Tax Policy Admin MCQ

7/24/2019 Tax Policy Admin MCQ

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Never Let The Odds Keep You From Pursuing What You Know In Your Heart You Were Meant To Do!"Lero# $at%he& Paige

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Ta*ation Law +,-s .)//0")/'12 [email protected]@gmail.com

Tax policy Admin MCQ

IV. Congress passed a sin tax law that increased the tax rates on cigarettes by

1,!. The law was tho"ght to be s"#cient to dri$e many cigarette companies o"t

o% b"siness, and was &"estioned in co"rt by a cigarette company that wo"ld go o"to% b"siness beca"se it wo"ld not be able to pay the increased tax. The cigarette

company is '''''''''' (1!)

(A) wrong beca"se taxes are the li%eblood o% the go$ernment

.32wrong 4e%ause the &aw re%ogni5es that the power to ta* is the power

to destro#

.62correct beca"se no go$ernment can depri$e a person o% his

li$elihood.D2correct beca"se Congress, in this case, exceeded its power to tax

$7889$T9D -N$W9:;

.32 M%6u&&o%h v Mar#&and< '0 7$ = Wheat 1'> .'?'@2

VI.The m"nicipality o% *an Isidro passed an ordinance imposing a tax on installation

managers. At that time, there was only one installation manager in the m"nicipality+th"s, only he wo"ld be liable %or the tax.

Is the law constit"tional (1!)(A) It is "nconstit"tional beca"se it clearly discriminates against this person.(-) It is "nconstit"tional %or lac o% legal basis.

(C) It is %onstitutiona& as it app&ies to a&& persons in that %&ass(/) It is constit"tional beca"se the power to tax is the power to destroy.

$7889$T9D -N$W9:;

.62$he&& 6o o( PI v AaBo< @= Phi& 1?0

VII. 02 Corporation man"%act"res glass panels and is almost at the point o% insol$ency.

It has no more cash and all it has are "nsold glass panels. It recei$ed an assessment%rom the -I3 %or de4ciency income taxes. It wants to pay b"t d"e to lac o% cash, it

sees permission to pay in ind with glass panels.*ho"ld the -I3 grant the re&"ested permission (1!)

(A) It sho"ld grant permission to mae payment con$enient to taxpayers.(-) It shou&d not grant permission 4e%ause a ta* is genera& a pe%uniar#

4urden

(C) It sho"ld grant permission+ otherwise, 02 Corporation wo"ld not be able to

pay.(/) It sho"ld not grant permission beca"se the go$ernment does not ha$e the

storage %acilities %or glass panels.

$7889$T9D -N$W9:;.326hara%teristi%s o( Ta*es

VIII. 5rior to the VAT law, sales o% cars were s"b6ect to a sales tax b"t the tax

applied only to the original or the 4rst sale+ the second and s"bse&"ent sales were

not s"b6ect to tax./eltoid Motors, Inc. (/eltoid) hit on the idea o% setting "p a wholly7owned

s"bsidiary, 8onmad Motors, Inc. (8onmad), and o% selling its assembled cars to

8onmad at a low price so it wo"ld pay a lower tax on the 4rst sale. 8onmad wo"ld


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then sell the cars to the p"blic at a higher price witho"t paying any sales tax on thiss"bse&"ent sale.

Characteri9e the arrangement. (1!)

A. The plan is a legitimate exercise o% tax planning and merely taesad$antage o% a loophole in the law. -. The plan is legal beca"se the go$ernment

collects taxes anyway.6 The p&an is improper the vei& o( %orporate E%tion %an 4e pier%ed so

that the se%ond sa&e wi&& 4e %onsidered the ta*a4&e sa&e

D The go$ernment m"st respect 8onmad:s separate 6"ridical personality and

/eltoid:s taxable sale to it.$7889$T9D -N$W9:;

.62Koppe& Phi&ippines In% v Yat%o< 00

Phi& =@>

VI. 5heleco is a power generation and distrib"tion company operating mainly %rom the

City o% Tag"ig. It owns electric poles which it also rents o"t to other companies that

"se poles s"ch as telephone and cable companies. Tag"ig passed an ordinanceimposing a %ee e&"i$alent to 1! o% the ann"al rental %or these poles. 5heleco

&"estioned :the legality o% the ordinance on the gro"nd that it imposes an income

tax which local go$ernment "nits (;8/

(1) -an A deposited money with -an - which earns interest that is s"b6ected to

the =! 4nal withholding tax. At the same time, -an A is s"b6ected to the >!gross receipts tax on its interest income on loan transactions to c"stomers. ?hich

statement below IC33BCT; describes the transaction

.-2 There is dou4&e ta*ation 4e%ause two ta*es " in%ome ta* and gross

re%eipts ta* are imposed on the interest in%omes des%ri4ed a4ove< anddou4&e ta*ation is prohi4ited under the '@?0 6onstitution (-) There is nodo"ble taxation beca"se the 4rst tax is income tax, while the second tax is b"siness

tax+(C)There is no do"ble taxation beca"se the income tax is on the interest income o%

-an A on its deposits with -an - (passi$e income), while the gross receipts tax is


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on the interest Income recei$ed by -an A %rom loans to its debtor7c"stomers(acti$e income)+

(/) Income tax on interest income o% deposits o% -an A is a direct tax, while 83T on

interest income on loan transaction is an indirect tax.$7889$T9D -N$W9:;

.-2 There is no dou4&e ta*ation i( the &aw imposes two dierent ta*es onthe same in%ome< 4usiness or propert# First< the ta*es herein are

imposed on two dierent su4Ge%t matters The su4Ge%t matter o( the FWT

Fina& Withho&ding Ta* is the passive in%ome generated in the (orm o(interest on deposits and #ie&d on deposit su4stitutes< whi&e the su4Ge%t

matter o( the 8:T 8ross

:e%eipts Ta* is the privi&ege o( engaging in the 4usiness o( 4anJing

$e%ond< a&though 4oth ta*es are nationa& in s%ope 4e%ause the# areimposed 4# the same ta*ing authorit# " the nationa& government under

the Ta* 6ode " and operate within the same Phi&ippine Gurisdi%tion (or the

same purpose o( raising revenues< the ta*ing periods the# ae%t are

dierent The FWT is dedu%ted and withhe&d as soon as the in%ome isearned< and is paid a(ter ever# %a&endar uarter in whi%h it is earned On

the other hand< the 8:T is neither dedu%ted nor withhe&d< 4ut is paid ona(ter ever# ta*a4&e uarter in whi%h it is earned .6ommissioner o(

Interna& :evenue vs 3PI< 8: No '=010C dated une )>2

(=) ?hich o% the %ollowing statements is T correct

(A) In case o% do"bt, stat"tes le$ying taxes are constr"ed strictly against the

go$ernment+

(-)The constr"ction o% a stat"te made by his predecessors is not binding "pon thes"ccessor, i% therea%ter he becomes satis4ed that a dierent constr"ction sho"ld be

gi$en+(C)The re$ersal o% a r"ling shall not generally be gi$en retroacti$e application, i% said

re$ersal will be pre6"dicial to the taxpayer+(/) - memorandum %ir%u&ar promu&gated 4# the 6I: that imposes pena&t# (or

vio&ations o( %ertain ru&es needed not 4e pu4&ished in a newspaper o(

genera& %ir%u&ation or o%ia& ga5ette 4e%ause it has the (or%e and ee%t o(

&aw$7889$T9D -N$W9:;

.D2 - revenue memorandum %ir%u&ar sha&& not 4egin to 4e operative unti&

a(ter due noti%e thereo( ma# 4e (air presumed .6ommissioner o( Interna&:evenue vs Phi&ippine -ir&ines< 8: No

'?//>> dated u ?< )//@2

D) ?hich statement below expresses the li%eblood theory


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(A)The assessed taxes m"st be en%orced by the go$ernment.(-) The undering 4asis o( ta*ation is government ne%essit#< (or without

ta*ation< a government %an neither e*ist nor endure(C)Taxation is an arbitrary method o% exaction by those who are in the seat o% power+(/)The power o% taxation is an inherent power o% the so$ereign to impose b"rdens "pon

s"b6ects and ob6ects Ewithin its 6"risdiction %or the p"rpose o% raising re$en"esF.$7889$T9D -N$W9:;

.32 Ta*es are the &i(e4&ood o( the government< (or without ta*es< the

government %an neither e*ist nor endure - prin%ipa& attri4ute o(sovereignt#< the e*er%ise o( ta*ing power derives its sour%e (rom the ver#

e*isten%e o( the state whose so%ia& %ontra%t with its %iti5ens o4&iges it to

promote pu4&i% interest and %ommon good The theor# 4ehind the e*er%ise

o( the power to ta* emanates (rom ne%essit# without ta*es< government%annot (u&E& its mandate o( promoting the genera& we&(are and we&&"4eing

o( the peop&e .Nationa& Power 6orporation vs 6it# o( 6a4anatuan< 8:

No '=@''/

-pri& @< )//12

(G) ?hich statement is ?38

.-2The power o( ta*ation ma# 4e e*er%ised 4# the government< its po&iti%a&

su4divisions< and pu4&i%uti&ities

.328enerally, there is no limit on the amo"nt o% tax that may be imposed+ (C) Themoney contrib"ted as tax becomes part o% the p"blic %"nds+ (/) The power o% tax is

s"b6ect to certain constit"tional limitations.$7889$T9D -N$W9:;

.-2 Inherent Powers o( the $tate

(>) The 5hilippines adopted the semi7global tax system, which means thatH

(A) All taxable incomes, regardless o% the nat"re o% income, are added together to

arri$e at gross income, and all allowable taxable income+(-) -&& in%omes su4Ge%t to Ena& withho&ding ta*es are &ia4&e to in%ome ta*

under the s%hedu&ar ta* s#stem< whi&e a&& ordinar# in%ome as we&& as

in%ome not su4Ge%t to Ena& withho&ding ta*es are &ia4&e to in%ome ta*under the< g&o4a& ta* s#stem

(C) All taxable incomes are s"b6ect to 4nal withholding taxes "nder the sched"lar tax

system+(/) All taxable incomes %rom so"rces within and witho"t the 5hilippines are liable toincome tax.

$7889$T9D -N$W9:;.32 8enera& Prin%ip&es o( Ta*ation


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(1) ?hich statement is correct A nonstoc, non7pro4t charitable association thatsells its idle agric"lt"ral property isH

(A) ot re&"ired to 4le an income tax ret"rn, nor pay income tax one the transaction tothe -I3, pro$ided the sales proceeds are in$ested in another real estate d"ring the

year+(-) :euired to pa# the > %apita& gains ta* on the gross se&&ing pri%e or (air

marJet va&ue< whi%hever is higher (C) Mandated to pay the D! reg"lar

corporate income tax on the gain %rom sale+ (/) 3e&"ired to withhold the applicable

expanded withholding tax rate on the transaction and remit the same to the -I3.$7889$T9D -N$W9:;

.32 $e%tion 1/< NI:6

(J1) ?hich statement is correct

(A) ;egislati$e acts passed by the m"nicipal co"ncil in the exercise o% its lawmaing

a"thority are denominated as resol"tions and ordinances+(-) ;egislati$e acts passed by the m"nicipal co"ncil in the exercise o% its lawmaing

a"thority are denominated as resol"tions+

.62 Legis&ative a%ts passed 4# the muni%ipa& %oun%i& in the e*er%ise o( its

&awmaJing authorit# are denominated as ordinan%es

(/) -oth ordinances and resol"tions are solemn and %ormal acts.$7889$T9D -N$W9:;

.62 $e%tion )))0< :evised -dministrative

6ode o( '@'0

(J=) ?hich o% the %ollowing statements is T a test o% a $alid ordinance

(A) It m"st not contra$ene the Constit"tion or any stat"te+(-) It m"st not be "n%air or oppressi$e+(C) It m"st not be partial or discriminatory+ .D2 It ma# prohi4it or regu&ate trade

$7889$T9D -N$W9:;(/) To 4e va&id< an ordinan%e must not prohi4it 4ut ma# regu&ate trade

.MagtaGas v Pr#%e Properties

6orporation< In%< 8: No '''/@0< u

)/< '@@=2

(JD) Taxing power o% local go$ernment "nits shall T extend to the %ollowing taxes,

except oneH.-2In%ome ta* on 4anJs and other Enan%ia& institutions

.32Taxes o% any ind on the national go$ernment, its agencies and instr"mentalities,

and local go$ernment "nits+


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.62Taxes on agric"lt"ral and a&"atic prod"cts when sold by the marginal %armers or4shermen+ (/) Bxcise taxes on articles en"merated "nder the ational Internal

3e$en"e Code.$7889$T9D -N$W9:;

.-2 $e%tion '?>< :- 0'>/

(JG) ?hich statement on prescripti$e periods is tr"e

(A) The prescripti$e periods to assess taxes in the ational Internal 3e$en"e Code

and the ;ocal 8o$ernment Code are the same+ .32 Lo%a& ta*es sha&& 4e assessed

within Eve .C2 #ears (rom the date the# 4e%ame due

(C) Action %or the collection o% local taxes may be instit"ted a%ter the expiration o% the

period to assess and to collect the tax+(/) ;ocal taxes may be assessed within ten (1) years %rom disco$ery o% the

"nderpayment o% tax which does not constit"te %ra"d.

$7889$T9D -N$W9:;

.32 $e%tion '@=< :- 0'>/

(JJ) The Manila International Airport A"thority (MIAA) is exempt %rom real property

tax. ?hich statement below is T correct

(A) MIAA is not a go$ernment7owned or controlled corporation beca"se it is not

organi9ed as a stoc or non7stoc corporation+(-) MIAA is a go$ernment instr"mentality $ested with corporate powers and

per%orming essential p"blic ser$ices+ (C) MIAA is not a taxable entity beca"se the

real property is owned by the 3ep"blic o% the 5hilippines and the bene4cial "se o%

s"ch property has not been granted to a pri$ate entity+.D2 MI-- is a government"owned or %ontro&&ed %orporation 4e%ause it isreuired to meet the test o( e%onomi% via4i&it#

$7889$T9D -N$W9:;

.D2 MI-- vs 6it# o( Pasa#< 8: No'>1/0)< -pri& )< )//@

(1) A m"nicipality may le$y an ann"al ad $alorem tax on real property s"ch as land,

b"ilding, machinery, and other impro$ement only i%

.-2the rea& propert# is within the Metropo&itan Mani&a -rea

.32the real property is located in the m"nicipality.

.62the /I;8 a"thori9es it to do so..D2the power is delegated to it by the pro$ince.

(=) Anne ;apada, a st"dent acti$ist, wants to imp"gn the $alidity o% a tax on text

messages. Aside %rom claiming that the law ad$ersely aects her since she

sends messages by text, what may she allege that wo"ld strengthen her claim

to the right to 4le a taxpayerKs s"it


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.-2That she is entitled to the ret"rn o% the taxes collected %rom her in casethe co"rt n"lli4es the tax meas"re.

.32That ta* mone# is 4eing e*tra%ted and spent in vio&ation o( the%onstitutiona& guaranteed right to (reedom o( %ommuni%ation.

.62That she is 4ling the case in behal% o% a s"bstantial n"mber o%

taxpayers..D2That text messages are an important part o% the li$es o% the people she

represents.

(D) ?hich theory in taxation states that witho"t taxes, a go$ernment wo"ld be

paraly9ed %or lac o% power to acti$ate and operate it, res"lting in its

destr"ction

.-25ower to destroy theory

.32Li(e4&ood theor#

.62*"mpt"ary theory

.D2*ymbiotic doctrine


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Page''=o( )'Never Let The Odds Keep You From Pursuing What You Know In Your Heart You Were Meant To Do!"Lero# $at%he& Paige

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(G) /o"ble taxation in its general sense means taxing the same s"b6ect twiced"ring the same taxing period. In this sense, do"ble taxation

.-2$iolates s"bstanti$e d"e process.

