Atty. Epifanio Ma J. Terbio, Jr.

June 20, 2007 BIR RULING [DA-342-07] Atty. Epifanio Ma J. Terbio, Jr. San Juan, Camalingan Camarines Sur S i r : This refers to your letter requesting for a reconsideration of the denial by the Regional Director of Revenue Region No. 10, Legazpi City, of your request for an extension of time within which to file the estate return and pay the estate tax due on the estate of the late Natividad Vda. De Ignacio who died on November 21, 2004. The facts as represented are as follows: On May 5, 2006, you made a request to the Regional Director concerned for an extension of one (1) year within which to file the estate tax return and pay the corresponding tax for the estate of the late Natividad Vda. De Ignacio. The said request was denied for the reason that a one year extension had already been granted in your favor. Hence, this request for a reconsideration and further requesting to extend the period within which to file the estate tax return and pay the corresponding tax thereon within five (5) years since the estate of herein decedent is settled through the court. 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 (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 five (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. Considering that the estate of Natividad Vda. De Ignacio is settled judicially, your request for an extension of time within which to pay the estate tax is hereby granted pursuant to Section 91 (B) of the Tax Code of 1997, as amended. Accordingly, the estate tax due on the estate of Natividad Vda. De Ignacio may be paid up to five (5) years counted from May 21, 2005, the last day prescribed by law within which to pay the said tax, or until May 21, 2010. 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 reckoned from the lapse of the six-month period within which the said return is required to be filed. Thus, considering that the decedent died on November 21, 2004, said period had already lapsed. Such being the case, you are hereby directed to immediately file the estate tax return for the estate of Natividad Vda. De Ignacio in order to stop the running of the interest for late filing thereof. CDTHSI Moreover, in view of the above favorable action on 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 Natividad Vda. De Ignacio. However, it shall be understood that the estate shall be liable for the corresponding interest that has accrued thereon up to the time of payment of the aforesaid estate tax pursuant to Section 249 of the Tax Code of 1997. 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, then this ruling shall be considered null and void. Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service