The assessment shall be formalized through the issuance of the formal assessment notice (FAN). If the taxing authority still finds the taxpayer liable for deficiency tax or the taxpayer is unable to sufficiently address the items of the alleged tax discrepancy, the PAN may be issued within 10 days from the conclusion of the Discussion. If the taxpayer requires more time to prepare and present the documents, the taxpayer has 30 days from receipt of NoD to submit such supporting documents. It is during the Discussion of Discrepancy that the taxpayer is given the opportunity to present his side of the case and explain the discrepancy found during the investigation of the revenue officer assigned and submit documents to support the explanation or arguments.ĭuring the Discussion of Discrepancy, the taxpayer should present all necessary documents to support his explanation. Under RR 22-2020, the taxpayer and the BIR have 30 days from taxpayer’s receipt of the NoD to discuss the BIR’s findings of alleged discrepancies in tax payment (Discussion of Discrepancy). The NoD replaced the Notice of Informal Conference (NIC), which was reinstated on 22 January 2018 by RR 7-2018 after it was removed on 2013 in RR 18-2013. The most notable change introduced by RR 22-2020 is the requirement for the issuance of a Notice of Discrepancy (NoD) before the Preliminary Assessment Notice (PAN) is issued. This was subsequently amended by Revenue Regulations 18-2013, 7-2018, and, most recently, 22-2020, which was published on 17 September 2020. Pursuant to the mandate of the Tax Code, the Department of Finance issued Revenue Regulations 12-1999, which prescribes the procedure for tax assessment. The process should provide the taxpayer the right to discuss, and protest or appeal, the findings of the BIR, in the course of the tax investigation.
DUE PROCESS OF LAW CODE
Section 228 of the Tax Code requires that the assessment must be made in writing and should state the law and facts on which the assessment is based.įurther, the BIR should observe proper procedure in the issuance of the assessment. The Supreme Court has recognized that, between the power of the State to tax and an individual’s right to due process, the scale favors the right of the taxpayer to due process (Commissioner of Internal Revenue vs Fitness by Design Inc., GR 215957, 9 November 2016).Ĭonsistent with the constitutionally mandated right to due process of taxpayers, the National Internal Revenue Code (Tax Code) sets substantial and procedural requirements for the Bureau of Internal Revenue (BIR) to observe in performing tax investigations. While taxation is the lifeblood of the government, the power of the State to collect tax must be balanced with the taxpayer’s right to substantial and procedural due process.
DUE PROCESS OF LAW TRIAL
This includes granting all persons a right to fair trial and effective remedy. The right to due process guarantees that the State must respect individual rights by setting limitations on laws and legal proceedings. As enshrined in the Philippine 1987 Constitution, no person shall be deprived of life, liberty or property without due process of law.
The right to due process is crucial for the protection of human rights and is core to every democratic society. Published 2 November 2020, The Daily Tribune
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