Taxation - Tax Remedies 02/28/2019

EASY
Question #1
The official action of an officer authorized by law in ascertaining the amount of tax due under the law from a taxpayer is
a. Deficiency b. Assessment c. Distraint d. Delinquency
Question #2
Informers reward is equal to
a. 10% of revenues, surcharges or fees collected by the BIR as a result of the information given or b whichever is
higher
b. 10% of revenues, surcharges or fees collected by the BIR as a result of the information given
c. P1,000,000
d. 10% of revenues, surcharges or fees collected by the BIR as a result of the information given or P1,000,000
whichever is lower
Question #3
What is the technical term for a tax assessment made by an authorized Revenue Officer (RO) without the benefit of
complete or partial audit, in light of the ROs belief that the assessment and collection of a deficiency tax will be
jeopardized by delay caused by the taxpayers failure to comply with audit and investigation requirements to present his
books of accounts and/or pertinent records, or substantiate all or any of the deductions, exemptions or credits claimed
in his return?
a. Assessment made based on Best Evidence Obtainable Rule.
b. Jeopardy assessment
c. Arbitrary assessment based on presumption
d. Assessment issued on or after January 1, 1998 where demand notice allegedly failed to comply with formalities
prescribed in the Tax Code.
Question #4
The Commissioner of Internal Revenue has the authority to credit or refund the following except:
a. the value, upon proof of destruction, of unused stamps that are unfit for use.
b. none of the choices.
c. the value of internal revenue stamps when returned in good condition by the purchaser.
d. taxes erroneously or illegally received or penalties imposed without authority.
Question #5
A filed his income tax return for calendar year 2007 on March 20, 2008. When is the last day for the BIR to collect
assuming A did not pay the tax due upon filing?
a. March 20, 2013 c. April 15, 2011
b. March 20, 2011 d. April 15, 2013
Question #6
This type of administrative tax remedy is used when the government seizes the personal property of a delinquent
taxpayer to enforce payment of taxes
a. Forfeiture c. Distraint
b. Levy d. Tax lien
Question #7
I Offers of compromise of assessment issued by the Regional Office involving basic deficiency taxes
of P500,000 or less and for minor criminal violations discovered by the Regional and District
Offices, shall be subject to the approval of the Regional Evaluation Board.
II If the offer of compromise is less than the prescribed minimum percentage of compromise
settlement, the same shall be subject to the approval of the National Evaluation Board.
a. Both statements are correct.
b. Only the second statement is correct.
c. Only the first statement is correct.
d. Both statements are incorrect.

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Question #8
Which of the following cases is pre-assessment notice required?
a. When the commissioner or his duly authorized representative finds that proper tax should be assessed.
b. In a discrepancy between the tax withheld and the amount actually remitted by the withholding agent
c. Transfer by an exempt person of articles to non-exempt person
d. When the excise tax due has not been paid
Question #9
A taxpayer received a tax deficiency assessment of P1.2 Million from the BIR demanding payment within 10 days,
otherwise, it would collect through summary remedies. The taxpayer requested for reconsideration stating the grounds
therefore. Instead of resolving the request for reconsideration, the BIR sent a Final Notice before Seizure to the
taxpayer. Which of the following remedies can the taxpayer avail?
a. Proceed with Certiorari before the Supreme Court
b. File an injunction before the Regional Trial Court
c. Appeal to the Court of Tax Appeals
d. Appeal to the Court of Appeals
Question #10
Which of the aspects of taxation is (are) administrative in nature?
I Levy
II Assessment
III Collection

a. I only b. I and II c. III only d. II and III

Question #11
A donation was made on March 14, 2009. The donors tax return was filed on March 31, 2009. When is the last day to
make a valid assessment?
a. September 14, 2012 c. March 14, 2012
b. April 13, 2012 d. April 14, 2012
Question #12
A decedent dies on January 1, 2009. The estate tax return is filed on September 1, 2009. When is the last day to make a
valid assessment?
a. September 1, 2012 c. April 15, 2010
b. July 1, 2012 d. July 1, 2009
Question #13
The Commissioner may compromise the payment of any internal revenue tax, when:
I there is a relationship doubt as to the validity of the claim against the taxpayer.
II the financial position of the taxpayer demonstrates a clear inability to pay the assessed tax.

a. Both I and II are correct. c. Only II is correct.

b. Both I and II are incorrect. d. Only I is correct.
Question #14
In which of the following instances shall the compromise not cover the interest on the ground that the imposition
thereof is unjust and excessive?
a. All of the choices
b. Late remittance of withholding tax on compensation of expatriates for services rendered in the Philippines
pending the issuance by SEC of the license to the Philippine branch office or subsidiary.
c. When the taxpayer fails to file a return and pay the tax on time due to substantial losses from prolonged labor
dispute, force majeure, or legitimate business reverses.
d. When the taxpayer fails to file the return and pay the correct tax on time due to circumstances beyond his
control.

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Question #15
The following are instances when penalties and/or interest imposed on the taxpayer may be abated or cancelled on the
ground that the imposition thereof is unjust and excessive, except when the:
a. assessment is brought about or a result of the taxpayers non-compliance with the law due to a difficult
interpretation of the said law.
b. taxpayer is declared insolvent or bankrupt.
c. filing of the return or payment of the tax is made at the wrong venue.
d. taxpayers mistake in payment of his tax is due to erroneous written official advice of a revenue officer.
Question #16
There is prima facie evidence of a false or fraudulent return where the
a. Deductions claimed exceed 30% the actual deductions
b. Tax return was amended after a notice of assessment was issued
c. Tax return was filed beyond the reglementary period
d. Taxpayer changed his address without notifying the BIR
Question #17
I The Commissioner of Internal Revenue has the sole authority to abate or cancel tax, penalties and/or
interest.
II The authority of the Commissioner of Internal Revenue to abate or cancel is generally applicable to
surcharge and compromise penalties only; however, in meritorious instances, the Commissioner may
likewise abate the interest as well as the basic tax assessed.

a. Both statements are incorrect. c. Both statements are correct.

b. Only the first statement is correct. d. Only the second statement is correct.
Question #18
Which of the following cases may not be compromised?
a. Criminal violations involving criminal tax fraud.
b. Cases under administrative protest after issuance of the Final Notice of Assessment to the taxpayer still pending
in the BIR.
c. Civil tax cases being disputed before the courts.
d. Delinquent accounts.
Question #19
May the collection of taxes be barred by prescription?
a. Yes, provided that they are local taxes. c. Yes, provided that they are income taxes.
b. Yes, provided that the tax law provides for d. Yes, provided that they are custom duties.
prescriptive periods.
Question #20
On June 20, 2017, Mitch received a preliminary assessment notice from the BIR demanding that she pays P280,000
deficiency income taxes on her 2015 income. How many days from June30, 2017 should Mitch respond to the notice?
a. 30 b. 60 c. 15 d. 180

AVERAGE
Question #1
Being legislative in nature, the power to tax may not be delegated, except:
a. to local government (to be exercised by the local legislative bodies thereof) or political subdivisions.
b. when delegation relates merely to administrative implementation that may call for some degree of discretionary
powers under a set of sufficient standards expressed by law or implied from the policy and purpose of the Act.
c. all of the choices.
d. when allowed by the Constitution.
Question #2
The taxpayers 2019 percentage tax return is required to be filed through the authorized agent bank under the
jurisdiction of RDO East Taguig. Without prior authorization from the Commissioner, the taxpayer files the return and
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pays the tax through an authorized agent bank under the jurisdiction of RDO Cebu City on April 15, 2020. The tax due
and paid per return is P100,000.
How much is the surcharge?
a. None b. 25,000 c. 50,000 d. 20,000
Question #3
I If the withholding agent is the Government or any of its agencies, political subdivisions or
instrumentalities, or a government-owned or controlled corporation, the employee thereof responsible
for the withholding and remittance of the tax shall be personally liable for the additions to the tax
prescribed herein.

