BIR Ruling [DA-260-00]

June 9, 2000 BIR RULING [DA-260-00] 90 (B) (C) 573-98 DA-260-2000 Arcadio R. Garcia and Associates Certified Public Accountants 3-1 Edificio Enriqueta Corner D. Tuason & Amoranto Sts. Sta. Mesa Heights, Quezon City Attention: Mr. Arcadio R. Garcia Partner Gentlemen : This refers to your letter dated April 5, 2000 requesting on behalf of the Estate of the late Fernando M. Zabarte for an extension of time to file the estate tax return pursuant to Section 90(C) of the Tax Code of 1997 and at the same time for waiver of the surcharge, penalties and interest due thereon. It is represented that the late Fernando M. Zabarte died on October 17, 1999 and that you are constrained to make this request for the following reasons, viz: "1. The decedent who up to the time of his death was a resident of 201 Lantana Street, Quezon City, and died a bachelor at the age of 88; that before and at the time of his death, nobody keeps the record of his real and personal property; and that his heirs, a sister and brother who are 91 and 73 years old respectively, are encountering difficulties in determining the properties to be included in his estate; 2. Furthermore, some of the properties to be included in his estate could not be determined accurately as they also belonged to the Estate of his mother, the late, Asuncion M. Zabarte who died on October 29, 1977; 3. The settlement of his mother's estate is the subject of Special Proceeding case (Sp. Proc. No. Q-25234) which is pending since 1978 in Quezon City Regional Trial Court; 4. Initial data and information you have gathered showed that approximately 99% of the decedent's estate consist of real properties located in Metro Manila and in the province of Batangas; and 5. Considering the poor cash position of the estate and the difficulty of disposing real property nowadays, you expect that the estate tax due on the decedent's estate could not be settled within the near foreseeable future." In reply, please be informed that under Section 90(B) and (C) of the Tax Code of 1997, estate tax return is required to be filed within six (6) months from the decedent's death, and in meritorious cases, a reasonable extension not exceeding thirty days for filing the return may be granted by the Commissioner of Internal Revenue. The payment of the estate tax or any part thereof shall be made upon the filing of the return or on such date as fixed if an extension is granted by the Commissioner, but in no case to exceed five years in case the estate is settled through the courts, or two years in case the estate is settled extrajudicially pursuant to Section 91(B) of the Tax Code of 1997. Based on the aforestated justifiable reasons, your request for an extension of thirty (30) days from April 17, 2000 which is the last day for filing the estate tax return of the late Fernando M. Zabarte is hereby granted. Accordingly, the filing of the said estate tax return of the decedent is hereby extended up to May 17, 2000 pursuant to Section 90(C) of the Tax Code of 1997. In view of the foregoing, this Office has decided to forego the imposition of the surcharge and penalties on the estate tax due on the transmission of the late Fernando M. Zabarte's estate to the heirs. However, it shall be understood that the estate shall be liable for the corresponding interest that have accrued thereon up to the time of filing of the estate tax return pursuant to Section 249 of the Tax Code of 1997. (BIR Ruling No. DA-573-98 dated December 23, 1998) Very truly yours, Commissioner of Internal Revenue By: (SGD.) LILIAN B. HEFTI OIC, Deputy Commissioner (Legal & Inspection Group)