1

Mandamus would lie to compel the Commissioner of Internal Revenue to issue a tax
assessment against a taxpayer.
2
Amount spent to improve the property so as to increase its value or prolong its life is deductible
from gross income.
3
An alien doing business in the Philippines is taxed by using the schedular income tax rates
applicable to resident Filipino citizens.
4
13th month pay and other benefits are part of the gross income for income tax purposes.
5
Under the National Internal Revenue Code, any taxpayer whose property has been placed
under constructive distraint, who sells, transfers, encumbers or in any way disposes of said
property or any part thereof without the knowledge and consent of the Commissioner of Internal
Revenue shall be held criminally liable.
6
Issuance of Notice of discrepancy to the taxpayer is not mandatory in the tax audit of Internal
Revenue Tax compliance.
7
On May 15, 2020, CCC, Inc. received the Final Decision on Disputed Assessment issued by the
Commissioner of Internal Revenue (CIR) dismissing the protest of AAA, Inc. and affirming the
assessment against said corporation. On June 10, 2020, AAA, Inc. filed a Petition for Review
with the Court of Tax Appeals (CTA) in division. On July 31, 2022, AAA, Inc. received a copy of
the Decision dated July 22, 2022 of the CTA division dismissing its Petition. AAA, Inc.
immediately filed a Petition for Review with the CTA en banc on August 6, 2022. Is the
immediate appeal by AAA, Inc. to the CTA en banc of the adverse Decision of the CTA division
the proper remedy?

8
It is necessary to determine whether a particular imposition is a tax or a license fee because
some limitations apply only to one and not the other, and for the reason that exemption from
taxes may not include exemption from license fee.
9
Voluntary cancellation or forgiveness of a debt does not give rise to a deductible loss. It is not a
deductible contribution from income nor considered a bad debt.
10
There is no tax by silence, but where the law levies a tax, so also must the tax exemption be
explicit in the law.
11
Tax laws are criminal in nature.
12
Congress can abolish the power of the local government units to tax.
 13
When, in the view of the CTA on the appealed case, the collection may jeopardize the interest
of the Government and/or the taxpayer, it may suspend the said collection and require the
taxpayer either to deposit the amount claimed or to file a surety bond.
14
As a general rule, the government is immune from taxes only with respect to transactions or
activities done in line with the performance of its proprietary functions.
15
A business license may be required for the sale or distribution of printed materials like
newspapers.
16
The theory behind the exercise of the power to tax emanates from necessity, without taxes,
government cannot fulfill its mandate of promoting the general welfare and well being of the
people.
17
Because of the lifeblood doctrine, injunction generally does not lie against the collection of
taxes.
18
The burden of proving the legality and correctness of the deduction claimed rests both upon the
taxpayer and the BIR.

19
A Filipino nurse working in London bought plane tickets there and sends them to her parents in
the Philippines so that they could visit her abroad. The ticket sales are not part of the Gross
Philippine Billings for income tax purposes.

20
In taxpayer’s suit, the plaintiff is affected by the expenditure of public funds.

21
A taxpayer’s failure to the real property assessment before the Local Board of Assessment
Appeals renders the assessment of the local assessor final. Executor and demandable.

22

Allowable deductions are amounts or expenses allowed by law to be subtracted from gross
income to arrive at the taxable income.

23
Shifting the burden of taxation means transferring the economic burden from the one who pays
the tax to another. As a general rule, only the burden of indirect taxes may be shifted while the
incidence remains with the statutory taxpayer.

24
Tax exemption refers to the liberal act of grace on the part of the state whereby the liabilities of
the taxpayer are forgiven or condoned.

25 (5 points)
In its final adjustment return for the 2020 taxable year, ABC Corp. had excess tax credits arising
from its over-withholding of income payments. It opted to carry over the excess tax credits to the
following year. Subsequently, ABC Corp. changed its mind and applied for a refund of the
excess tax credits. Will the claim for refund prosper?

26
All the three inherent powers of the State are necessary attributes of sovereign, resting upon
necessity.

27
If a taxpayer is earning both compensation income and income from business or practice of
profession, the income tax for the business or practice of profession shall be computed
separately from the income tax on compensation income.

28
“Lifeblood is merely a doctrine while due process is a Constitutional right. There should be no
contest between them. Thus, even as the inevitability and indispensability of taxation is
conceded, it is a requirement in all democratic regimes that taxation power be exercised
reasonably and in accordance with the prescribed procedure.

29
Rice subsidy of P2,000 or 1 sack (50 kg) rice per month but not more than P2,000 in value is
considered de minimis benefit.

30
If the compromise settlements are within the jurisdiction of the BIR National Office, it shall be
subject to the approval of the Commissioner of Internal Revenue upon the recommendation of
the National Evaluation Board.

31
Local taxes shall be collected within 5 years from the date of assessment by administrative or
judicial action.

32
Stock dividends are generally exempt from income tax.
 33
If case the Commissioner of Internal Revenue failed to act on the disputed assessment within
the 180-day period from date of submission of documents, a taxpayer can either: (1) file a
petition for review with the CTA within 15 days after the expiration of the 180-day period; or (2)
await the final decision of the Commissioner on the disputed assessments and appeal such final
decision to the CTA within 15 days after receipt of a copy of such decision.

34
Partners in General Professional Partnerships have the tax status of self-employed individuals
engaged in the practice of their profession in the partnership formed. As such, they may claim
the itemized deductions or elect the OSD.

35
Payment for police protection is illegal thus not allowed as deduction from gross income as it is
compensation given by the taxpayer to the police for the performance by the latter of the
functions required of them to be rendered by law.

36
Taxation is superior to police power in relation to the non-impairment clause.

37
.Machinery of non-stock, non-profit educational institutions used actually, directly, and
exclusively for educational purposes is not subject to real property tax

38
Tax assessments by tax examiners are presumed correct and made in good faith. The taxpayer
has the duty to prove otherwise.

39
If regulation is the primary purpose, the fact that revenue is incidentally obtained does not make
it a tax.

40
At present, the income tax rates applicable to resident citizens, non resident citizens and
resident aliens are graduated ranging between 15% to 35% of their taxable income.

41
Under the Comprehensive Recovery and Tax Incentives for Enterprise (CREATE) law, a ruling
is no longer required for the taxpayer to enjoy the tax free exchange provided for in section 40
of the National Internal Revenue Code, as amended.

42
If the taxpayer has filed a claim for refund of income tax but there is inaction on the part of the
BIR and the 2-year period is about to lapse, the taxpayer must file an ???

43
Compromise is different from tax exemption, therefore, may be interpreted liberally in favor of
the taxpayer.

44
A person may be imprisoned for non-payment of taxes.

45
Assessments made beyond the prescriptive period are still binding to the taxpayer.

46
Generally, the collection of internal revenue taxes may be stopped through injunction.

47
A Domestic corporation with no business income outside the Philippines is not subject to MCIT.

48
Tax exemption is non-transferable or cannot be assigned or transferred.

49
Theoretical justice or equity is a taxation principle which means that the taxes collected by the
government must be sufficient to defray the governmental expenditures.

50
The new corporate income tax rate is 27.5% pursuant to Republic Act No. 11354, otherwise
known as the Comprehensive Recovery and Tax Incentives for Enterprise (CREATE) law which
took effect on July 1, 2020.

51
Non-resident Foreign Corporations are subject to the Mimimum Corporate Income Tax (MCIT)
at a reduced rate of 1.5% of their gross income derived from the Philippines until June 30, 2023
pursuant to Republic Act No. 11354, otherwise known as the Comprehensive Recovery and Tax
Incentives for Enterprise (CREATE) law.

52
A tax exemption is a general pardon to taxpayers or intentional overlooking by the State of its
authority to impose penalties on persons otherwise guilty of evasion or violation of a revenue or
tax law.
 53
The CTA has ample authority to issue injunctive writs to restrain the collection of tax and to
even dispense with the deposit of the amount claimed or the filing of the required bond,
whenever the method employed by the CIR in the collection of tax jeopardizes the interests of a
taxpayer for being patently in violation of the law.

54
Under the NIRC, tax cases involving fraud may be compromised if not yet filed in court.

55
Non-stock, non-profit private educational institutions may be subject to real property tax.

56
Generally, prizes won in contest where the winner deliberately participated actively hoping to
win are subject to income tax.

57
The real property tax is computed based on its assessed value.

58
A VAT invoice is the seller's best proof of the sale of goods or services to the buyer, while a
VAT receipt is the buyer's best evidence of the payment of goods or services received from the
seller.

59
Prizes and awards made primarily in recognition of religious, charitable, scientific, educational,
artistic, literary, or civic achievement are exempt from income tax provided the recipient is
required to render substantial service as a condition to receiving the award.

60
Lease of residential units at P15,000 per unit per month with a total gross receipts of more than
P10,000,000.00 shall be subject to VAT.

61
In local tax collection cases, the amount of the claim determines where or which court the case
should be filed.

62
A province or city may resort to distraint as an administrative remedy to collect real property
taxes from the delinquent taxpayers.
63
Separation pay received by the employee is subject to income tax regardless of the nature of
the termination of employment.

64
If the taxpayer has filed a claim for refund of income tax but there is inaction on the part of the
BIR and the 2-year period is about to lapse, the taxpayer must file an appeal with the Court of
Tax Appeals because such inaction is deemed a denial of the claim.

65
The power to tax cannot be delegated by the legislature and the collection of such taxes may
not also be delegated.

66
The capital gains tax from sale of real property is 7.5% of the gross selling price or fair market
value whichever is higher.

67
When the thief or embezzler is known the proceeds of swindling, embezzlement, theft or
robbery is not taxable, because all right, title and interest in the money rests with the victim and
to collect a tax from the culprit would give the government an unjustified preference as to the
part of the money that rightfully and completely belongs to the victim.

68
The optional standard deduction is allowed to individual taxpayers, corporations and general
professional partnerships.

69
A citizen of the Philippines who establishes to the satisfaction of the Commissioner of Internal
Revenue the fact of his physical presence abroad with a definite intention to reside therein is
considered a non-resident Filipino citizen, hence he shall be taxed on his income derived from
all sources.

70
Personal, living and family expenses are allowable deductions from the gross income of
individual taxpayers.

71
Income of foreign governments and its agencies in loans, stocks, bonds or other domestic
securities and interests on local banks are taxable.

72
The power of taxation is purely legislative in character thus cannot be delegated to the
executive and judicial branches of government without running afoul to the theory of separation
of powers.

73 (5 points)
On March 27, 2021, the Bureau of Internal Revenue (BIR) issued a notice of assessment
against Red Water Industries Inc. (RWI), a domestic corporation, informing the latter of its
alleged deficiency corporate income tax for the year 2018. On April 20, 2021, RWI filed a letter
protest before the BIR contesting said assessment and demanding that the same be cancelled
or set aside.
However, on May 19, 2022, that is, after more than a year from the filing of the letter protest, the
BIR informed RWI that the latter's letter protest was denied on the ground that the assessment
had already become final, executory and demandable. The BIR reasoned that its failure to
decide the case within 180 days from filing of the letter protest should have prompted RWI to
seek recourse before the Court of Tax Appeals (CTA) by filing a petition for review within thirty
(30) days after the expiration of the 180-day period as mandated by the provisions of the last
paragraph of Section 228 of the National Internal Revenue Code (NIRC). Accordingly, RWI's
failure to file a petition for review before the CTA rendered the assessment final, executory and
demandable. Is the contention of the BIR correct? Explain.

74
Co-owners of an inherited income generating property shall be subject to income tax separately
and individually based on their respective distributive share of the income.

75
It is well within the power of the Sangguniang Panlalawigan of a province to enact an ordinance
providing for additional levy on real property tax for the special education fund at the rate of
0.5% rather than at 1%. The local government code allows the imposition of a tax at a different
rate provided it does not exceed the limit set by law.

76
The discretion of the legislature in imposing taxes extends to the mode, method or kind of tax.

77
If a taxpayer has a line of business subject to VAT and another line of business not subject to
VAT, he can claim all the input taxes on purchases clearly attributable to his business
operations subject to VAT while those that are clearly attributable to his Non-VAT business
operations can only be claimed as part of the cost deductible from his gross income.

78
If the Taxpayer avails of Compromise based on doubtful validity of the assessment, the
Commissioner of Internal Revenue may look into his bank deposits as a condition for the
approval of the compromise application.
 79
A tax is not a debt for the reason that a tax does not depend upon the consent of the taxpayer
and there is no express or implied contract to pay taxes.

80
A void Final Decision on Disputed Assessment (FDDA) issued by the Commissioner of Internal
Revenue is tantamount to inaction by the CIR which may still be appealed to the CTA.

81
An individual taxpayer, except non-resident aliens not engaged in trade or business in the
Philippines, may avail of the Optional Standard Deduction of 40% of his gross income.

82
The Congress may delegate to the President the fixing of tariff rates, import and export quotas,
tonnage and wharfage dues, and other duties or imposts. This is in line with the "flexible tariff
clause" of the Constitution.

83
Local taxes, fees, or charges shall be assessed within 3 years from the date they became due.

84
Taxes are burdens which must be endured by the taxpayer and should not be unduly exacted or
presumed to go beyond what the law expressly and clearly declares. Thus, tax laws shall be
interpreted liberally in favor of the Government.

85
If a manager gets cash advances from his company (interest-free) for his family needs, this
transaction is covered by the fringe benefit tax.

86
The taxpayer must file a written protest with the local treasurer within 30 days from the receipt of
the notice of assessment, otherwise it shall become final and executory.

87
Tax exemptions granted by way of legislative franchise may be revoked without violating the
non-impairment clause under the Constitution.

