BIR Ruling

July 19, 1977 Mrs. Rosario J. del Rosario Revenue Examiner Revenue District No. 29 5th Floor, Aurelio Bldg. Caloocan City M a d a m : This is in reply to your request for a ruling on the following query: "A certain decedent died in April, 1918. A judicial proceeding was instituted for the settlement of his estate. There is nothing in the court records to show that the estate was finally settled and adjudicated to the heirs. However, it is claimed that the heirs paid the inheritance tax to the Bureau of Internal Revenue in 1931 and that the payment of the tax incontrovertibly closed the judicial proceeding. In cases of this sort, does the payment of inheritance tax necessarily close and terminate the court proceedings? Pertinent portions of Act No. 2610 which took effect on July 1, 1916 and which was the inheritance tax law in force at the time of the death of the decedent adverted to in your query state: "xxx xxx xxx "Sec. 11. No judge shall authorize the executor or judicial administrator to deliver a distributive share to any party interested in the estate unless it shall appear this tax has been paid. "Sec. 12. The executor or judicial administrator who shall deliver to an heir, legatee, or donee, any real or personal property, credit right or franchise pertaining to an inheritance, subject to this tax, without its payment being shown, shall be punished by a fine of not more than five thousand pesos or imprisonment for not more than six months, or by both penalties. "Sec. 13. There shall not be registered in the registry of property any document transferring real property or real rights therein or any chattel mortgage, by way of gift mortis causa , legacy or inheritance, unless the payment of the tax fixed in this Act shall be shown. The violation of this provision shall be punished in accordance with the provisions of the next preceding section."' The above-quoted provisions do not mean that payment by the heirs of the inheritance tax necessarily closed the judicial proceedings for the settlement of the estate of the deceased person. If such is the case, then the closing of the proceedings will depend upon the heirs by the mere fact of proving the inheritance tax payment. This office believes that the above-quoted provisions merely enjoined the court not to close the proceedings without seeing to it that the corresponding inheritance tax has been paid. Very truly yours, (SGD) CONRADO P. DIAZ Deputy Commissioner of Internal Revenue TAN-D2567-D1025-A-2