BIR Ruling [DA-070-96]

February 14, 1996 BIR RULING [DA-070-96] 3rd Indorsement Returned to the Regional Director, Revenue Region No. 6, Manila, the within docket bearing on the estate tax case of the deceased spouses BENJAMIN I. GUANSING and EMILIA R. GUANSING. The records of this case show that Benjamin I. Guansing died on June 3, 1968 a resident of 2249 Karapatan St., Sta. Cruz, Manila while Emilia Guansing died on October 25, 1991 a resident of Ontario, Canada; that Edna G. Cabaltica, American citizen and Emilita R. Guansing, Canadian citizen, the only surviving heirs of the deceased spouses, executed a Deed of Extrajudicial Settlement with Donation on January 9 and 23, 1995, whereby they adjudicated to themselves a parcel of land left by their deceased parents including the improvement existing thereon; that said parcel of land consist of 235.30 square meters located at Karapatan St., Sta. Cruz, Manila covered by Transfer Certificate of Title No. 91960 of the Register of Deeds of Manila; that the said instrument also provides that the said property, including improvements, has been donated to the Philippine Annual Conference of the United Methodist Church, a non-stock and non-profit religious corporation duly organized and registered in accordance with the laws of the Philippines with office address at 900 United Nations Avenue, Manila; and that the donated property will be used solely and exclusively for religious purposes for which the donee corporation has been organized. The instant case has been investigated by Revenue District No. 31 which ascertained that the basic estate tax due from the estate of Benjamin I. Guansing amounts to P492.85 while the basic estate tax due from the estate of Emilia Guansing amounts to P95,743.95. The donee corporation has decided, and has in fact paid the said basic estate taxes in the total amount of P95,743.95; but requested, thru its counsel, Atty. Balbino Gatdula, Jr., that the 25% surcharge, interest and compromise penalties be waived under Section 204 of the Tax Code for the following reasons: 1. That the heirs who should pay the estate tax are already Canadian and U.S. citizens who permanently reside abroad; 2. That the donee corporation, being a non-profit and non-stock religious corporation, has only limited funds for the settlement of this case; but as a gesture of goodwill and desire to immediately settle this case, has decided to pay and has in fact paid, the basic tax in the total amount of P95,743.95; on November 16, 1995 as shown by the machine validation of the payment in the Estate Tax Return; and 3. That the tax assessed appears to be excessive and confiscatory, the same having been determined in accordance with the rates of estate tax prescribed by Section 77 of the Tax Code prior to its amendment by Republic Act No. 7499. In view of the foregoing justifiable reasons, the request for the waiver of the surcharge, interest and penalties is hereby granted. Accordingly, the corresponding clearance required for the registration of the Deed of Extrajudicial Settlement with Donation may be issued by that Office. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue