BIR Ruling [DA-039-01]

March 21, 2001 BIR RULING [DA-039-01] Sec. 90 (B) and (c) 210-99 Ms . Iluminada D . Sibayan 51-A Legaspi Street, Project 4 Quezon City 1109 M a d a m : This refers to your letter dated January 19, 2001 requesting for an extension of time to file the estate tax return of the Estate of the late Alejo P. Sibayan and an extension of two years within which to pay the tax. It is represented that the decedent, Mr. Alejo P. Sibayan died on August 18, 2000 a resident of Quezon City; that the deadline to file the estate tax return is on February 18, 2001; and that the heirs are encountering difficulties in securing the necessary documents to make an inventory of the estate. In reply, please be informed as follows: (a) For the purpose of determining the estate tax provided for in Section 84 of the Tax Code of 1997, the estate tax return shall be filed within six (6) months from the decedent's death. (Section 90(B), ibid .). Moreover, the Commissioner of Internal Revenue shall have the authority to grant, in meritorious cases, a reasonable extension not exceeding thirty days for filing the return. (Section 90(C), ibid .). Accordingly and in view of the aforesaid justifiable reasons, your request for an extension of thirty (30) days from February 18, 2001 to March 20, 2001 within which to file the estate tax return is hereby granted. (b) The estate tax imposed by Section 84 of the Tax Code of 1997 shall be paid at the time the return is filed by the executor, administrator, or the heirs (Section 91(A) of the Tax Code of 1997). However, when the Commissioner of Internal Revenue finds that the payment on the due date would impose hardship upon the estate or any of the heirs, he may extend the time for payment of such tax' or any part thereof not to exceed five years, in case the estate is settled through the courts, or two years in case the estate is settled extrajudicially. In such case, the amount in respect of which the extension is granted shall be paid on or before the date of the expiration of the period of the extension, and the running of the statute of limitation for assessment as provided in Section 203 of the Tax Code of 1997 shall be suspended for the period for any such extension. (Section 91 (B) of the Tax Code of 1997). Such being the case, and since the payment of estate tax on the due date would impose undue hardship upon the heirs because of the current financial difficulties that the heirs are encountering, your request for an extension of two years counted from the time of filing of the return is hereby granted. (c) However, it shall be understood that the said estate shall be liable to the corresponding interest that have accrued thereon up to the time of filing of the return and payment of the estate tax due on the transmission of the said estate to the heirs. (BIR Ruling No. 066-98 dated May 21, 1998). DacTEH A copy of this letter should be attached to the estate tax return of the decedent. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation it will be disclosed that the facts are different, then this ruling shall be deemed null and void. Very truly yours, Commissioner of Internal Revenue By: (SGD.) MILAGROS V. REGALADO Acting Assistant Commissioner Legal Service