CIVIL REMEDIES FOR COLLECTION OF

REVENUES

AMADO P. JIMENEZ, CPA, MBM

CIVIL REMEDIES FOR COLLECTION OF REVENUES• WHAT • WHY• WHEN• HOW

CIVIL REMEDIES FOR COLLECTION OF REVENUES

• JUDICIAL REMEDY

• ADMINISTRATIVE REMEDY

REAL PROPERTY TAXATION

Administrative Remedy• LEVY AND SALE OF REAL PROPERTY

JUDICIAL REMEDY• FILING OF CASE AGAINST THE TAXPAYER DELINQUENT IN PAYMENT OF REAL PROPERTY TAX

LOCAL GOVERNMENT TAXATION

A. Administrative Remedy

• Distraint and sale of personal property

• LEVY AND SALE OF REAL PROPERTY

B. Judicial Remedy• FILING OF CASE AGAINST THE TAXPAYER DELINQUENT IN PAYMENT OF REAL PROPERTY TAX

CIVIL REMEDIES FOR COLLECTION OF REVENUES

WHY

V. BENEFITS from TAX SALE

• 1. Enforced collection• 2. Deterrent to future tax delinquency

• 3. Increased collection of revenue

• 4. Compliance with the law ( Section 259 , RA 7160)

CIVIL REMEDIES FOR COLLECTION OF REVENUES• Section 259. Penalty for Failure to Issue and Execute Warrant- Without prejudice to criminal prosecution under the Revised Penal Code and other applicable laws, any local treasurer or his deputy who fails to issue or execute the warrant of levy within one (1) year from the time becomes delinquent or within thirty (30) days from the date of the issuance thereof, or who is found guilty of abusing the exercise thereof in an administrative or judicial proceeding shall be dismissed from the service

CIVIL REMEDIES FOR COLLECTION OF REVENUES

HOW

ADMINISTRATIVE REMEDY on Distraint of Personal Property

COVERAGE:

• Goods,• Chattels, or effects, and • Other personal property of whatever character,Including Stocks and Other securities, • Debts, Credits, Bank accounts, and• Interest in and rights to personal property

ADMINISTRATIVE REMEDY ON DISTRAINT OF PERSONAL PROPERTY

Requisites and Process

• Certified List of Delinquency• Demand letters• Notice of Delinquency• Warrant of Distraint and Seizure

DISTRAINT OF PERSONAL PROPERTY

• Accounting of Distrained Goods• Publication of Sale of Distrained goods• Released of Distrained property• Procedure of Sale• Disposition of Proceeds

• Properties Exempt from Distraint

PROPERTIES EXEMPT FROM DISTRAINT

• Tools and implements necessarily used by the delinquent taxpayer in his trade or business

• One (1) horse, cow, carabao, or other beast of burden, such as the delinquent taxpayer may select, and necessarily used by him in his ordinary occupation

PROPERTIES EXEMPT FROM DISTRAINT

• Household furniture and utensils necessary for housekeeping and used for that purpose by the delinquent taxpayer, such as he may select, of a value not exceeding Ten thousand pesos (P10,000.)

• Provisions, including crops, actually provided for individual or family use sufficient for four (4) months

PROPERTIES EXEMPT FROM DISTRAINT

• The professional libraries of doctors, engineers, lawyers and judges

• One (1) fishing boat and net, not exceeding the total value of Ten thousand pesos (P10,000.), by the lawful use of which a fisherman earns his livelihood, and

• Any material or article forming part of a house or improvement of any real property.

REQUISITES AND PROCESS ( LEVY AND SALE OF REAL PROPERTY)

• • Certified List of Delinquency• Demand letters• Notice of Delinquency• Warrant of Levy• Report of Levy to Sanggunian• Advertisement and Notice of Sale

REQUISITES AND PROCESS ( LEVY AND SALE OF REAL PROPERTY)

• Sale at Public Auction• Certificate of sale to Purchaser• Report of Sale to Sanggunian• Certificate of Redemption to Owner• Final Bill of Sale to Purchaser

JUDICIAL REMEDYRequisites and Process

• Certified List of Delinquency• Demand letters• Notice of Delinquency• Certified Statement of Delinquency• Filing of Case before the Prosecutor

Statutory Procedure in the Civil Remedy of DISTRAINT OF PERSONAL PROPERTY ( per Section 175 RA 7160)

A. UPON FAILURE TO PAY ANY LOCAL TAX, FEE, OR CHARGE AT THE TIME REQUIRED

• ISSUE AUTHENTICATED CERTIFICATE showing fact of delinquency and amount of tax , fee, or charge and penalty due and cost of seizure

• Certificate serves as WARRANT FOR DISTRAINT OF PERSONAL PROPERTY subject to taxpayer’s right to claim exemption

B. UPON SIEZURE OF PERSONAL PROPERTY

• Warrant officer shall make an account of goods, chattels or effects taken:

• Sign the account

B. UPON SIEZURE OF PERSONAL PROPERTY

• Leave the account or list with owner or person from whom possession of goods are taken or at dwelling or place of business of that person and with someone of suitable age and discretion

