may be collected by distraint or levy or by a court proceeding within five (5)
years from assessment of the tax or from the last waiver.