BIR Ruling [DA-054-05]

February 14, 2005 BIR RULING [DA-054-05] 90 (C) & 91 (B) DA 298-2004 dtd June 1, 2004 Mr. Enrique De Zuzuarregui No. 51 Quezon Avenue Quezon City S i r : This refers to your undated letter requesting an extension of time to file the corresponding Estate Tax Return and an extension of two (2) years to pay the estate tax thereon, without incurring the penalties for delinquency. It is represented that the late Pacita Javier died intestate on August 17, 2004 at #51 Quezon Avenue, Quezon City; that the request for extension of time to file the estate tax return and pay the same is impelled by the fact that the properties of the decedent are still being collated and inventoried; that on the basis of your tentative calculations, the estate tax will amount to P7 million, more or less; that considering the fact that the decedent did not leave sufficient cash, the undersigned heir would be put into undue hardship to meet the deadline for the payment of the tax; that to generate enough funds for the purpose, some of the properties of the estate will have to be encumbered and/or sold; that considering the present slump in the property market, it will take some time to generate the needed funds. In reply thereto, please be informed that under Section 90(B) and (C) of the Tax Code of 1997, estate tax return is required to be filed within six (6) months from the decedent's death, and in meritorious cases, a reasonable extension not exceeding thirty (30) days for filing the return may be granted by the Commissioner of Internal Revenue. The payment of the estate tax or any part thereof shall be made upon the filing of the return or on such date as fixed if an extension is granted by the Commissioner, but in no case to exceed five (5) years in case the estate is settled through the courts, or two (2) years in case the estate is settled extrajudicially pursuant to Section 91(B) of the Tax Code of 1997. TCaAHI Based on the aforestated justifiable reason, your request for an extension of two (2) years reckoned from February 17, 2005 within which to pay the estate tax is hereby granted pursuant to Section 91(B) of the Tax Code of 1997. On the other hand, under Section 90(C) of the Tax Code, only thirty (30) days is granted as an extension of the period within which to file the estate tax return, thus, considering that decedent died on August 17, 2004, said period is about to lapse. Such being the case, you are hereby directed to immediately file the estate tax return for the estate of Pacita Javier in order to stop the running of the interest for late filing thereof. Moreover, in view of the above favorable action to your request for an extension of two (2) years within which to pay the estate tax, this Office has decided to forego the imposition of the surcharge and penalties on the estate tax due on the transmission of the estate of Pacita Javier. However, it shall be understood that the estate shall be liable for the corresponding interest that have accrued thereon up to the time of payment of the aforesaid estate tax pursuant to Section 249 of the Tax Code of 1997. (BIR Ruling No. DA 260-2000 dated June 9, 2000) 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 considered null and void. Very truly yours, (SGD.) JOSE MARIO C. BUAG Deputy Commissioner Legal and Inspection Group