BIR Ruling

September 16, 1976 MEMORANDUM FOR: Mr. Lauro D. Abrahan Assistant Commissioner In connection with your Memorandum dated August 26, 1976, stated hereunder is the question as well as the answer thereto: QUERY : "Is the 5% surcharge imposed under Section 51(e)(3) of the National Internal Revenue Code computed on the basic deficiency tax alone or on the total amount of deficiency tax and interest indicated in the assessment notice?" ANSWER: Section 51(e)(3) of the Tax Code provides: "(3) Surcharge . If any amount of tax included in the notice and demand from the Commissioner of Internal Revenue is not paid in full within 30 days after such notice and demand, there shall be collected in addition to the interest prescribed herein and in paragraph (d) above and as part of the tax a surcharge of 5% of the amount of tax unpaid ." (Emphasis supplied) Under the above-quoted provision, the 5% surcharge is computed on the basic deficiency tax alone which is "the amount of tax unpaid." Respectfully submitted: PRISCILLA R. GONZALES Revenue Service Chief (Legal) TAN-1258-814-1