.32does not $iolate s"bstanti$e d"e process.

.62vio&ates the right to eua& prote%tion

.D2does not $iolate the right to e&"al protection.

(>)The act"al eort exerted by the go$ernment to eect the exaction o% what is

d"e %rom the taxpayer is nown as

.-2assessment.

.32 le$y.

.62payment.

.D2%o&&e%tion(J) Altho"gh the power o% taxation is basically legislati$e in character, it is T the

%"nction o% Congress to

.-24x with certainty the amo"nt o% taxes.

.32%o&&e%t the ta* &evied under the &aw

.62 identi%y who sho"ld collect the tax.

.D2determine who sho"ld be s"b6ect to the tax.

(L) An example o% a tax where the concept o% progressi$ity 4nds application is the.-2 in%ome ta* on individua&s

(-) excise

taxprod"cts.

on petrole"m

(C) $al"e7added

articles.

tax on certain

(/) am"sement tax on boxing

(1) ?hat is the r"le on the taxability o% income that a go$ernment ed"cational

instit"tion deri$es %rom its school operations *"ch income is

.-2s"b6ect to 1! tax on its net taxable income as i% it is a proprietary

ed"cational instit"tion.

.329*empt (rom in%ome ta*ation i( it is a%tua&< dire%t< and

e*%&usive used (or edu%ationa& purposes

.62s"b6ect to the ordinary income tax rates with respect to incomes deri$ed

%rom ed"cational acti$ities..D2Bxempt %rom income taxation in the same manner as go$ernmentowned

and controlled corporations.

() 3eal property owned by the national go$ernment is exempt %rom real propertytaxation "nless the national go$ernment


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.-2trans%ers it %or the "se o% a local go$ernment "nit.

.32&eases the rea& propert# to a 4usiness esta4&ishment

.62grat"ito"sly allows its "se %or ed"cational p"rposes by a school

established %or pro4t.

.D2sells the property to a go$ernment7owned non7pro4t corporation.

() 3eal property taxes sho"ld not disregard increases in the $al"e o% real propertyocc"rring o$er a long period o% time. To do otherwise wo"ld $iolate the canon o%

a so"nd tax system re%erred to as

.-2theoretical 6"stice.

.32Es%a& adeua%#

.62administrati$e %easibility.

.D2symbiotic relationship.(1) The power to tax is the power to destroy. Is this always so

.-2o. The Bxec"ti$e -ranch may decide not to en%orce a tax law which it

belie$es to be con4scatory.

.32es. The tax collectors sho"ld en%orce a tax law e$en i% it res"lts to thedestr"ction o% the property rights o% a taxpayer.

.62es. Tax laws sho"ld always be en%orced beca"se witho"t taxes the $ery

existence o% the *tate is endangered.

.D2No The $upreme 6ourt ma# nu&&i(# a ta* &aw< hen%e< propert#

rights are not ae%ted

(11) ;"alhati Bd"cational No"ndation, Inc., a stoc ed"cational instit"tionorgani9ed %or pro4t, decided to lease %or commercial "se a 1,> s&. m. portion

o% its school. The school act"ally, directly, and excl"si$ely "sed the rents %or the

maintenance o% its school b"ildings, incl"ding payment o% 6anitorial ser$ices. Is

the leased portion s"b6ect to real property tax.-2es, since ;"alhati is a stoc and %or pro4t ed"cational instit"tion.

.32o, since the school act"ally, directly, and excl"si$ely "sed the rents %ored"cational p"rposes.

.62o, b"t it may be s"b6ect to income taxation on the rents it recei$es.

.D2Yes< sin%e the &eased portion is not a%tua&< dire%t< and

e*%&usive used (or edu%ationa& purposes

(1=) Money collected %rom taxation shall not be paid to any religio"s dignitary

B0CB5T when.-2the re&igious dignitar# is assigned to the Phi&ippine -rm#

.32 it is paid by a local go$ernment "nit.

.62 the payment is passed in a"dit by the CA.

.D2it is part o% a lawmaerKs por barrel.

(1D) /iscriminatory d"ties may T be imposed "pon articles


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.-2wholly man"%act"red in the discriminating co"ntry b"t carried by$essels o% another co"ntry.

.32not man"%act"red in the discriminating co"ntry b"t carried by $essels o%

s"ch co"ntry.

.62partly man"%act"red in the discriminating co"ntry b"t carried by $essels

o% another co"ntry..D2not manu(a%tured in the dis%riminating %ountr# and %arried 4#

vesse&s o( another %ountr#

(1G) ?hich among the %ollowing concepts o% taxation is the basis %or the sit"s o%

income taxation

.-2;i%eblood doctrine o% taxation

.32$#m4ioti% re&ation in ta*ation

.62Compensatory p"rpose o%

taxation

.D2*"mpt"ary p"rpose o% taxation

(1>) The head priest o% the religio"s sect Tres 5ersonas *olo /ios, as the

corporation sole, rented o"t a >, s&. m. lot registered in its name %or "se asschool site o% a school organi9ed %or pro4t. The sect "sed the rentals %or the

s"pport and "peep o% its priests. The rented lot is

.-2not exempt %rom real property taxes beca"se the "ser is organi9ed %or

pro4t.

.32exempt %rom real property taxes since it is act"ally, directly, and

excl"si$ely "sed %or religio"s p"rposes.

.62not exempt %rom real property taxes since it is the rents, not the land,that is "sed %or religio"s p"rposes.

.D2e*empt (rom rea& propert# ta*es sin%e it is a%tua&< dire%t.F2< NI:6

GJ) n April 1>, =11, the Commissioner o% Internal 3e$en"e mailed by registered

mail the 4nal assessment notice and the demand letter co$ering the calendar year

=L with the QC 5ost #ce. ?hich statement is correct

(A) The assessment notice is $oid beca"se it was mailed beyond the prescripti$e

period+ (-) The assessment notice is $oid beca"se it was not recei$ed by thetaxpayer within the three7year period %rom the date o% 4ling o% the tax ret"rn+


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(C)The assessment notice is $oid i% the taxpayer can show that the same was recei$edonly a%ter one(1) month %rom date o% mailing+

(/) The assessment noti%e is va&id even i( the ta*pa#er re%eived< the samea(ter the three"#ear period (rom the date o( E&ing o( the ta* return

$7889$T9D -N$W9:;

.D2 $e%tion )/1< NI:6 3PI v 6I:< 8:No '1@01>< O%to4er '0< )//C

(GL) A 5reliminary Assessment otice (5A) is T re&"ired to be iss"ed by the -I3

be%ore iss"ing a Ninal Assessment otice (NA) in one o% the %ollowing casesH

(A) ?hen a taxpayer does not pay the =1 de4ciency income tax liability on or be%ore

"ly 1> o% the year+(-) When the Ending (or an# deE%ien%# ta* is the resu&t mathemati%a& error in

the %omputation o( the ta* as appearing on the (a%e o( the return

(C) ?hen a discrepancy has been determined between the $al"e added tax paid and

the amo"nt d"e %or the year+ (/) ?hen the amo"nt o% discrepancy shown in the;etter otice is not paid within thirty

(D) days %rom date o% receipt.$7889$T9D -N$W9:;

.32 $e%tion ))?< NI:6

(G) ?hen a protest against the de4ciency income tax assessment was denied by

the -I3 3egional /irector o% Q"e9on City, the appeal to the Co"rt o% Tax Appealsm"st be 4led by a taxpayerH

(A) I% the amo"nt o% basic tax assessed is 51,. or more+

(-) I% the amo"nt o% basic tax assessed is5D,. or more+(C) I% the amo"nt o% basic tax assessed is 5>,. or more+(/) I% the amo"nt o% basic tax assessed is 51 Million or more.

$7889$T9D -N$W9:;-&& the %hoi%es are %orre%t -&& the de%isions on disputed assessments are

appea&a4&e to the 6T- .in Division2 irrespe%tive o( the amount .$e%tion 1, =11 and 4led its

re&"est %or rein$estigation against the assessment on April D, =11. Additionaldoc"mentary e$idence in s"pport o% its protest was s"bmitted by it on "ne D,

=11. I% no denial o% the protest was recei$ed by the taxpayer, when is the last day%or the 4ling o% its appeal to the CTA

(A) o$ember D, =11+


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(-) /ecember D, =11+(C)anuar# 1/< )/') (/) Nebr"ary =, =1=.

$7889$T9D -N$W9:;.62 $e%tion ))?< NI:6

(>) 1) ?hich co"rt has 6"risdiction to determine i% the warrant o% distraint and le$y

iss"ed by the -I3 is $alid and to r"le i% the wai$er o% the *tat"te o% ;imitations was$alidly eected

(A) City Co"rts+(-) 3egional Trial Co"rts+ .62 6ourt o( Ta* -ppea&s (/) Co"rt o% Appeals.

$7889$T9D -N$W9:;(C) $e%tion 0< :- @)?)

(>=) ?hich statement below on compromise o% tax liability is correct

(A) Compromise o% a tax liability is a$ailable only at the administrati$e le$el+ (-)

Compromise o% a tax liability is a$ailable only be%ore trial at the CTA+.62 6ompromise o( a ta* &ia4i&it# is avai&a4&e even during appea&< provided

that prior &eave o( %ourt is o4tained (/) Compromise o% a tax liability is stilla$ailable e$en a%ter the co"rt decision has become 4nal and exec"tory.$7889$T9D -N$W9:;

.62 :: 1/")//)

(>D) In case o% %"ll or partial denial o% the written claim %or re%"nd or excess inp"t tax

directly attrib"table to 9ero7rated sales, or the %ail"re on the part o% theCommissioner to act on the application within 1= days %rom the date o% s"bmission

o% complete doc"ments, an appeal m"st be 4led with the CTAH


15/22


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(A) ?ithin thirty (D) days a%ter 4ling the administrati$e claim with the -I3+ (-)

?ithin sixty (J) days a%ter 4ling the administrati$e claim with the -I3+ (C) ?ithin

one h"ndred twenty (1=) days a%ter 4ling the administrati$e claim with the -I3+.D2 Within thirt# .1/2 da#s (rom the re%eipt o( the de%ision den#ing the

%&aim or a(ter the e*piration o( the ')/"da# period$7889$T9D -N$W9:;

