BIR Ruling [DA-119-99]

February 26, 1999 BIR RULING [DA-119-99] Ms. Vilia Najera Villanueva 8 Calle Real, Real Village Tandang Sora, Quezon City M a d a m : This refers to your letter dated November 16, 1997 requesting as administrator of the Estate of Emigdio Nazareno Najera who died a resident of Agno, Pangasinan on December 1, 1986 and the Estate of Rosalina Navarrete Najera, who died a resident also of Agno, Pangasinan on May 16, 1997 for an extension of time to pay their respective estate taxes. LLcd It is represented that on November 8, 1997, a Deed of Extrajudicial Settlement was executed among the heirs of the decedent; and that you are making this request for the purpose of securing a tax clearance in order that the property can be transferred in the name of the heirs. In reply thereto, please be informed that pursuant to Sections 248 and 249 of the Tax Code as amended (also Sections 248 and 249 of the Tax Code of 1997), viz: "SEC. 248. Civil Penalties . "(a) There shall be imposed in addition to the tax required to be paid a penalty equivalent to twenty five percent (25%) of the amount due, in the following cases: 1) failure to file any return required under the provision of the Tax Code or regulations on the date prescribed; 2) . . .; and 3) failure to pay the tax within the time prescribed for its payment. "SEC. 249. Interest . "(a) In General . There shall be assessed and collected on any unpaid amount of tax, interest at the rate of twenty percent (20%) per annum, or such higher rate as may be prescribed by rules and regulations, from the date prescribed for payment until the amount is fully paid. Accordingly, since the late Emigdio Nazareno Najera died on December 1, 1986 and no estate tax return has as yet been filed and no estate tax has as yet been paid, hence, the estate of the late Emigdio Nazareno Najera is liable to the surcharge, penalties and interest due thereon from the date of his death. However, pursuant to Section 91 (B) of the Tax Code of 1997, viz: "SEC. 91(B). Extension of Time . When the Commissioner finds that the payment on the due date of the estate tax or any part thereof would impose undue 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 (5) years, in case the estate is settled through the courts, or two (2) years in case the estate is settled extrajudicially. . . .." In view thereof, since the late Rosalina Navarette Najera died on May 16, 1997, this Office hereby grants your request for an extension of time to pay the estate tax due for a period of two (2) years from the date of her death, or as soon as the estate is settled extrajudicially. It is understood, however, that the estate of the late Rosalina Navarette Najera shall be liable to the corresponding interest that have accrued thereon up to the time of payment of the estate tax due on the transmission of the said estate to the heirs pursuant to Section 249 of the Tax Code of 1997. 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. cdll Very truly yours, (SGD.) BEETHOVEN L. RUALO Commissioner of Internal Revenue