Reply to PAN and due process

 Economy
Jun 262017
 

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.

The right to recover versus the right to assess

 Economy
Aug 052015
 

Vigilantibus sed non dormientibus jura subveniunt. The law aids the vigilant, not those who slumber on their rights. Last June, no less than the Court of Tax Appeals (CTA) reminded us of the truth and application of this time-honored doctrine of law in an action for recovery of erroneously paid taxes (CTA Case No. 8147 dated 22 October 2014 as amended on June 10, 2015). In this case, the taxpayer was issued a Preliminary Assessment Notice (PAN) in connection with a tax investigation covering the taxable year 2002. Due to the execution of four consecutive waivers, the PAN was issued only in 2008, or five years after the filing of the tax return.