BIR Ruling [DA-399-00]

November 21, 2000 BIR RULING [DA-399-00] Mr. Danilo A. Lihaylihay 25 A Kaunlaran Street IBP Road, Batasan Hills Quezon City S i r : This refers to your letter dated June 9, 2000 requesting for the payment of 15% reward under then Section 281(1) of the Tax Code. as amended, in relation to the internal revenue tax base of Philtranco Service Enterprises. Inc. (PSEI) for the year 1990. You stated that on account of your Confidential Information No. 2574, revenue officers of the Tax Fraud Division pursued the investigation of PSEI which culminated in the issuance of deficiency assessment notices in the amounts of P30,163,459.22 and P3,521,299.68 as deficiency income and common carrier's taxes, respectively, for the year 1990; and that on April 14, 1999, you were informed by Assistant Commissioner Melchor Ramos that Warrants of Distraint and/or Levy and Warrant of Garnishment were issued and served upon subject-taxpayer on February 16, 1999 to effect the collection of the said tax liabilities. In connection therewith, please be informed that although warrants of distraint, levy and garnishment were indeed issued and served upon PSEI, the collection of the latter's tax liabilities was not actually effected. This is so, because the deficiency tax assessment in question was withdrawn and cancelled by virtue of the letter dated December 3, 1999 of former Commissioner Beethoven L. Rualo to PSEI. Accordingly, you are not entitled to informer's reward because there was no actual collection of revenues in the instant case. Needless to state the payment of informer's reward under Section 282 (formerly Section 281 of the Tax Code of 1997) is conditioned upon the actual recovery or collection of revenues. (Meralco Securities Corporation vs. Savellano, et al., L-36181, October 23, 1982 and Commissioner of Internal Revenue vs. Savellano, et. al., L-36748, October 23, 182) aSCDcH Very truly yours, Commissioner of Internal Revenue By: (SGD.) LILIAN B. HEFTI Deputy Commissioner Legal & Inspection Group