BIR Ruling [DA-217-97]

June 5, 1997 BIR RULING [DA-217-97] Ms. Susan S. Navarro School of Economics University of the Philippines Diliman, Quezon City M a d a m : This refers to your letter dated April 28, 1997, requesting on behalf of the Estate of the late Miguela Luz S. Navarro for: 1) an extension of five (5) years within which to pay the estate tax due thereon; and 2) the waiver of all the penalties, interest and surcharges incident to the delinquency in the payment of said estate tax. cdtech It is represented that at the time of the death of your mother on June 13, 1993, her properties were under the jurisdiction of the Regional Trial Court, Branch 151, Pasig City, in Special Proceedings No. 744-J entitled "In the Matter of Guardianship of the Incompetent Luz S. Navarro" and of which you are a co-guardian in the said proceedings; that on August 23, 1993 (two months after your mother's death), you filed a Motion to Disburse Funds to pay your mother's estate tax but was denied by the court; and that you cannot as yet determine your mother's net estate for purposes of paying the estate tax for the following reasons: (1) part of your mother's estate is her share in the estate of your deceased father, Prof. E. R. Navarro, whose estate is still under the jurisdiction of the Regional Trial Court of Bataan in Special Proceedings No. 2804 entitled "Intestate Estate of the Deceased Emiliano R. Navarro"; (2) that at the time of your mother's death, there were unconsummated contracts to sell on installment basis involving some of her properties; and (3) that judicial expenses that will involved therein which are allowable deductions are still unknown. In reply, please be informed that in view of the aforestated justifiable reasons, your request for an extension of five (5) years from June 13, 1993 or until June 13, 1998 within which to pay the estate tax due on the transmission of the estates of your mother is hereby granted, pursuant to Section 84(b) of the Tax Code, as amended, which provides: "Extension of time. When the Commissioner of Internal Revenue finds that the payment on the due date of the estate tax or of any part thereof would impose undue hardships 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 . . . . In such case, the amount in respect of which the extension is granted shall be paid on or before the date of expiration of the period of the extension, and the running of the statute of the limitation for assessment as provided in section 203 of this code shall be suspended for the period of any such extension." Moreover, your request for waiver of the surcharges and penalties for late payment of the estate tax due on your mother's estate is hereby granted, but you are liable to pay interest of 20% per annum from the date prescribed for payment until the amount is fully paid, pursuant Sec. 249(a) of the tax Code, as amended. 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, and/or any of the requirements imposed in this letter are not complied with, then this ruling shall be considered null and void. cdt Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue