BIR Ruling

April 29, 1998 Federico L. Farias #16 Villanueva St. Laoag City S i r : This refers to your letter dated April 14, 1993 requesting for the lifting of the Warrant of Distraint and/or Levy issued against you in connection with the assessment of this Office under Assessment Notice No. 1-5-01-017956 dated April 4, 1988, involving the total amount of P85,975.20 as deficiency income tax and compromise penalty for taxable year 1982. aisadc The protest is anchored on the contention that the right of the government to assess and collect the tax is already barred by prescription since the tax involved is for the year 1982 and our assessment was only issued and served on April 4, 1988, or beyond the five (5) year prescriptive period. In reply, please be informed that under Section 318 of the 1982 National Internal Revenue Code, internal-revenue taxes shall be assessed within five (5) years after the return was filed, and no proceeding in court without assessment for the collection of such taxes shall be begun after the expiration of such period. Records clearly show that although the income involved was for the taxable year 1982, your income tax return was filed on April 15, 1983 and our assessment was issued on April 4, 1988. Simple arithmetical computation could point to the fact that our assessment was issued 4 years, 11 months and 19 days after your income tax return was filed. Such being the case, said assessment was issued well within the five (5) year reglementary period. In view thereof, your request for the cancellation of our assessment and the lifting of the Warrant of Distraint and/or Levy issued against you is hereby DENIED. Consequently, you are hereby requested to pay the total amount of P85,975.20 as deficiency income tax and compromise penalty, exclusive of increments that may have accrued thereto, to the Revenue District Office No. 1, Laoag City, within fifteen (15) days from your receipt hereof in order that this case may be considered closed and terminated. LLjur This constitutes the final decision of this Office on the matter. Very truly yours, (SGD.) LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue