2 CAPÍTULO : ARGUMENTACIÓN DE LA PROPUESTA
2.13 AJAX
2.13.1 Características de $.ajax ()
1. CIVIL CASES?
- YES, IN ANY STAGE OF THE PROCEEDING
- EXCEPT WHEN THE CIVIL CASE IS ALREADY FINAL AND EXECUTORY BECAUSE IT WILL BE VIOLATIVE OF THE SEPARATION OF POWERS
2. CRIMINAL CASES?
- YES, EXCEPT:
a. IF ALREADY FILED IN COURT (RTC) OR;
b. IF IT INVOLVES FRAUD
3. IF THE CORPORATION IS ALREADY DISSOLVED, CAN THE STOCKHOLDER BE HELD LIABLE TO PAY TAX?
- GENERAL RULE: NO - EXCEPT:
a. IF IT IS PROVEN THAT THE ASSETS OF THE COPORATION IS TAKEN BY ONE STOCKHOLDER OR;
b. IF THE STOCKHOLDER DID NOT PAY HIS UNPAID SUBSCRIPTION
Minimum Amount to be Compromised (Sec. 204) 1. If the ground is financial incapacity of the
taxpayer, the minimum shall not be less than 10% of the original assessment.
2. If based on other grounds, the minimum amount shall not be lower than 40% of the original assessment.
Q: Can it be lower than that prescribed by law?
A: As a rule, no. EXCEPT, if allowed by the evaluation board consisting of the:
a) commissioner; and b) deputy commissioner.
Instances when the Final Assessment becomes final and executor:
1. If the taxpayer did not file the protest on time
2. Failure to submit the supporting documents within the 60-day period 3. After the lapse of the 180-day period, you
did not file an appeal within the 30-day period to the CTA
4. An appeal was filed but made beyond the reglementary period to appeal
METHODS OF COLLECTION (SEC. 205) 1. Judicial Action
a. Civil b. Criminal
2. Administrative Action a. Distraint
b. Levy c. Tax lien
Q: Why is it important to know whether the final assessment is under normal or abnormal conditions?
A: It is important because of the requirement under §222. If the final assessment becomes final and executory, the government (BIR) can exercise the remedies under §205 in any order or simultaneously (§207). But it is not always the case, because the right of the government to collect is limited in case of abnormal assessment/collection under §222. Under the second option, the right of the government is limited to judicial action either civil or criminal.
Administrative remedies such as distraint, levy, or tax lien is not available under such condition.
Q: In distraint, levy or tax lien, is the 10 year period of collection applicable?
A: No, only the 5year period should apply.
Distraint Kinds:
1. Constructive (Sec. 206)
2. Distraint of Intangible (Sec. 208) 3. Actual (Sec. 207, par. a, and Sec. 209) 1. Constructive Distraint
► The distraining officer shall make a list of the personal property of the property to be distraint in the presence of the owner of the property or the person in possession of the property.
► The owner shall be requested to sign the receipt.
Q: What if the owner refuses to sign the receipt?
A: Sec. 206: The distraining officer shall require 2 individuals within the neighborhood with the warning that they should not allow the taxpayer to dispose, transfer, or sell the property subject of distraint.
Grounds for Constructive Distraint (Sec. 206):
1. The taxpayer intends to leave the Philippines
2. The taxpayer leaves the Philippines
3. The taxpayer ceases or retires from business
4. The taxpayer obstructs the collection of the tax.
► THESE GROUNDS ALSO ANSWER THE QUESTION: WHAT ARE THE TAXABLE PERIOD LESSER THAN 12 MONTHS?
2. Distraint of Intangible Property Limited to 3 Intangible Properties:
1. Shares of stocks 2. Bank accounts 3. Credits and debits Share of stocks
► Warrant of distraint furnished to the taxpayer or the officer of the corporation with the warning that the property is subject of distraint and it should not dispose of it.
Bank Accounts
► Warrant of distraint furnished to the taxpayer or the officer of the bank with the warning that the taxpayer should not be allowed to withdraw.
Debits and Credits
► Warrant of distraint furnished to the debtor and creditor
3. Actual Distraint
► Personal property shall be physically taken by the distraining officer.
► Within 10 days from the receipt of the warrant, a report of the distraint shall be submitted to the BIR (Sec. 207, par a last par.)
► The property subject of distraint shall be sold at a public auction EXCEPT bank accounts and debits and credits.
» Notice of sale shall be by posting in 2 conspicuous place, stating the date and the place of the sale (No publication requirement)
► Sec. 211: after the sale and within 2 days, a report shall be made to the BIR
Q: If the property sold is a personal property, is there a right of redemption?
A: NO. The rule is absolute.
Q: If the property is a personal property, is there a right of preemption?
A: SEC. 210: Before the scheduled sale, the taxpayer is allowed to recover the property by paying all the property by paying all the proper charges as well as the interest, cost and penalties.
During the Scheduled Auction Sale, 2 Things may happen:
1. There is bidder and the bid is enough 2. There is no bidder or there is a bidder but
the bid is not enough
Q: What is the relevance of knowing the difference?