II The term person, as used for the additions to the tax purposes, includes an officer or employee of a
corporation who as such officer, employee or member is under a duty to perform the act in respect of
which violation occur.

a. True, True b. False, False c. False, True d. True, False

Question #4
Some franchise holders who are paying the franchise tax are being required by an amendatory law to pay the value-
added tax, while others remain subjected to franchise tax. Which of the following constitutional provisions makes the
law unconstitutional?
a. No law shall be passed impairing the obligation of contracts.
b. None of the above.
c. No person shall be deprived of proverty without due process of law.
d. The rule on taxation shall be uniform.
Question #5
I The extra-judicial settlement of the taxpayers criminal liability and the amount of the suggested
compromise penalty shall conform to the schedule of compromise penalties provided under Revenue
Memorandum Order No. 19-2007 or as revised.

II A compromise in extra-judicial settlement of the taxpayers criminal liability for his violation is consensual
in character, hence, may not be imposed on the taxpayer without his consent.

a. True, False b. False, True c. False, False d. True, True

Question #6
Which of the following rules governs the prescription for violation of the Tax Code?
1st rule: Prescription starts from the day the law is violated and if the same is not known, prescription
starts from the discovery of the violation.
2nd rule: All violations of any provision of the Tax Code shall prescribe after ten (10) years.

a. Both rules are correct. c. Both rules are wrong.

b. First rule is wrong, second rule is correct. d. First rule is correct, second rule is wrong.
Question #7
Which statement is wrong? A revenue bill:
a. may originate from the Senate and on which same bill the House of Representative may propose amendments.
b. must originate from the House of Representative and on the same bill the Senate may propose amendments.
c. may have a House version and a Senate version approved separately.
d. may be recommended by the President to Congress.

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Question #8
I The state can collect the tax by summary proceedings property and levy on real property,
one after the other, but not simultaneously.

II There must be an assessment of a deficiency tax before there can be a judicial action for
collection.

a. False, true. b. True, true. c. True, false. d. False, false.

Question #9
The income tax return for the calendar year 2019 was due for filing on April 15, 2020. The tax due was P100,000. The
taxpayer voluntarily filed his tax return without notice from the BIR only on June 30, 2020.
How much was the total amount due?
a. 129,155.24 c. 129,166.66
b. None of the choices d. 130,194.07
Question #10
Which of the following interests is incorrect?
a. Interest on extended payment c. Interest on surcharge
b. Interest on delinquency d. Interest on deficiency
Question #11
I A refund check or warrant which shall remain unclaimed or uncased within five years from the date the said
warrant or check was mailed or delivered shall be forfeited in favor of the Government.

II A tax credit certificate which shall remain unutilized after five years from the date of issue shall, unless
revalidated, be considered invalid, and shall not be allowed as payment of any internal revenue tax
liabilities of the taxpayer.

a. False, true. b. True, true. c. False, false. d. True, false.

Question #12
A franchise cannot be amended by:
a. an amendment of a law of general application.
b. an amendment of a special law, which granted the franchise.
c. an amendment of tax laws.
d. none of the choices.
Question #13
This requires that all subjects or objects of taxation, similarly situated are to be treated alike or put on equal footing
both in priveleges and liabilities.
a. Uniformity c. None of the choices
b. Progressive taxation d. Due process
Question #14
No action shall be taken by the BIR on the taxpayer’s disputed issues until the taxpayer has paid the deficiency taxes.
a. Attributable to the undisputed issues in the assessment notice
b. If there was a failure to pay the deficiency tax within 60 days from BIR demand
c. When the assessment was issued against a false and fraudulent return
d. If the Regional Trial Court issues a writ of preliminary injunction to enjoin the BIR
Question #15
The following are administrative remedies available to a taxpayer in correction with collection of internal revenue taxes,
except one. Which one?
a. Entering into a compromise.
b. Filing criminal complaint against erring BIR officials or employees.

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 c. Filing protest for reinvestigation or reconsideration.
d. Filing claim for tax refund or credit.
Question #16
The taxpayers 2019 percentage tax return is required to be filed through the authorized agent bank under the
jurisdiction of RDO East Taguig. Without prior authorization from the Commissioner, the taxpayer files the return and
pays the tax through an authorized agent bank under the jurisdiction of RDO Cebu City on April 15, 2020. The tax due
and paid per return is P100,000.
The taxpayer did not file his income tax return for the calendar year 2017 which was due for filing on April 15, 2019. He
was notified by the BIR of his failure to file the tax return, for which reason, he filed his tax return and paid the tax, only
after the said notice, on June 30, 2020. The tax due per return was P100,000.
How much is the total amount due excluding suggested compromise for late filing and late payment of the tax?
a. None of the choices c. 199,155.24
b. 149,155.24 d. 174,155.24
Question #17
The following remedies for the collection of the taxes are available to the Government, except:
a. distraint and levy
b. enforcement of forfeiture of property
c. inquiring into bank deposit accounts of taxpayers
d. entering into compromise of tax cases
Question #18
To whom shall the written notice of the levy be mailed to or served upon?
a. Register of Deeds for the province or city where the property is located.
b. All of the choices.
c. The delinquent taxpayer, or if he be absent from the Philippines, to his agent or the manager of the business
which incurred the liability.
d. The occupant of the property in question, if the delinquent taxpayer has no agent or manager.
Question #19
A tax amnesty that forgives tax delinquency of prior years is an Executive act of the government.
A tax compromise that lowers the delinquent tax due from a taxpayer is a legislative act of Congress pursuant to its
power to legislate tax laws.
a. False, False c. True, True
b. True, False d. False , True
Question #20
DEF Corporation due to financial incapacity, requested that it be allowed to pay its income tax liability per return for
calendar year 2019, in the amount of P1,000,000 in four (4) monthly installments, starting April 15, 2020. Its request had
been duly approved pursuant to Sec. 53 of the Tax Code.
How much was the amount due on April 15, 2020?
a. 250,000.00 b. 254,166.67 c. 258,333.33 d. 262,500.00

DIFFICULT
Question #1
Barbaran municipality has an ordinance which requires that all stores, restaurants, and other establishments selling
liquor should pay a fixed annual fee of P20,000. Subsequently, the municipal board proposed an ordinance imposing a
sales tax equivalent to 5% of the amount paid for the purchase or consumption of liquor in stores, restaurants, and
other establishments. The municipal mayor refused to sign the ordinance on the ground that it would constitute double
taxation.
Is the refusal of the mayor justified?
a. No. The refusal of the mayor is unjustified because it is not within his power
b. No. The refusal of the mayor is not justified because double taxation will generate more revenue
c. No. The refusal of the mayor is unjustified because double taxation is allowed in our jurisdiction
d. No. The refusal of the mayor is not justified because the impositions are of different nature and character
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Question #2
Which of the following cannot be considered as tax avoidance?
a. None of the answers are correct c. Survivorship agreement
b. Holding period for capital asset transactions d. Splitting of donation
Question #3
Rural Bank filed a claim for refund with the BIR in the amount of P19,971,745 representing the alleged aggregate of the
excess of its carried-over total quarterly payments over the actual income tax due. Through an inter-office
memorandum of the Tax Credit/Refund Division, the BIR Commissioner came to know that Rural Bank had outstanding
tax liability in the amount of P56,588,741. In view whereof, the Commissioner claimed that such deficiency tax
assessment constitutes a bar to a claim for refund. On the other hand, Rural Bank contended that its tax refund is
meritorious as the deficiency tax assessment can still be disputed and therefore, not final.
Resolve
a. The BIR Commissioner correctly ruled that the deficiency tax assessment is a bar to a claim for refund. It is
logically necessary and legally appropriate that the issue of deficiency tax assessment be resolved jointly with
the taxpayers claim for refund, to determine once and for all in a single proceeding the true and correct amount
of tax due or refundable
b. Rural Bank is correct. The NIRC provides no prohibition against the filing of tax refund despite pending deficiency
tax assessment.
c. The BIR Commissioner is correct. The settled rule is that a deficiency tax assessment is not a bar to a claim for
tax refund or tax credit. However, the present case is an exception to the rule.
d. The BIR Commissioner is not correct. It is unfair for the taxpayer who filed tax refund to be subsequently
assessed for unpaid tax liability. Such practice smacks of unfairness and inequity.
Question #4
Penalties and/or interest imposed on the taxpayer may be abated or cancelled on the ground that the imposition
thereof is unjust and excessive, except when:
a. The taxpayer is declared insolvent or bankrupt.
b. The assessment is brought about or a result of the taxpayer’s non-compliance with the law due to a difficult
interpretation of the said law.
c. The filing of the return or payment of the tax is made at the wrong venue.
d. The taxpayer’s mistake in payment of his tax is due to erroneous written official advice of a revenue officer.
Question #5
Tony has inadvertently omitted P100,000 income in his 2019 Income Tax Return. Upon discovery in 2020, the BIR issued
an assessment for deficiency income taxfor P100,000 plus 50% fraud surcharge. Meanwhile, Tony included the omitted
P100,000 income in his 2020 Income Tax Return. What advice will you give Tony?
a. Amend his 2019 Income Tax return to reflect the correct amount of income
b. Protest the assessment
c. Pay the assessed tax plus surcharge, and thereafter , ask for refund
d. Any of the answers are correct
Question #6
Citing Section 10, Article VIII of the 1987 Constitution which provides that salaries of judges shall be fixed by law and
that during their continuance in office their salary shall not be decreased, a judge of a Regional Trial Court questioned
the deduction of withholding taxes from his salary since it results into a net deduction of his pay.
Is the contention of the judge correct?
a. No. The contention is incorrect because taxes are enforced contributions
b. No. The contention is not correct because deduction of withholding taxes is not a dimunition contemplated by
the fundamental law
c. No. The contention is incorrect because taxes must be collected in order to support the government
d. No. The contention is incorrect because deduction of withholding taxes is required by law
Question #7
Honda Corporation, adopting a fiscal year beginning July 1, 2007, filed its final corporate adjustment return on October
2, 2007. It having adopted a fiscal year, the deadline for the filing of the final adjustment return fell on October 15, 2007.
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On October 1, 2009, it filed a written claim for refund with the BIR for taxes excessively paid in 2007. The BIR having
outright denied its claim for refund, the corporation instituted a petition for review with the CTA on October 14, 2009.
The CTA dismissed the petition for having filed out of time. Claiming that the two-year period should commence to run
from the deadline fixed by the Tax Code, and not on the actual filing, it filed a petition for review on certiorari under
Rule 45 before the Supreme Court.
Resolve
a. The petition has merit because it was filed within the peremptory period of two years from the date of payment.
