BIR Ruling

April 14, 1998 Atty. Eladio Ch. Rubio Employees Village Lucena City S i r : This refers to your protest filed on August 5, 1985, for and in behalf of the late Pilar V. Pelino against the assessment of P1,068,465.05 as deficiency estate tax due on the transmission of the Estate to the legal heirs thereof for the year 1984. LexLib The protest is anchored on the contention that the deficiency estate taxes assessed against the Estate of the late Pilar V. Pelino, specifically the appraisal of the two (2) conjugal properties under the Torrens Title Nos. 304 and 305, should be based on the fair market value at the time of the death of the late Pilar V. Pelino. In reply, please be informed that in the desire to give you a chance to substantiate the defenses raised against our assessment, the Appellate Division, in a letter dated May 5, 1992 requested you to submit xerox copies of the comparative sales of real properties in the vicinity duly authenticated by the Register of Deeds stationed thereat to controvert the validity or incorrectness of the assessment. A reply letter dated May 28, 1992 was received by this Office requesting for a 30-day extension for the submission of the above documents from June 5, 1992 (end of the 10-day period specified). Sad to state, the said documents have not been submitted to this Office despite the substantial length of time that has already elapsed. Subsequently, a letter dated January 25, 1994 was sent allowing you the opportunity to either to avail of the compromise or abatement to settle the tax liabilities of the Estate under RMO # 1-88, pursuant to the provisions of Section 204 of the Tax Code before we finally resolve the case. Since then, no action has been undertaken up to the present. On this score, it must be remembered that, in taxation, the burden of proof is on the taxpayer to present evidence to show the incorrectness of the assessment and failure to do so is fatal in view of the well accepted principle that the assessment by the Commissioner is presumed prima facie correct unless controverted (Collector of Internal Revenue v. Bohol Land Transportation Company, L-13099, April 29, 1960). Based on the, aforequoted doctrine and on your failure and/or refusal to present evidences that may controvert our assessment, this Bureau finds no basis at all to disturb the finding that your client (Estate of Pilar V. Pelino) is liable to the assessed deficiency estate tax plus the penalties and interests that accrued thereon. PREMISES CONSIDERED, the protest is hereby denied. Consequently, you are requested to urge your client to pay the amount of P1,068,465.05 plus the penalties and interests that accrued thereon to the nearest Revenue District Office, within thirty (30) days from your receipt hereof, in order that this case may be closed and terminated. cdtech This constitutes the final decision of this Office on the matter. Very truly yours, (SGD.) LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue