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1. Issuance of LOA with checklist for submission of documents
*1st Notice – 10 CD after receipt of LOA and checklist – signed by RO and/or GS
If ignored by TP
2nd & Final Notice – 10 CD after receipt of 1st notice – signed by Head of Office
If ignored by TP, Head of Office shall request for Subpoena Duces Tecum (SDT) from Legal office within 10 CD
after receipt of 2nd & Final Notice
SDT is issued to compel TP to submit documents which should be the basis of assessment and to avoid Jeopardy
Assessment (just to comply with the prescriptive period)
If still ignored or incomplete submission, RO will work with the action lawyer for documenting/gathering
evidence/s for criminal prosecution of individual concerned. The action lawyer shall prepare a “Letter of
Complaint” to the Office of the Prosecutor for violation of Section 266 of NIRC “Failure to Obey Summons”
together with the supporting documents and affidavit. For Corp, Section 256 ”Penal Liabilities of Corporation”
(Individual - 5k-10k and 1year-2 years); (Corp – 50k-100k per act)
RO will use “Best Evidence Obtainable” rule for the assessment. (RMC 23-00 – a.) assessment based on estimate,
50% rule, in the absence of receipt to prove actual amount of expense deduction) – based on Mariano Zamora
court case), b.) Network method of investigation
2. Submission of documents
3. Examination of records
4. Notice of Discrepancy (ND) (old-Notice of Informal Conference (NIC))
5. Present evidence or explain side – w/in 5 days from receipt of ND
* if TP needed more time, may submit documents w/in 30 days from receipt of ND
6. Preliminary Assessment Notice (PAN) – w/in 10 days after conclusion of Discussion
7. TP within 15 days upon receipt of PAN must reply
Exception to issuance of PAN, thus directly to FAN-FLD:
i. Finding is a result of mathematical error
ii. Discrepancy b/w tax withheld and remitted by withholding agent
iii. TP claiming a tax refund/ tax credit of excess CWT who carried over/applied the same amount claimed
against their estimated tax liabilities
iv. Unpaid excise taxes
v. Tax exempt importations transferred to non-tax exempt persons
8. BIR will issue Final Assessment Notice – Formal Letter of Demand (FAN-FLD) if TP fails to respond w/in 15 days. If TP
responds, then 15 days will be reckoned from TP’s filing submission of response.
*arguments made by TP in PAN must be carefully evaluated by BIR before issuance of FAN-FLD. There are
already a lot of court cases that says the TP’s right to due process is violated if the arguments were not considered, and
thus, FAN-FLD is VOID.
The FLD-FAN should have a definite period for payment and definite amount of tax liability, otherwise VOID
9. TP w/in 30 days (non-extendable) upon receipt of FAN-FLD must submit protest
*otherwise, the assessment becomes final and executory and demandable and thus no request for
reconsideration or reinvestigation will be granted.
*Protest letter must not be pro-forma and should include TP’s argument and supporting legal basis
*a.) Request for reinvestigation – basis is newly discovered or additional evidence; may also involve a question
of fact or of law or both
- interrupts the running of statute of limitation (5 years) and starts again when request is denied and
ends when FDDA is issued
- there are documents which cannot be submitted w/in the 30-day period
- additional supporting documents maybe submitted w/in 60 days from submission of protest letter
b.) Request for reconsideration – plea for reevaluation of an assessment on the basis of existing records w/out
need for additional evidence/documents
10. If TP protests, CIR issues Final Decision on Disputed Assessment (FDDA)
11. If TP is satisfied with FDDA, pay the assessment,
if not,
a. protest with Court of Tax Appeals (CTA) w/in 30 days from receipt of FDDA
b. elevate his protest through request for reconsideration to CIR w/in 30 days from receipt of FDDA
c. Appeal to CTA w/in 30 days after expiration of 180 day, counted from date of filing of protest (if
reconsideration) or from date of submission of required documents w/in 60 days from date of filing of the protest (if
reinvestigation)
Options of TP if decision of CIR in “b” above is adverse,
i. appeal to the CTA w/in 30 days from date of receipt of CIR’s final decision
ii. appeal to the CTA w/in 30 days after the expiration of 180 day period counted from date of filing of the
request for reconsideration
if there is INACTION on the protested assessment w/in the 180 day period, TP can,
i. File a petition for review with the CTA w/in 30 days after the expiration of the 180 day period; or
ii. await the final decision of the CIR on the disputed assessment and appeal such decision to CTA w/in 30 days
after receipt of copy of such decision.