.D2 $e%tion '').62 NI:6 o( '@@0

In %ase o( (u&& or partia& denia& 4# the 6I:< the ta*pa#ers re%ourse is to E&e

an appea& 4e(ore the 6T- within 1/ da#s (rom re%eipt o( the de%ision o( the

6I: However< i( a(ter the ')/"da# period the 6I: (ai&s to a%t on the

app&i%ation (or ta* re(undQ%redit< the remed# o( the ta*pa#er is to appea&the ina%tion o( the 6I: to 6T- within 1/ da#s .6I: v -i%hi Forging

6ompan# o( -sia< In%< 8: No

'?=?)1< O%to4er >< )/'/2

(>G) The s"bmission o% the re&"ired doc"ments within sixty (J) days %rom the 4ling

o% the protest is a$ailable only whereH (A) The taxpayer pre$io"sly 4led a Motion %or

3econsideration with the -I3 o#cial+ (-) The taxpayer pre$io"sly 4led a re&"est %or

reconsideration with the -I3 o#cial+

.62The ta*pa#er previous E&ed a reuest (or reinvestigation with the 3I:o%ia&

.D2The taxpayer pre$io"sly 4led an extension to 4le a protest with the -I3 o#cial.$7889$T9D -N$W9:;

.62 $e%tion ))?< NI:6 :636 v 6I:

(>>) The prescripti$e period %or the collection o% the de4ciency tax assessment willbe tolledH

(A) I% the taxpayer 4les a re&"est %or reconsideration with the Asst.

Commissioner+(-) I( the ta*pa#er E&es a reuest (or reinvestigation that is approved 4# the

6ommissioner o( Interna& :evenue (C) I% the taxpayer changes his address inthe 5hilippines that is comm"nicated to the -I3 o#cial+

(/) I% a warrant o% le$y is ser$ed "pon the taxpayerKs real property in Manila$7889$T9D -N$W9:;

.32 $e%tion ))1< NI:6 3PI v

6ommissioner< 8: No '1@01>< O%to4er'0< )//C

(>J) ?hich statement is correct The collection o% a de4ciency tax assessment by

distraint and le$yH


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.-2 Ma# 4e repeated< i( ne%essar#< unti& the (u&& amount due< in%&uding a&&

e*penses< is %o&&e%ted (-) M"st be done s"ccessi$ely, 4rst by distraint and then

by le$y+ (C) A"tomatically co$ers the ban deposits o% a delin&"ent taxpayer+

(/) May be done only once d"ring the taxable year.$7889$T9D -N$W9:;

.-2 $e%tion )'0< NI:6

(>L) The prescripti$e period to 4le a criminal action isH

(A)Ten (1) years %rom the date o% disco$ery o% the commission o% %ra"d or non74ling o%

tax ret"rn+(-) Ni$e (>) years %rom the date o% iss"ance o% the 4nal assessment notice+ (C) Three (D)

years %rom the 4ling o% the ann"al tax ret"rn+.D2 Five .C2 #ears (rom the %ommission o( the vio&ation o( the &aw< and i(

the same 4e not Jnown at the time< (rom the dis%over# thereo( and the

institution o( Gudi%ia& pro%eedings (or its investigation and punishment

$7889$T9D -N$W9:;.D2 $e%tion )?'< NI:6

(>) The acc"sedKs mere reliance on the representations made by his acco"ntant,

with deliberate re%"sal or a$oidance to $eri%y the contents o% his tax ret"rn and toin&"ire on its a"thenticity constit"tesH

(A) *imple negligence+(-) 8ross negligence+

(C) Wi&(u& 4&indness(/) Bxc"sable negligence.

$7889$T9D -N$W9:;.62 6T- 93 6rimina& 6ase No //>Peop&e v Kintanar< 8: No '@>1=/

(>) The ac&"ittal o% the acc"sed in the criminal action %or the %ail"re to 4le income

tax ret"rn and %ail"re to s"pply correct in%ormation will ha$e the %ollowing

conse&"enceH

(A)The CTA will a"tomatically exempt the acc"sed %rom any ci$il liability+(-)The CTA will still hold the taxpayer liable %or de4ciency income tax liability in all

cases, since preponderance o% e$idence is merely re&"ired %or tax cases+

(C) The 6T- wi&& impose %ivi& or ta* &ia4i&it# on i( there was a Ena&assessment noti%e issued 4# the 3I: against the a%%used in a%%ordan%e

with the pres%ri4ed pro%edures (or issuing assessments< whi%h was

presentedduring the tria&


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(/) The 6T- wi&& impose %ivi& or ta* &ia4i&it#< provided that a %omputation o(

the ta* &ia4i&it# is presented during the tria&

$7889$T9D -N$W9:;.62 or .D2 :epu4&i% vs Patanao< L"))1C>< u '< '@>0 .6astro v 6o&&e%tor

o( Interna& :evenue< L"')'0=< -pri& )>< '@>)2

(J>) The appraisal, assessment, le$y and collection o% real property tax shall beg"ided by the %ollowing principles. ?hich statement does T belong here

(A) 3eal property shall be appraised at its c"rrent and %air maret $al"e+(-) 3eal property shall be classi4ed %or assessment p"rposes on the basis o% its act"al

"se+

(C) 3eal property shall be assessed on the basis o% a "ni%orm classi4cation within each

local political s"bdi$ision+(/) The appraisa& and assessment o( rea& propert# sha&& 4e 4ased on audited

