BIR Ruling [DA-251-00]

May 26, 2000 BIR RULING [DA-251-00] Ms. Edna C. Samonte 150 Southeast Narra Street Marikina Heights Marikina City M a d a m : This refers to your letter dated May 2, 2000 requesting this Office to issue an authority in your favor, to withdraw half of the amount deposited from the joint savings account maintained by you and the deceased Carmen E. Manalo with the Land Bank of the Philippines (LBP), Cavite Branch, pending the probate of her last will and testament before the Regional Trial Court, Branch 16, Cavite City under Special Proceedings No. N-6968 entitled "In the Matter of the Petition For Allowance Of The Last Will and Testament of the Late Carmen E. Manalo." prcd It is represented that Carmen E. Manalo who was a resident of Cavite City died on February 6, 2000 with a last will and testament; that prior to her death, you and the late Carmen E. Manalo were both unmarried, business partners and very close friends; that both of you have maintained a joint savings account with the LBP, Cavite Branch bearing Account No. 0311-0594-91 as certified to by the Branch Manager, Ms. Ma. Socorro N. Regala; that under the terms of the said account, either party may withdraw therefrom at anytime; that in the said will, she have bequeathed to you among others, all the money in her checking/savings account with the Bank of the Philippine Islands (BPI) and the Prudential Bank in Cavite City and all money (cash) that might be owing or due to her; that both accounts with BPI and Prudential Bank have been closed and the money have been withdrawn therefrom, including the proceeds from the real property sold by Carmen E. Manalo while still alive, which amounted to P17,300,000.00 and have been deposited with Land Bank; and that the LBP does not object to your desire to withdraw half of the amount deposited from the said joint savings account provided that the estate tax due thereon had been paid and settled to the Bureau of Internal Revenue. prcd In reply thereto, please be informed that pursuant to Section 97 of the Tax Code of 1997, pertinent portion of which states: "xxx xxx xxx "If a bank has knowledge of the death of a person, who maintained a bank deposit account alone, or jointly with another, it shall not allow any withdrawal from the said deposit account, unless the Commissioner has certified that the taxes imposed thereon by this Title have been paid: Provided, however , that the administrator of the estate or any one (1) of the heirs of the decedent may, upon authorization by the Commissioner, withdraw an amount not exceeding twenty thousand pesos (P20,000.00) without the said certification. . . ." The above-cited section provides for safeguard for the payment of estate tax, i.e., unless a certification has been issued by the Commissioner that the estate tax has been paid, only the amount of P20,000.00 may be authorized by the Commissioner to be withdrawn from the bank account of the deceased. However, equity and justice dictate that the above provision must be construed to benefit both parties, by safeguarding the right of the BIR to collect the right amount of taxes and also by extending to the taxpayer the right to pay the tax under exceptional circumstances. In the instant case, since as represented the amount deposited in the joint savings account maintained by you and the deceased Carmen E. Manalo with LBP is more than sufficient to cover the payment of the estate tax due on the transmission of the said estate to the heirs of Carmen E. Manalo, this Office is of the opinion as it hereby holds that your request to withdraw half of the P17,300,000.00 amount deposited in the joint savings account maintained with LBP is hereby granted. This will, therefore, serve as an authority for the Land Bank of the Philippines, Cavite Branch, to allow you to withdraw from Savings Account No. 0311-0594-91, in the name of Carmen E. Manalo or Edna C. Samonte, the amount of P8,650,000.00 representing half of the amount deposited from the said bank. cdlex Very truly yours, (SGD.) ROMEO S. PANGANIBAN Deputy Commissioner Operations Group (Officer-in-Charge)