Reply to PAN and due process

Many taxpayers believe that, in a tax assessment conducted by the Bureau of Internal Revenue (BIR), even though the taxpayers submit a reply to the Preliminary Assessment Notice (PAN), a Final Assessment Notice (FAN) or Formal Letter of Demand (FLD) will be issued against them by the BIR without considering the arguments laid down in the reply to PAN. Some have the impression that the FAN is already drafted or prepared ahead without waiting for the taxpayer’s reply to PAN. This is due to the observation that most of the time, the contents of the FAN are basically the same to that of the PAN.