b. The petition is meritorious. Reason: October 15, 2008 is the reckoning date of the two-year period to file tax
refund.
c. The petition is unmeritorious because it is a wrong mode of appeal.
d. The petition lacks merit. Reason: It was filed out of time given that the deadline for the filing thereof fell on
October 2, 2009.
Question #8
What should the BIR do when the prescriptive period for the assessment of a tax deficiency is about to prescribe but the
taxpayer has not yet complied with the BIR requirements for the production of books of accounts and other records to
substantiate the claimed deductions, exemptions or credits?
a. Immediately conduct an investigation of the taxpayer’s activities
b. Call the taxpayer to a conference to explain the delay
c. Issue a notice of constructive distraint to protect government interest
d. Issue a jeopardy assessment coupled with a letter of demand
Question #9
Tony was being prosecuted by the BIR for failure to pay his income tax liability for calendar year 2000 despite several
demands by the BIR in 2004. The Information was filed with the RTC only last January 3, 2007. Tony filed a motion to
quash the Information on the ground of prescription, the Information having been filed beyond the 5-year reglementary
period. If you were the judge, will you dismiss the Information?
a. Yes. In as much as the violation was committed in 2000, the Information was filed beyond the 5-year
reglementary period.
b. No. The trial court can exercise jurisdiction because the discovery and commission of the offense fell within the
5-year reglementary period.
c. No. The trial court has jurisdiction over the offense as the prescription thereof begins to run from the time
Sanchez willfully refused to pay despite demands in 2004.
d. Yes. The offense has prescribed as the discovery thereof was in 2000.
Question #10
Due to an uncertainty whether or not a new tax is applicable to printing companies, ABC Printers submitted a legal query
to the BIR on that issue. The BIR issued a ruling that printing companies are not covered by the new law. Relying on this
ruling, ABC Printers did not pay said tax.
Subsequently, however, the BIR reversed the ruling and issued a new one stating that the tax covers printing companies.
Could the BIR now assess ABC Printers for back taxes corresponding to the years before the new ruling?
a. Yes. The reversal of the ruling is not prejudicial to the taxpayer.
b. Yes. The reversal of the ruling is within the power of the BIR.
c. None of the choices is correct
d. Yes. The reversal of the ruling is consistent with the lifeblood doctrine.
Question #11
Ka Tato owns a parcel of land in San Jose, Batangas declared for real property taxation, as agricultural. In 1990, he used
the land for a poultry feed processing plant but continued to declare the property as agricultural. In March 2011, the
local tax assessor discovered Ka Tato’s change of use of his land and informed the local treasurer who demanded
payment of deficiency real property taxes from 1990 to 2011. Has the action prescribed?
a. No, the deficiency taxes for the period 1990 up to 2011 may still be collected within 10 years from March 2011
b. Yes, more than 10 years had lapsed for the period 1990 up to 2000, hence the right to collect the deficiency
taxes has prescribed
c. No, the deficiency taxes may be collected within five years from when they fell due
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 d. Yes, more than 5 years had lapsed for the collection of the deficiency taxes for the period 1990 up to 2005
Question #12
Toto, Inc. received a notice of assessment and a letter from the BIR demanding the payment of P3 million pesos in
deficiency income taxes for the taxable year 2008. The financial statements of the company show that it has been
suffering financial reverses from the year 2009 up to the present. Its asset position shows that it could pay only
P500,000 which it offered as a compromise to the BIR. Which among the following may the BIR require to enable it to
enter into a compromise with Toto, Inc.?
a. Toto must waive its right to the secrecy of its bank deposits
b. Toto must immediately deposit the P500,000 with BIR
c. Toto must promise to pay its deficiency when financially able
d. Toto must show it has faithfully paid taxes before 2009
Question #13
P, a Filipino citizen residing in Makati City, owns a vacation house and lot in San Francisco, California, USA, which he
acquired in 2000 for P15M. On January 10, 2012, he sold said real property to J, another Filipino citizen residing in
Quezon City for P20M. On February 9, 2012, P filed the capital gains tax return and paid P1.2M representing 6% capital
gains tax. Since P did not derive any ordinary income, no income tax return was filed by him in 2012. After the tax audit
conducted in 2013, the BIR officer assessed P for deficiency income tax computed as follows: P5M (P20M less P15M) x
30% = P1.5M, without the capital gains tax paid being allowed as tax credit. P consulted a real estate broker who said
that the P1.2M capital gains tax should be credited from the P1.5M deficiency income tax. Is the BIR officer’s tax
assessment correct?
a. Yes, because the vacation house is located in USA
b. No, because the 30% tax rate applies to corporations
c. No, the capital gains tax paid should have been deducted from the P1.5M deficiency income tax
d. Yes, assessment issued by the BIR is presumed correct
Question #14
Juan, a Filipino citizen engaged in the real estate business, filed his 2011 income tax return on March 15, 2012. On
December 2012, he left the Philippines as an immigrant to join his family in Canada. After investigation of said return,
the BIR issued a notice of deficiency income tax assessment on April 15, 2014. Joan returned to the Philippines as a
balikbayan on December 8, 2014. Finding his name as a delinquent taxpayer, he filed a protest against the assessment
on the ground that he did not receive the notice of assessment and that the assessment had prescribed.
Will the protest of Juan prosper?
a. No.the right of the government to make a tax assessment in-prescriptible, irrespective of whether the
delinquent taxpayer is out of the country or not.
b. Yes. The assessment had prescribed because it was issued by the BIR on April 15, 2014, which is already beyond
the reglementary period of 3 years from the time the return was filed on March 20, 2012.
c. Yes. In the instant case, the suspension of the running of the prescriptive period applies because the assessment
notice was issued by the BIR beyond the 3 years prescriptive period.
d. No. The assessment has not prescribed because it was issued by the BIR on April 15, 2014, which is within the
reglementary period of 3 years from the time the return should have been filed on April 15, 2012.
Question #15
Cruz Corporation grants all its employees 5% discount of the purchase price of its products. During an audit investigation
made by the BIR, the BIR assessed the company for failure to withhold the corresponding tax on the amount equivalent
to the courtesy discount received by all the employees, contending that the courtesy discount is considered as
additional compensation for the rank and file employees and additional fringe benefit for the supervisor and managers.
Therefore, the monetary value of the courtesy discount should be considered as part of the compensation of the rank
and file employees subject to tax. For the supervisors and managers, the employer should be the one assessed pursuant
to Section 33 (A) of the NIRC. Is there a legal basis for the assessment made by the BIR?
a. There is legal basis for the assessment as the NIRC does not consider courtesy discount as de minimis benefit
b. The assessment has no legal basis in that courtesy discount partakes of the nature of the exempt fringe benefits.
c. The assessment has legal basis in that under RR10-2000, courtesy discount is not considered as de minimis benefit.
d. There is no legal basis for the assessment because courtesy discount qualifies as de minimis benefits, it being granted to
promote goodwill and contentment.
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Question #16
An individual taxpayer erroneously paid an internal revenue tax paid an internal revenue tax of P500,000 on November
14, 2010. He filed a claim for refund with the Commissioner of Internal Revenue on July 31, 2011. The BIR, however,
approved the refund only of P300,000 on January 20, 2013. This morning, September 27, 2017, he engaged your tax
services on a contingent basis for the purpose of recovering the remaining P200,000. Will you accept this engagement?
a. No, because the taxpayers claim for refund has been administratively fully satisfied
b. Yes, because the claim for refund was duly administratively within two years from the date of payment of the
tax.
c. Yes, because the denial of refund for the remaining P200,000 is still appealable to the Court of Tax Appeals.
d. No, because as of today, September 27, 2017, the right of the taxpayer to contest before the Court of Tax
Appeals the BIRs denial of the refund for the remaining P200,000 has already prescribed.
Question #17
Jose is a law-abiding citizen who pays his real estate taxes promptly. Due to a series of typhoons and adverse economic
conditions, an ordinance is passed by Quezon City granting a 50% discount for payment of unpaid real estate taxes for
the preceding year and the condonation of all penalties on fines resulting from the late payment.
Arguing that the ordinance rewards delinquent taxpayers and discriminates against prompt ones, Jose demands that he
be refunded an amount equivalent to one-half of the real estate taxes he paid. The municipal attorney rendered an
opinion that Jose cannot be reimbursed because the ordinance did not provide for such reimbursement. Jose files suit to
declare the ordinance void on the ground that it is a class legislation.
Will his suit prosper?
a. The suit will not prosper because the ordinance is based on substantial distinction. Each set of taxes is a class by
itself and the law would be open to attack only if all the taxpayers belonging to one class were not treated alike
b. The suit will not prosper because taxes are the lifeblood of the government and should be collected without
unnecessary hindrance
c. The suit will prosper because the ordinance is discriminatory in character
d. The suit will prosper because the ordinance is not based on substantial distinction
Question #18
In “Operation Kandado,” the BIR temporarily closed business establishments, including New Dynasty Corporation that
failed to comply with VAT regulations. New Dynasty contends that it should not be temporarily closed since it has a valid
and existing VAT registration, if faithfully issued VAT receipts, and filed the proper VAT returns. The contention may be
rejected if the BIR investigation reveals that
a. The taxpayer has not been regularly filing its income tax returns for the past 4 years
b. The taxpayer deliberately filed a false and fraudulent return with deliberate intention evade taxes
c. There was an understatement of taxable sales on receipts by 30% or more for the taxable quarter
d. The taxpayer used falsified documents to support its application for refund of taxes

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ANSWERS:

1. B
2. D
3. B
4. B
The Commissioner may credit or refund taxes erroneously or illegally received or penalties imposed
without authority, refund the value of internal or penalties imposed without authority, refund the value of
internal revenue stamps when they are returned in good condition by the purchaser, and, in his
discretion, redeem or change unused stamps that have been rendered unfit for use and refund their
value upon proof of destruction.
5. C
6. C
7. A
8. A
9. C
10. D
11. B
The date for filing the donors tax return in this case is April 13, 2009 (within 30 days after the date of
donation.) Since the return is filed before the due date prescribed by law, it shall be considered as filed
on such due date. Hence, the 3-year period will be counted from the due date.
12. A
The due date for filing the estate tax return in this case is July 1, 2009 (within 6 months after after
death). Since the return is filed on September 1, 2009 which is beyond the period prescribed by law,
the three (3)-year period shall be counted from the day the return is filed.
13. A
14. A
Instances where interest is not abated. 1) When the taxpayer fails to file a return and pay the tax on
time due to substantial losses from prolonged labor, force majeure or legitimate business reverses. 2)
When the taxpayer fails to file the return and pay the correct tax on time due to circumstances beyond
his control. 3) Filing an amended return under meritorious circumstances. 4) Late remittance of
withholding tax on compensation of expatriates for services rendered in the Philippines pending the
issuance by the SEC of the license to the Philippine branch office or subsidiary.
15. B
Instances when penalties and/or interest imposed may be abated or cancelled on the ground that the
imposition is unjust and excessive. 1) When the filing of the return/payment is made at the wrong
venue. 2) When the filing of the return/payment of his tax is due to erroneous written official advice of a
revenue officer. 3) When the taxpayer fails to file a return and pay the tax on time due substantial
losses from prolonged labor dispute, force majeure or legitimate business reverses. Note: In no. 3)
above the abatement shall only cover the surcharge and the compromise penalty and not the interest.
4) When the assessment is brought about or the result of the taxpayers non-compliance with the law
due to a difficult interpretation of the said law. 5) When the taxpayer fails to file the return and pay the
correct tax on time due to circumstances beyond his control, provided however, that abatement shall
cover only the surcharge and the compromise penalty and not the interest. 6) Late payment of the tax
under meritorious circumstances.
16. A
17. C
18. A
The following cases may, upon taxpayer compliance with the basis set forth under Section 3 of
Revenue Regulations No. 30-2002, be the subject matter of compromise settlement, viz: 1) Delinquent
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 accounts. 2) Cases under administrative protest after issuance of the Final Notice of Assessment to the
taxpayer which are still pending in the Regional Offices, Revenue District Offices, Legal Service, Large
Taxpayer Service (LTS), Collection Service, Enforcement Service and other offices in the National
Office. 3) Civil tax cases being disputed before the courts. 4) Collection cases filed in courts. 5)
Criminal violations, other than those already filed in court or those involving criminal tax fraud.
19. B
20. C

1. C
2. B

3. A
4. B
5. D
6. D
7. A
All appropriation, revenue or tariff bills authorizing increase of the public debt, bills of application, and
private bills shall originate exclusively in the House of Representatives, but the Senate may propose or
concur with amendments (Art. VI, Sec. 24)
8. D
9. A

10. C
11. B
12. D
13. A
The rule of taxation shall be uniform and equitable. The Congress shall evolve a progressive system of
taxation [Art. VI, Sec. 28 (1)].
14. A
15. B
16. D
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 17. C
18. B
19. B
20. A Amount due, April 15, 2020 (P1,000,000/4) = P250,000

1. D
2. A
3. D
4. A
5. B
6. B
7. D
8. D
9. B
10. C
11. A
12. A
13. B
14. D
15. C
16. D
17. A
18. C

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