BIR Ruling [DA-386-05]

September 9, 2005 BIR RULING [DA-386-05] 90 (C) & 91 (B) Angara Abello Concepcion Regala & Cruz ACCRA Building, 172 Gamboa Street Legaspi Village, Makati City Attention: Attys. Victor P. Lazatin & Ruby Rose J. Yusi Gentlemen : This refers to your letter dated September 5, 2005 requesting on behalf of your client, Atty. Victoria C. delos Reyes, Executrix Designate of the late Pacita delos Reyes (the "Decedent"), an extension of thirty (30) days from September 10, 2005 or until October 10, 2005 to file the Estate Tax Return of the Decedent and an extension of five (5) years from September 10, 2005 or until September 10, 2010 to pay the full amount of the tax due on the transmission of the estate of the Decedent to the heirs. It is represented that the Decedent died on March 10, 2005, leaving a Last Will and Testament which is now being probated in court. The heirs are now in the process of preparing the statement of assets, liabilities and allowable deductions of the estate of the Decedent and gathering of documents to support the Estate Tax Return. Likewise, the estate has no sufficient liquid assets to cover the estimated estate tax, thus, the balance thereof would have to be sourced from the sale of some of the assets of the Decedent. Hence, this request for an extension of thirty (30) days within which to file the Estate Tax Return and an extension of five (5) years to pay the estate tax due thereon. 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 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. Based on the aforestated justifiable reason, 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. Accordingly, the estate tax due on the estate of Pacita delos Reyes may be paid up to five (5) years counted from March 10, 2005 or until March 10, 2010. On the other hand, under Section 90(C) of the Tax Code, a thirty-day extension is granted as an extension of the period within which to file the estate tax return, thus, considering that the last day for filing the estate tax return of the estate of Pacita delos Reyes is on September 10, 2005, the period within which to file the same is hereby extended up to October 10, 2005. 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 Pacita delos Reyes. 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. DaScHC Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service