BIR Ruling [DA-235-05]

May 26, 2005 BIR RULING [DA-235-05] DA-399-2003 dtd. 11/06/03 Ms. Veronica E. Lim No. 41 5th Street (B. Serrano) Grace Park, Caloocan City 1400 M a d a m : This refers to your letter dated May 10, 2005, requesting in behalf of the Estate of the late BENJAMIN V. LIM, extension of time to file and pay the corresponding estate tax due on the transmission by the said estate of its properties in favor of the heirs pursuant to Section 91 (B) of the Tax Code of 1997. It is represented that BENJAMIN V. LIM died on November 24, 2004; that the reasons for which you are seeking extension of time to file and pay the tax are that you are encountering difficulty in collating the properties and in data/vital document gathering coupled by the fact that the estate has no cash to pay the estate tax and other fees since it consisted mostly of real property and further the heirs are living in different places and have not finally agreed on the settlement. In reply, please be informed that pursuant to Section 91 (B) of the Tax Code of 1997, which provides, viz : "SEC. 91. Payment of Tax . xxx xxx xxx "(B) Extension of Time when the Commissioner finds that the payment on the due date of the estate tax or of 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 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 Limitations for assessment as provided in Section 203 of this Code shall be suspended for the period of any such extension. SCEDaT xxx xxx xxx "If an extension is granted, the Commissioner may require the executor, or administrator, or beneficiary, as the case may be, to furnish a bond in such amount, not exceeding double the amount of the tax and with such sureties as the Commissioner deems necessary, conditioned upon the payment of the said tax in accordance with the terms of the extension." xxx xxx xxx Accordingly, in view of the aforesaid justifiable reasons, your request for extension of 2 years from May 24, 2005 to May 24, 2007, within which to pay the estate tax due thereon is hereby granted. It shall be understood, however, that the estate 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 by the said estate of the properties in favor of the heirs pursuant to Section 249 of the Tax Code of 1997. (BIR Ruling No. DA-285-98 dated June 29, 1998) Very truly yours, (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service