BIR eases rules on bank deposits of decedents
Published Jul 2, 2019 11:36 am
By Jun Ramirez
The Bureau of Internal Revenue (BIR) said heirs can now withdraw the bank deposit of a deceased relative provided the bank will withhold and remit to the bureau six percent of the total withdrawal.
Bureau of Internal Revenue (MANILA BULLETIN)
The withheld tax cannot be refunded but can be credited to the estate tax due, the BIR added.
The BIR came out with the clarification in Revenue Regulations (RR) 8-2019 amending Section 10 of RR 12-2018 which implemented the estate tax amnesty law.
It was previously difficult for the heirs to withdraw the bank deposits of the decedent because of the stringent BIR requirements.
The heirs then were required to file estate tax return declaring all the properties of the decedent and paying the corresponding taxes.
If the bank deposits were not included in the enumeration in the estate return the BIR would not issue clearance for the withdrawal of the bank deposits.
The estate tax amnesty rate of six percent on the value of the decedent's properties may be paid in installments within two years upon the submission of the estate return.
Observe due process
Meanwhile, the Supreme Court (SC) cautioned the BIR against violating taxpayers’ right to due process in efforts to collect taxes.
In a recent resolution, the SC denied the petition filed by the BIR which challenged the ruling of the Court of Tax Appeals’ (CTA) that declared cancelled and withdrawn the April 12, 2013 final assessment notice (FAN) issued by the tax agency against Roca Security and Investigation Agency, Inc.
The SC said the CTA in its en banc decision of March 7, 2018 did not commit any error in its ruling.
“As correctly held by the CTA en banc, the Final Assessment Notice (FAN) issued by the Commissioner of Internal Revenue (CIR) is void as it violates respondent's (Roca Security) right to due process,” the SC said.
It explained that “Section 2282 of the National Internal Revenue Code (NIRC) gives the taxpayer being assessed a period of sixty (60) days from the date of filing a protest assailing the Preliminary Assessment Notice (PAN) within which to submit relevant supporting documents.”
The SC also said: “In this case, the respondent filed its protest on April 18, 2013. It had sixty (60) days from that date, or until June 17, 2013, to present its relevant documents to support its protest against the PAN.
“Clearly, the FAN issued by the CIR on April 12, 2013 and received by respondent only on April 19, 2013 violated the latter's right to due process as the latter had only one (1) day (instead of 60 days) to present its relevant documents in support of its protest.
“Besides, the 60-day period to protest alluded to in Section 228 of the NIRC refers to one made against the PAN and not the FAN as the CIR insists, as only upon expiration of the said period does a contested assessment ‘become final.’
“Therefore, the CTA en banc properly found the CIR to have violated the statutory guidelines in terms of affording respondent taxpayer the right to due process.”
The SC resolution did not contain the details of Roca Security’s alleged tax deficiencies for IT and IAET. (With a report from Rey G. Panaligan)
Bureau of Internal Revenue (MANILA BULLETIN)
The withheld tax cannot be refunded but can be credited to the estate tax due, the BIR added.
The BIR came out with the clarification in Revenue Regulations (RR) 8-2019 amending Section 10 of RR 12-2018 which implemented the estate tax amnesty law.
It was previously difficult for the heirs to withdraw the bank deposits of the decedent because of the stringent BIR requirements.
The heirs then were required to file estate tax return declaring all the properties of the decedent and paying the corresponding taxes.
If the bank deposits were not included in the enumeration in the estate return the BIR would not issue clearance for the withdrawal of the bank deposits.
The estate tax amnesty rate of six percent on the value of the decedent's properties may be paid in installments within two years upon the submission of the estate return.
Observe due process
Meanwhile, the Supreme Court (SC) cautioned the BIR against violating taxpayers’ right to due process in efforts to collect taxes.
In a recent resolution, the SC denied the petition filed by the BIR which challenged the ruling of the Court of Tax Appeals’ (CTA) that declared cancelled and withdrawn the April 12, 2013 final assessment notice (FAN) issued by the tax agency against Roca Security and Investigation Agency, Inc.
The SC said the CTA in its en banc decision of March 7, 2018 did not commit any error in its ruling.
“As correctly held by the CTA en banc, the Final Assessment Notice (FAN) issued by the Commissioner of Internal Revenue (CIR) is void as it violates respondent's (Roca Security) right to due process,” the SC said.
It explained that “Section 2282 of the National Internal Revenue Code (NIRC) gives the taxpayer being assessed a period of sixty (60) days from the date of filing a protest assailing the Preliminary Assessment Notice (PAN) within which to submit relevant supporting documents.”
The SC also said: “In this case, the respondent filed its protest on April 18, 2013. It had sixty (60) days from that date, or until June 17, 2013, to present its relevant documents to support its protest against the PAN.
“Clearly, the FAN issued by the CIR on April 12, 2013 and received by respondent only on April 19, 2013 violated the latter's right to due process as the latter had only one (1) day (instead of 60 days) to present its relevant documents in support of its protest.
“Besides, the 60-day period to protest alluded to in Section 228 of the NIRC refers to one made against the PAN and not the FAN as the CIR insists, as only upon expiration of the said period does a contested assessment ‘become final.’
“Therefore, the CTA en banc properly found the CIR to have violated the statutory guidelines in terms of affording respondent taxpayer the right to due process.”
The SC resolution did not contain the details of Roca Security’s alleged tax deficiencies for IT and IAET. (With a report from Rey G. Panaligan)