88
If the taxpayer does not deduct within the year expenses incurred for that year, he cannot
deduct them from the income of the next or any succeeding year.

89
Since the power to tax is legislative in character, only Congress can grant exemption from local
taxes.

90
For MCIT purposes, passive incomes which have been subjected to final taxes at source shall
not form part of the gross income.

91
All revenues and assets of non-stock, non-profit private educational institutions used actually,
directly and exclusively for educational purposes shall be exempt from taxes and duties
provided that the source of the revenues is from activities that are related to their primary
purpose.

92
Proprietary educational institutions are subject to income tax at the rate of 10% of their gross
income with respect to their revenues from unrelated transactions.

93
A citizen of the Philippines who works and derives income from abroad and whose employment
thereat requires him to be physically present abroad at least 183 days during the taxable year is
considered a non-resident citizen.

94
Only the registered owner of the property is deemed the taxpayer who is entitled to a notice of
delinquency and other proceedings relative to the tax sale.

95
The CIR may delegate the power to assess taxes to his subordinates.

96
The Final Decision on Disputed Assessment (FDDA) issued by the Commissioner of Internal
Revenue is rendered void by the failure to state the facts and the law, rules and regulations, or
jurisprudence on which the proposed assessment is based.

97
For income tax computation, donor’s taxes paid by the taxpayer are deductible from his gross
income.

98
If the passive income has been subjected to tax, it should still be included in the computation of
income subject to the normal income tax.

99
Taxation is a high prerogative of sovereignty whose relinquishment is never presumed. Taxes
are what we pay for civilized society.

100
The public purpose of a tax may legally exist even if the motive which impelled the legislature to
impose the tax was to favor one industry over another.

101
The taxes collected by the government must be used exclusively for public purpose.

102
Sale of real property classified as capital asset located abroad by a resident Filipino citizen is
subject to capital gains tax.

103
The monthly pension from SSS or GSIS of any retiree is not subject to income tax and he is not
required to file an income tax return even if he deposits his pension benefits with a bank and he
earns interest income.

104
Request for reconsideration refers to a plea for a re-evaluation of an assessment on the basis of
existing records without need of additional evidence. It may involve both a of fact or of law or
both.

105
Passive income is subject to the normal income tax rate.

106
The act of assessing and collecting taxes is administrative in character, and therefore can be
delegated.

107
Mere allowance for bad debts is allowed as deduction from gross income.

108
For an assessment to be valid, it must be issued by the BIR and received by the taxpayer within
3 years from the due date for filing or the actual date of filing of the return, whichever come later

109
Injunctions can be issued in the case of local taxes.

110
The doctrine on “Equitable Recoupment” is applicable in the Philippines.
111
Administrative feasibility is a limitation to taxation power.

112
When the Employer’s Convenience Rule applies, the benefit to the employee is taxable.

113
A final demand letter for payment of delinquent taxes may be considered a decision on a
disputed or protested assessment. Thus the taxpayer can file an appeal with the Supreme
Court.

114
Life insurance proceeds shall be subject to income tax if the beneficiary designated has been
made revocable.

115
Justice Malcolm said: "The power to tax includes the power to destroy" which Justice Holmes
rejected by saying that "the power to tax does not include the power to destroy as long as this
court sits."

116
An action to collect on a bond used to secure the payment of taxes is not a tax collection case,
but rather a simple case for enforcement of a contractual liability; hence, it is not under the
jurisdiction of the CTA.

117
For purposes of claiming allowable deductions, an expense is accrued when (1) the obligation
to pay is already fixed; (2) the amount can be determined with reasonable accuracy and (3) it is
already knowable or the taxpayer can reasonably be expected to have known at the closing of
its books for the taxable year.

118
Taxation is not only a power that is exercised in order to raise revenue for the support of the
government. Taxes may also be imposed for a regulatory purpose.

119
Non-observance of the basic principles of a sound tax system will not render the tax impositions
by the taxing authority invalid, except to the extent that specific Constitutional or statutory
limitations are impaired.

120
Intercorporate dividends are not subject to income tax.
 121
When a taxpayer does not protest an assessment issued by the BIR, he may appeal such
assessment to the CTA.

122
Fringe benefit tax shall be treated as a final income tax on the employee that shall be withheld
and paid or remitted by the employer.

123
Life insurance proceeds shall be part of the gross estate regardless of who is the beneficiary
designated in the policy.

124
International comity is a restriction on the power of taxation whereby the tax laws of the State
imposing the taxes are effective and enforceable only within its territorial boundaries.

125
Double taxation is an inherent limitation to the power to tax of the State

126
A person could earn compensation, business, profession and passive income at the same time.