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An audit program is prepared for the purpose of prescribing the policy guidelines for selecting tax returns that will be subjected to investigation by the following audit offices: Audit Divisions under the Large Taxpayers Service and Enforcement Service in the National Office, and Revenue District Offices, Assessment Divisions and Regional Investigation Divisions under the Revenue Regions. Based on the selection criteria, which may vary from year to year, the audit offices select tax returns that match the selection criteria prescribed in the audit program. In the absence of an annual audit program, the Commissioner of Internal Revenue has the authority to make an assessment pursuant to Section 6(A) of the NIRC, as amended.
At the end of the one-day seminar, the participants will be able to articulate and apply
knowledge on
· Identify the taxpayer requests reinvestigation;
· Determine if there is a need to verify the taxpayer's compliance with withholding tax
laws and regulations;
· Understand the taxpayer's capital gains tax liabilities must be verified; and
· Determine the Commissioner chooses to exercise his power under Section 5(B) of the
· Obtain information from other persons, in which case, another or
separate examination and inspection may be made.
Agenda
- GENERAL AUDIT PROCEDURES AND DOCUMENTATION
Christina Barroga1. The audit process begin
2. What is an eLA?
3. Taxpayer’s books of accounts and records be subjected to examination and inspection
4. Particular taxpayer selected for audit
5. Who issues the eLA?
6. Notice for Informal Conference
8. Within what time period must an assessment be made?
9. Preliminary Assessment Notice (PAN)
10. Under what instances is PAN no longer required?
11. Formal Letter of Demand/Final Assessment Notice (FLD/FAN
12. Required of a taxpayer who is being audited
13. What is the recourse of a taxpayer who cannot submit the documents being required of him within the prescribed period
14. Waiver of the Defense of Prescription under the Statute of Limitations of the NIRC
15. A taxpayer has the right to contest an assessment and may do so by filing:
• response to the PAN within 15 days from receipt of the PAN;
• protest to the FLD/FAN within 30 days from date of receipt of the FLD/FAN either through a Request for Reconsideration or a Request for Reinvestigation.
16. Characteristics of a valid protest
17. In the event that the protest is denied in whole or in part, or is not acted upon by the Commissioner’s duly authorized representative
18. Recourse is open to a Taxpayer if his request for reconsideration (administrative appeal) is denied by the Commissioner
19. If the Taxpayer is not satisfied with the CTA’s decision, can he appeal the decision to a higher court?
20. Can a taxpayer claim a refund or tax credit for erroneously or illegally collected taxes?
21. If a taxpayer has filed a claim for refund and the Bureau has yet to render a decision on this claim, can the taxpayer elevate his claim to the CTA?
22. Within what period must collection be made?
Christina Barroga
Manager at Motech Dimasalang
- Lunch Break
- REMEDIES OF THE BUREAU IN THE AUDIT PROCESS AND COLLECTION OF DELINQUENT ACCOUNTS
Christina Barroga1. What means are available to the Bureau to compel a Taxpayer to produce his books of accounts and other records?
2. Course of action shall the Bureau take if the Taxpayer fails to comply with the Subpoena Duces Tecum
3. Government for collection of delinquent accounts
a) Distraint of Personal Property belonging to the taxpayer;
b) Levy upon real property and on the interest in or rights to real property;
c) Civil Action; d) Tax Lien (Sec. 219, NIRC);
d) Forfeiture (Sec. 224, NIRC); and f) Criminal Action.
4. Distraint of Personal Property
a) Salaries of the taxpayer;
b) Deposits with the bank;
c) Stocks and bonds from any private or government offices that safe-keep stocks and bond certificates e.g. Stock Brokers, Philippine Stock Exchange (PSE), the Bureau of Treasury (BTR) etc.; 11
d) Rental income of the taxpayer from the lessee/tenant; and
e) Trade and other receivables from customers and other debtors.
4. “Levy on Real Property
5. What is the period within which to enforce the collection of delinquent accounts?
6. What remedies are available to the taxpayer in the settlement of his tax liabilities?
a) Payment in full including delinquency penalties;
b) Payment in installment including delinquency penalties;
c) Payment through compromise settlement (Revenue Regulations No. 30-2002); and
d) Payment through abatement of penalties (Revenue Regulations No. 13-2001).
7. Cases which may be compromised a) Delinquent Accounts
b) Cases under Administrative Protest after issuance of the Final Assessment Notice and the cases are still pending in the Regional Offices, Revenue District Offices, Legal Service, Large Taxpayers Service (LTS) and Collection Service
c) Civil Tax cases being disputed before the courts
d) Collection Cases filed in Courts
e) Criminal Violations, other than those already filed in court or those involving criminal fraud
8. What are the cases which may not be compromised?
a) Withholding Tax Cases, unless applicant invokes provisions of Law that cast doubt on the Taxpayer’s obligation to withhold 12
b) Delinquent Accounts with duly approved schedule of installment payment
c) Criminal Tax Fraud Cases confirmed as such by the CIR or his duly authorized representative
d) Criminal violations already filed in Court
e) Cases where final reports of reinvestigation or reconsideration have been submitted resulting to the reduction of the original assessment and the Taxpayer is agreeable to such findings
f) Cases which become final and executory after final judgement of a court, where compromise is requested on the ground of doubtful validity
g) Estate Tax cases where compromise is requested on the ground of financial incapacity (Section 2, RR 30-2002)
9. Basis for acceptance for compromise settlement
10. Financial incapacity
11. What are the instances when the CIR may abate or cancel tax liabilities?
a) Tax or any portion thereof appears to be unjustly or excessively assessed.
b) Administrative and collection cost involved do not justify the amount to be collected.
c) Taxpayer is dead, leaving no distrainable/leviable property.
d) Collection of the delinquent account has been prescribed.
12. Exceptions as to Period of Limitation of Assessment and Collection of Taxes.Christina Barroga
Manager at Motech Dimasalang