• The list or account includes unpaid tax, fee, or charges and a note of time and place of sale of seized goods

C. NOT LESS THAN Twenty ( 20) DAYS AFTER NOTICE TO OWNER OR POSSESSOR OF DISTRAINED PROPERTY

Posting of NOTICE OF SALE in:

a. Three (3) public and conspicuous places andb. in the Office of the Mayor/Governor

The Notice specifies time and place of sale and articles distrained

D. AS SPECIFIED IN THE NOTICE

• Sale at place as specified in the NOTICE

• Sale to highest bidder for cash• Return to owner of distrained good the balance over and above what is required to pay LGU claimed

• Submit report of sale of distrained goods to highest bidder

• Submit report on good not sold within 120 days from date of distraint

*Unsold distrained goods are considered sold to LGU for the amount of assessment made thereon by a Committee on Appraisal

COMMITTEE ON APPRAISAL

Composition of Committee on Appraisal:

- Local Treasurer as chairman- Representative of COA as member- Local Assessor as member

E. WITHIN 5 DAYS AFTER SALE

Submit Report of Sale to Mayor/Governor

ll. The Process of Judicial Action ( per Section 183 RA 7160)

A. Local taxes shall be assessed

within 5 years from date they become due ( Section 194)

• Assessed the taxpayer of local taxes, fees, or charges due

B. When taxes, fees, or charges become delinquent

Furnish the Provincial/City/Municipal Legal Officer of:

• Certified Statement of Delinquency

• Exact address of defendant where he may be served w/ summons

B. Within 15days after receipt ( Article 357 (a) IRR RA 7160)

Provincial/City/Municipal Legal Officer files Civil Action against the delinquent

taxpayer

Judicial Action

When the delinquent taxes due does not exceed

P 10,000,• File the civil action before Municipal/City Trial Court

Judicial Action

• When the delinquent taxes due exceed P 10,000

• File the Civil Action before Regional Trial Court

lll. The Process of Levy and SALE at PUBLIC AUCTION OF REAL PROPERTY

A. When real property tax become delinquent

( Section 254)

1. Post NOTICE OF DELINQUENCY in:

• Main entrance of provincial capitol,

• Main entrance of municipal hall, and in

• Publicly accessible and conspicuous place in each barangay of LGU concerned

When real property tax become delinquent ( Section 254)

2. Publish NOTICE OF DELINQUENCY• Once a week for 2 consecutive weeks in a newspaper of general circulation in the province, city or municipality where the property is located

• After expiration of the time required to pay the real property tax , or On or before, or simultaneous with the institution of civil action ( Section 258)

Issue WARRANT OF LEVY which is to be Mailed or Served to:

• Delinquent real property owner,

• Person having legal interest therein, or

• Occupant or administrator ( if owner cannot be located)

Issue WARRANT OF LEVY which is to be Mailed or Served to:

• Provincial /Municipal Assessor to annotate levy on tax Declaration

• Register of Deeds to annotate levy on Transfer Certificate of Title (TCT)

Within 30 days after service of Warrant of Levy ( Section 260)

• Posting of Notice of Sale

• Posting in • Main entrance of provincial capitol• Main entrance of municipal/city hall• Publicly accessible and conspicuous place in barangay where property is located

2. Submit written Report of levy to:

• Sanggunian ten (10) days after receipt of warrant by property owner or person having legal interest in the property

Publication of NOTICE OF SALE

• Once a week for 2 weeks in a newspaper of general circulation in a province, city or municipality where property is located

•  Specify amount of delinquent tax, interest due and expenses of sale, date and place of sale, name of owner/person having legal interest therein , and description of property to be sold

As specified in the NOTICE OF SALE

Conduct Public Auction Sale at: • Main entrance of provincial capitol

• Main entrance of municipal hall• Other place as specified in the NOTICE OF SALE

Immediately after sale

• Issue CERTIFICATE OF SALE TO PURCHASER

• Purchaser shall Register Certificate of Sale with Register of Deeds ( after one year from date of registration, file in court to consolidate ownership over the property)

• Note : under PD 464 , redemption by owner lapses only one (1) from date of registration with RD while under RA 7160, one year from date of sale

Within 30 days after Public Auction Sale

• Report of Sale to Sanggunian

Anytime after the Public Auction Sale but before expiration of redemption period

( one year after date of sale)

• If redemption fee is paid by owner, issue CERTIFICATE OF REDEMPTION

• If the owner failed to pay the redemption fee, issue FINAL DEED TO PURCHASER

lv. PROPERTIES ATTRACTING PURCHASERS

• Titled Land• Larger area• Lower price• Location of property• Status of ownership and delinquency

Vl. COMMON PROBLEMS

1. Preparation and submission of certified list of Delinquency ( must be updated)

2. Monitoring tax payments ( Demand letter w/ notation to owner to report discrepancy in record of tax payment; failure to do shall presume record correct)

3. Securing copy of Tax Declaration

Vl. COMMON PROBLEMS

4. Securing copy of Transfer Certificate of Title (TCT)

5. Threat from affected taxpayers 6. Cost of sale7. Transferring TCT of Forfeited property

8. Resale of forfeited Property

END OF PRESENTATION