Enan%ia& statements o( the owner

$7889$T9D -N$W9:;.D2 $e%tion '@?< :- 0'>/

(L>) ?hich cases are appealable to the CTA

(A) /ecisions o% the *ecretary o% Ninance in cases in$ol$ing liability %or c"stoms d"ties,

sei9"re, detention or release o% property

aected+(-) De%isions o( the 6ommissioner o( 6ustoms in %ases invo&ving &ia4i&it# (or

%ustoms duties< sei5ure< detention or re&ease o( propert# ae%ted(C) /ecisions o% the Collector o% C"stoms in cases in$ol$ing liability %or c"stoms d"ties,

sei9"re, detention or release o% property aected+(/) /ecisions o% the -I3 Commissioner in cases in$ol$ing liability %or c"stoms d"ties,

sei9"re, detention or release o% property aected.$7889$T9D -N$W9:;

.32 $e%tion 0< :- @)?)

(1) Mia, a compensation income earner, 4led her income tax ret"rn %or the taxable

year =L on March D, =. n May =, =11, Mia recei$ed an assessment

notice and letter o% demand co$ering the taxable year =L b"t the postmar

on the en$elope shows April 1, =11. Oer ret"rn is not a %alse and %ra"d"lent

ret"rn. Can Mia raise the de%ense o% prescription.-2No The 1 #ear pres%riptive period started to run on -pri& 'C, == 4nal ad6"stment ret"rn %rom the -I3.

Mig"el Noods then 4led a re&"est %or rein$estigation together with the re&"isites"pporting doc"ments on April =>, =>. n "ne =, =>, the -I3 iss"ed a 4nal

assessment red"cing the amo"nt o% the tax demanded. *ince Mig"el Noods was

satis4ed with the red"ction, it did not do anything anymore. n April 1>, =1

the -I3 garnished the corporation:s ban deposits to answer %or the tax liability.

?as the -I3 action proper.-2es. The -I3 has > years %rom the 4ling o% the protest within which to

collect.

.32Yes The 3I: has C #ears (rom the issuan%e o( the Ena&

assessment within whi%h to %o&&e%t

.62o. The taxpayer did not apply %or a compromise.


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.D2o. ?itho"t the taxpayerKs prior a"thority, the -I3 action $iolated the-an /eposit *ecrecy ;aw.

(1) *panRex IntKl Inc. recei$ed a notice o% assessment %rom the -I3. It seasonably4led a protest with all the necessary s"pporting doc"ments b"t the -I3 %ailed to

act on the protest. Thirty days %rom the lapse o% 1 days %rom the 4ling o% its

protest, *panRex still has not ele$ated the matter to the CTA. ?hat remedy, i%any, can *panRex tae

.-2It may 4le a motion to admit appeal i% it co"ld pro$e that its %ail"re to

appeal was d"e to the negligence o% co"nsel.

.32 It may no longer appeal since there is no -I3 decision %rom which itco"ld appeal.

.62 It ma# wait (or the Ena& de%ision o( the 3I: on his protest and

appea& it to the 6T- within 1/ da#s (rom re%eipt o( su%h

de%ision

.D2one. Its right to appeal to the CTA has prescribed.(1) Anion, Inc. recei$ed a notice o% assessment and a letter %rom the -I3

demanding the payment o% 5D million pesos in de4ciency income taxes %or the

taxable year =. The 4nancial statements o% the company show that it has

been s"ering 4nancial re$erses %rom the year = "p to the present. Its assetposition shows that it co"ld pay only 5>,. which it oered as a

compromise to the -I3. ?hich among the %ollowing may the -I3 re&"ire to

enable it to enter into a compromise with Anion, Inc.

.-2Anion m"st show it has %aith%"lly paid taxes be%ore =.

.32Anion m"st promise to pay its de4ciency when 4nancially able.

.62-nion must waive its right to the se%re%# o( its 4anJ deposits

.D2Anion m"st immediately deposit the 5>,. with the -I3.

(=) ?hen a -I3 decision a#rming an assessment is appealed to the CTA, the

-I3:s power to garnish the taxpayer:s ban deposits

.-2 is s"spended to await the 4nality o% s"ch decision.

.32 is s"spended gi$en that the CTA can re$erse -I3 decisions when

pre6"dicial to the taxpayer.

.62 is not s"spended beca"se only 4nal decisions o% the -I3 are s"b6ect to

appeal.

.D2is not suspended sin%e the %ontinued e*isten%e o( government

depends on ta* revenues

(=1) eopardy assessment is a $alid gro"nd to compromise a tax liability.-2 in$ol$ing de4ciency income taxes only, b"t not %or other taxes.


20/22


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.324e%ause o( dou4t as to the va&idit# o( the assessment

.62 i% the compromise amo"nt does not exceed 1! o% the basic tax.

.D2only when there is an appro$al o% the ational B$al"ation -oard.

(==) As a general r"le, within what period m"st a taxpayer ele$ate to the Co"rt o%

Tax Appeals a denial o% his application %or re%"nd o% income tax o$erpayment.-2?ithin D days %rom receipt o% the CommissionerKs denial o% his

application %or re%"nd.

.32Within 1/ da#s (rom re%eipt o( the denia& whi%h must not e*%eed) #ears (rom pa#ment o( in%ome ta*

.62?ithin = years %rom payment o% the income taxes so"ght to bere%"nded.

.D2?ithin D days %rom receipt o% the denial or within two years %rom

payment.

(=D) A $iolation o% the tari and c"stoms laws is the %ail"re to.-2pay the c"stoms d"ties and taxes and to comply with the r"les on

c"stoms proced"res.

.32pa# the %ustoms duties and ta*es or to %omp with the ru&es on%ustoms pro%edures

.62pay the c"stoms d"ties and taxes.

.D2comply with the r"les on c"stoms proced"res.(=G) ?hat is the eect on the tax liability o% a taxpayer who does not protest an

assessment %or de4ciency taxes

.-2The taxpayer may appeal his liability to the CTA since the assessment is

a 4nal decision o% the Commissioner on the matter.

.32The -I3 co"ld already en%orce the collection o% the taxpayer:s liability i%it co"ld sec"re a"thority %rom the CTA.

.62The ta*pa#erRs &ia4i&it# 4e%omes E*ed and su4Ge%t to %o&&e%tionas the assessment 4e%omes Ena& and %o&&e%ti4&e

.D2The taxpayer:s liability remains s"spended %or 1 days %rom the

expiration o% the period to protest.

(=>) There is prima %acie e$idence o% a %alse or %ra"d"lent ret"rn where the.-2tax ret"rn was amended a%ter a notice o% assessment was iss"ed.

.32tax ret"rn was 4led beyond the reglementary period.

.62 taxpayer changed his address witho"t noti%ying the -I3.

.D2dedu%tions %&aimed e*%eed 4# 1/ the a%tua& dedu%tions

(=J) o action shall be taen by the -I3 on the taxpayerKs disp"ted iss"es "ntilthe taxpayer has paid the de4ciency taxes

.-2when the assessment was iss"ed against a %alse and %ra"d"lent ret"rn.


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.32 i% there was a %ail"re to pay the de4ciency tax within J days %rom -I3demand.

.62 i% the 3egional Trial Co"rt iss"es a writ o% preliminary in6"nction to en6oin

the -I3.

.D2attri4uta4&e to the undisputed issues in the assessment noti%e

(=L) Apparently the law does not pro$ide %or the re%"nd o% real property taxes thatha$e been collected as a res"lt o% an erroneo"s or illegal assessment by the

pro$incial or city assessor. ?hat sho"ld be done in s"ch instance to a$oid an

in6"stice

.-2Q"estion the legality o% the nore%"nd r"le be%ore the *"preme Co"rt.

.32Bnact a new ordinance amending the erroneo"s or illegal

assessment to correct the error.

.62$u4seuent adGustment in ta* %omputation and the app&i%ation

o( the e*%ess pa#ment to (uture rea& propert# ta* &ia4i&ities

.D25ass a new ordinance pro$iding %or the re%"nd o% real property taxes that

ha$e been erroneo"sly or illegally collected.(=) ?hat sho"ld the -I3 do when the prescripti$e period %or the assessment o% a

tax de4ciency is abo"t to prescribe b"t the taxpayer has not yet complied with

the -I3 re&"irements %or the prod"ction o% boos o% acco"nts and other records

to s"bstantiate the claimed ded"ctions, exemptions or credits

.-2Call the taxpayer to a con%erence to explain the delay.

.32 Immediately cond"ct an in$estigation o% the taxpayer:s acti$ities.

.62 Issue a Geopard# assessment %oup&ed with a &etter o( demand

(/) Iss"e a notice o% constr"cti$e distraint to protect go$ernment

interest.(=) he taxpayer seasonably 4led his protest together with all the s"pporting

doc"ments. It is already "ly D1, =11, or 1 days %rom s"bmission o% theprotest b"t the -I3 Commissioner has not yet decided his protest. /esiro"s o%

an early resol"tion o% his protested assessment, the taxpayer sho"ld 4le his

appeal to the Co"rt o% Tax Appeals not later than.-2A"g"st D1, =11.

.32A"g"st D, =11.

.62A"g"st 1>, =11.

.D2A"g"st 1, =11.

(D) ?hich o% the %ollowing are T "s"ally imposed when there is a tax amnesty

.-26ivi&< %rimina&< and administrative pena&ties

.32Ci$il and criminal penalties

.62Ci$il and administrati$e penalties

.D2Criminal and administrati$e penalties(D1) In Pperation Sandado,P the -I3 temporarily closed b"siness establishments,

incl"ding ew /ynasty Corporation that %ailed to comply with VAT reg"lations.

ew /ynasty contends that it sho"ld not be temporarily closed since it has a

$alid and existing VAT registration, it %aith%"lly iss"ed VAT receipts, and 4led theproper VAT ret"rns. The contention may be re6ected i% the -I3 in$estigation

re$eals that


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Page??o( )'Never Let The Odds Keep You From Pursuing What You Know In Your Heart You Were Meant To Do!"Lero# $at%he& Paige

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.-2the taxpayer has not been reg"larly 4ling its income tax ret"rns %or thepast G years.

.32the taxpayer deliberately 4led a %alse and %ra"d"lent ret"rn with

deliberate intention to e$ade taxes.

.62 the taxpayer "sed %alsi4ed doc"ments to s"pport its application %or

re%"nd o% taxes..D2there was an understatement o( ta*a4&e sa&es or re%eipts 4#

1/ or more (or the ta*a4&e uarter

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