BIR Ruling [DA-423-06]

July 11, 2006 BIR RULING [DA-423-06] 90 (C) & 91 (B) Atty. Maria Lourdes R. Reyes 131 F. Manalo St., San Juan Metro Manila M a d a m : This refers to your letter dated December 12, 2005 stating that Marcelina Reyes Quesada died on August 15, 2005; that her sole heir, Leonardo Reyes Quesada, is residing in the United States of America and cannot in the meantime take a leave to gather and update the documents needed for the filing of the estate tax return of the decedent; that the original copy of the title of the real property located in Bulacan which is part of the estate of the decedent has to be reconstituted since it was destroyed by fire; that the other property located in San Juan cannot as yet be determined by the Assessor of San Juan until after a resurvey; that Mr. Quesada is at present not financially capable of paying the estate tax; that he is planning to sell the San Juan property and use part of the proceeds for the payment of the estate tax; and that in view thereof, and for Mr. Quesada's behalf, you are requesting an extension of two (2) years within which to pay the estate tax due on the estate of the decedent. 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. STHAaD 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 Marcelina Reyes Quesada may be paid up to two (2) years counted from August 15, 2005 or until August 15, 2007. Moreover, it is advised that you immediately file the estate tax return for the estate of Marcelina Reyes Quesada in order to stop the running of the interest for late filing thereof. Further, in view of the above favorable action on your request for an extension of two (2) 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 Marcelina Reyes Quesada. 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. Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service