A: 1. If there is a bidder and the bid is enough
» In case of insufficiency, there shall be further distraint to cover the liability. (§217)
» In case of excess, the excess shall be returned to the taxpayer.
2. If there is no bidder or the bid is not enough.
» It will be purchase by the government and the later sold in a public auction again (§212)
» In case of insufficiency, no further distraint, §217 applies only if there was a bidder.
» In case of excess, the excess shall not be returned to the taxpayer but shall be remitted to the national treasury.
Levy
► Other than the delinquent taxpayer, warrant of levy is served to the register of deeds having jurisdiction over the real property (Sec. 213)
► Within 10 days from the receipt of the warrant, a report of the levy shall be submitted to the BIR (Sec. 207 (b) last par) Notice of Sale in Public Auction:
1. Posting in 2 conspicuous places
2. Publication in newspaper of general circulation once a week for 3 consecutive weeks.
Q: Is there a right of pre emption?
A: Yes, §213.
Q: Is there a right of redemption?
A: Yes.
2 Things may happen in a Public Auction:
1. There is a bidder and the bid is enough 2. There is no bidder or the bid is not
enough
Q: What if there is no bidder or the bid is not enough?
A: Forfeiture shall be made (§215)
3 Definitions of Forfeiture under the Internal Revenue Code
1. Violation of Excise Tax Law (Sec. 224) 2. If there is no bidder or the bid is not
enough (Sec. 215)
3. The order of the Collector to confiscate imported commodities (Sec. 2313, TCC) Relevance of the Choice of Words:
► Under sec. 212, the law says “purchase”
► Under sec. 215, the law says “forfeiture”
» under 215: the real property shall be automatically registered in the name of the Government (forfeiture)
» under 212: the real property is not automatically registered in the name of the Government (purchase)
Q: If sold at a private sale, what is the requirement?
A: There must be an approval of the Secretary of Finance (§216)
Q: After sale, if there was deficiency?
A: There shall be no further levy, because §215 says that it shall be to the total satisfaction of the taxpayer.
Q: After sale, if there was an excess?
A: It shall not be returned to the taxpayer but shall be remitted to the national treasury.
Sec. 217: this is only true if there was no bidder or the bid was not enough because of the provisions of the Secs. 212, 215, and 216
Sec. 218: no court shall issue an injunction to restrain the collection of tax under this code Determine what kind of injunction is referred to here:
1. Prohibitory – referred in Sec. 218 because it restrains the collection of tax.
2. Mandatory
Q: Is the provision limited to “tax under this code”?
A: Limited to internal revenue taxes. EXCEPT:
CTA (Regular Court) → RA 1125 and 9282: CTA is authorized to issue injunction to restrain the collection of taxes or fees collected under other code.
Q: Is the rule of distraint or levy the same under local taxation?
A: Yes, local tax.
» §175 for DISTRAINT
» §176 for LEVY
Q: How about real property tax?
A: No, distraint is not authorized (§256, LGC), because the remedy is only Judicial Action and Levy.
Tax Lien
► Non payment of tax, the government has the right to claim a lien over the property of the taxpayer
1. NIRC – Sec. 219, NIRC 2. Local Tax – Sec. 173, NIRC
3. Real Property Tax – Sec. 257, NIRC Q: Supposed a parcel of land is about to be levied by the government, but the same is being foreclosed by the mortgagee, which of the 2 obligee, the government or the mortgagee shall be preferred?
A: §219, last portion: The government is the preferred one if the lien is annotated and recorded in the registry of deed. In the absence of annotation in the registry of deeds, the mortgagee is preferred.
Q: Do we have the same rule under Local Tax and Real Property Tax?
A: NO. Both §173 and §257, the government is always the preferred one. The lien can only be removed by payment of tax, interest and penalty.
Sec. 220: approving of filing an ordinary civil action for violation of the internal revenue code
► The approval must be made by the Commissioner of Internal Revenue
HIZON v. REPUBLIC (320 SCRA 574)
F: An ordinary civil action for violation of the tax code was filed in the city of San Fernando.
But the filing was only approved by the Revenue Regional Director of Central Luzon.
The plaintiff opposed the filing in the court on the ground that it should be approved by the Commissioner and the Revenue RD.
H: Sec. 220 should be read with Sec. 7 of the NIRC
» General Rule: powers and functions of the Commissioner may be delegated but not to a position lower than a Division Chief
» Under Sec. 7, there are powers which can not be delegated
a) Power to recommend to the Secretary of Finance to issue rules and regulation
b) Power to decide a case of fist impression
c) Power to enter into a compromise agreement
d) Power to assign BIR officer in the place of production subject to income tax
» Since the case does not fall under the prohibited delegation, the filing of the case is legal and tenable.
► Decision of the Commissioner of Internal Revenue (CIR) is appealable to CTA.
Q: When is a decision of the cir appealable to the Secretary of Finance?
A: §4, on matters of interpretation of tax laws.
SEC. 223: SUSPENSION OF THE RUNNING