BIR Ruling [DA-298-04]

June 1, 2004 BIR RULING [DA-298-04] 90 (C) & 91 (B) DA-260-2000 Ms. Maribel J. Rivera 925 J. P. Rizal Street Makati City M a d a m : This refers to your letter dated December 23, 2003 stating that Jose M. Rivera died a resident of Makati City on April 22, 2000; that an intestate proceeding had been instituted before the Regional Trial Court of Makati City, Branch LVII (57) under Special Proceeding No. M-5556 entitled "In The Matter of Petition For The Settlement of the Estate of Jose M. Rivera, Isabel J. Rivera, petitioner, versus Joseph J. Rivera, oppositor"; that the said proceeding is still pending adjudication; that you are duly appointed by the above-mentioned court to be the special administratrix of the estate of herein decedent; that you are requesting for an extension of time or a period of five (5) years to be reckoned from the expiration of the original period for the filing of the estate tax return and payment of estate tax, or from the due date thereof, within which to file the estate tax return and to pay the estate tax due on the estate of Jose M. Rivera; that your request was impelled by the pendency of the above-mentioned proceeding and undue hardship that would be imposed upon the estate or all of the heirs of said decedent by the payment of the estate tax due to lack of sufficient cash to effect such payment, except to generate the same through the sale and/or encumbering the property of the estate, personal and real, as may be determined necessary by the above-named court; that as such, you had already filed with the court a motion for urgent authority to sell and convert certain assets of the estate into cash to raise such amount as may be needed for the settlement of the aforesaid estate tax. In reply thereto, 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 (30) 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 (5) years in case the estate is settled through the courts, or two (2) years in case the estate is settled extrajudicially pursuant to Section 91(B) of the Tax Code of 1997. Based on the aforestated justifiable reason, your request for an extension of five (5) years reckoned from October 22, 2000 within which to pay the estate tax is hereby granted pursuant to Section 91(B) of the Tax Code of 1997. On the other hand, under Section 90(C) of the Tax Code, only thirty (30) days is granted as an extension of the period within which to file the estate tax return, thus, considering that Jose M. Rivera died on April 22, 2000, said period had already lapsed. Such being the case, you are hereby directed to immediately file the estate tax return for the estate of Jose M. Rivera in order to stop the running of the interest for late filing thereof. Moreover, in view of the above favorable action to your request for an extension of five (5) years within which to pay the estate tax, this Office has decided to forego the imposition of the surcharge and penalties on the estate tax due on the transmission of the estate of Jose M. Rivera. However, it shall be understood that the estate shall be liable for the corresponding interest that have accrued thereon up to the time of payment of the aforesaid estate tax pursuant to Section 249 of the Tax Code of 1997. (BIR Ruling No. DA 260-2000 dated June 9, 2000) Further, as the special administratrix of the estate of Jose M. Rivera, you are hereby required to furnish a bond in such amount not exceeding double the amount of the tax and/or a surety conditioned upon the payment of the estate tax in accordance with the terms of this extension. SEIcAD Very truly yours, Commissioner of Internal Revenue By: (SGD.) MILAGROS V. REGALADO Assistant Commissioner Legal Service