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TAXPAYER’S REMEDIES
GR: Under this rule, “No court shall have the authority to grant
What are the remedies available to the taxpayer? an injunction to restrain the collection of any national internal
revenue, tax, fee or charge.” (Sec. 219, R.A. 8424)
1. Administrative
XPN: The CTA can issue injunction in aid of its appellate
a. Before payment of taxes: jurisdiction if in its opinion the same may jeopardize the interest
of the government and/or the taxpayer. In this instance, the
a. Dispute Assessment (Protest) court may require the taxpayer either to deposit the amount
i. Request for reconsideration claimed or file a surety bond for not more than double the
ii. Request for reinvestigation amount with the court. (RA 1125 as amended by RA 9282)

b. Entering a compromise agreement Note: The Lifeblood doctrine requires that the collection of taxes
cannot be enjoined, without taxation, a government can neither
b. After payment of taxes: exist nor endure.

a. Claim for Tax Refund ASSESSMENT

2. Judicial What is a notice of assessment?

a. Civil
b. Criminal A: It is a written notice to a taxpayer to the effect that the
amount stated therein is due as tax and containing a
3. Substantive demand for the payment. It is a finding by the taxing agency
a. Question validity of tax statute/ regulation that the taxpayer has not paid his correct taxes.
b. Non-retroactivity of rulings
c. Must be informed of the legal and factual bases of Note: A notice of assessment contains not only a computation
assessment of tax liabilities but also a demand for the payment within a
d. Preservation of books of accounts and examination prescribed period. It also signals the time when penalties and
once a year interests begin to accrue.

What is the importance of tax remedies? What is the importance of a tax assessment?

1. To the government - For the regular collection of revenue A. TO THE GOVERNMENT

necessary for the existence of the government.
2. To the taxpayer - They are safeguards of the taxpayer’s
rights against arbitrary action.
State the “No injunction to restrain tax collection rule.”
1. In the proper pursuit of judicial and extrajudicial
remedies to enforce taxpayer liabilities and certain
matters that relate to it, such as the imposition of
surcharges and interests;
2. In the application of the Statute of Limitations;

3. In the establishment of tax liens; and
4. In estimating the revenues that may be collected by
the government.
B. TO THE TAXPAYER
1. To inform the taxpayer of his liabilities;
2. To determine the period within which to protest.
3. To determine prescription of government claim.
What is the nature of an assessment?
It is merely a notice to the effect that the amount stated
therein is due as tax and containing a demand for the
payment. (Alhambra Cigar Mfg. Co. v. CIR, GR L-23226, Nov.
28, 1967)
Who has the burden of proof in pre-assessment
proceedings?
The burden of proof is on the taxpayer for there is a presumption
of correctness on the part of the CIR. Otherwise, the finding of
the CIR will be conclusive and the CIR will assess the taxpayer.
If the taxpayer does not controvert, such finding is conclusive,
even if the CIR is wrong.
What are the principles governing tax assessments? (PAD)
1. Assessments:
a. Prima facie presumed correct and made in good faith;
b. Should be based on Actual facts; (estimates can also
be a basis given that it is not arrived at arbitrarily or
capriciously)
c. Discretionary on the part of the Commissioner;
d. Must be Directed to the right party.
2. The authority vested in the Commissioner to assess taxes
may be Delegated.
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Is the assessment made by the CIR subject to judicial
review?
No, for such power is discretionary. What may be the subject of
a judicial review is the decision of the CIR on the protest
against the assessment, not the assessment itself.
Are taxes self-assessing?
GR: Taxes are generally self-assessing and do not require the
issuance of an assessment notice in order to establish the tax
liability of a taxpayer.
XPNs:
1. Improperly Accumulated Earnings Tax (Sec. 29, NIRC)
2. When the taxable period of a taxpayer is terminated (Sec. 6
[D], NIRC)
3. In case of deficiency tax liability arising from a tax audit
conducted by the BIR (Sec. 56 [B], NIRC)
4. Tax lien (Sec. 219, NIRC)
5. Dissolving corporation (Sec. 52 [c], NIRC)
What are the different ways of paying taxes?
1. Pay-as-you-file system – Income for individuals and
corporation shall be paid by the person subject thereto at the
time the return is filed. (Sec. 56, NIRC)
2. Installment payment – When income tax due is in excess
of P2,000 and the taxpayer is not a corporation, he may elect
to pay the tax in two equal installments. First installment is
when the return is filed and the second installment is on or
before July 15 following the close of the calendar year. (Sec. 56
A [2], NIRC)
Requisites for Valid Assessment
What are the requisites for a valid assessment?

The assessment must:
1. Be in writing and signed by the BIR;
2. Contain the law and the facts on which the assessment is
made; and
3. Contain a demand for payment within the prescribed period.
(Sec. 228, NIRC)
If the taxpayer’s record or methods of accounting are not
reflective of his true income, what methods may be utilized
by the CIR to determine the correct taxable income of the
taxpayer? (NCPBUTTS)
1. Net worth method
2. Cash expenditure method
3. Percentage method
4. Bank deposit method
5. Unit and value method
6. Third party information or access to records method
7. Surveillance and assessment method
8. Such methods as in the opinion of the BIR Commissioner
clearly reflect the income (1969 Bar Question)
A Co., a DC, is a big manufacturer of consumer goods and
has several suppliers of raw materials. The BIR suspects
that some of the suppliers are not properly reporting their
income on their sales to A Co. The CIR therefore: 1) Issued
an access letter to A Co. to furnish the BIR information on
sales and payments to its suppliers. 2) Issued an access
letter to X Bank to furnish the BIR on deposits of some
suppliers of A Co. on the alleged ground that the suppliers
are committing tax evasion. A Co., X Bank and the
suppliers have not been issued by the BIR letter of
authority to examine. A Co. and X Bank believe that the
BIR is on a "fishing expedition" and come to you for
counsel. What is your advice?
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I will advise A Co. and X Bank that the BIR is justified only in
getting information from the former but not from the latter. The
BIR is authorized to obtain information from other persons
other than those whose internal revenue tax liability is subject
to audit or investigation. However, this power shall not be
construed as granting the CIR the authority to inquire into bank
deposits. (Sec. 5, NIRC) (1999 Bar Question)
BIR assessed the taxpayer for alleged deficiency taxes.
The assessment was based on photocopies of 77
Consumption Entries furnished by an informer, the
taxpayer understated its importations. However, the BIR
failed to secure certified true copies of the subject
Consumption Entries from the Bureau of Customs since,
according to the custodian, the originals had been eaten
by termites. Can the BIR base its assessment on mere
photocopies of records/documents?
No, mere photocopies of the Consumption Entries have no
probative weight if offered as proof of the contents thereof. While
it is true that under the Tax Code, the BIR can assess taxpayers
based on the “best evidence obtainable” and that tax
assessments are presumed correct and made in good faith, it is
elementary that the assessment must be based on actual
facts. The best evidence obtainable provided under the Tax
Code does not include mere photocopies of records or
documents. The presumption of the correctness of an
assessment, being a mere presumption, cannot be made to rest
on another presumption. (CIR v. Hantex Trading Co., Inc., GR
136975, Mar. 31, 2005)