BIR Ruling [DA-590-06]

October 4, 2006 BIR RULING [DA-590-06] 90 (C); DA-422-2006 Venturanza Law Office Penthouse D, LPL Plaza, 124 L.P. Leviste St. Salcedo Village, Makati City Attention: Atty. Thaddeus E. Venturanza Gentlemen : This refers to your letter dated August 18, 2006 requesting on behalf of your client, the estate of Rosario Medina , for an extension of thirty (30) days within which to file the estate tax return and pay the estate tax due thereon. It is represented that the late Rosario Medina died last February 21, 2006; that she was survived by her two (2) children and three (3) grandchildren by her first son who predeceased her; that the filing of the estate tax return is due on August 20, 2006; that since the decedent's three (3) grandchildren are residents of the United States of America, the extrajudicial settlement of the decedent's estate can not be completed and finalized; that you have already informed the three USA residents of the death of Rosario Medina and they told you that the necessary special power of attorney in favor of one of the heirs residing here in the Philippines is already forthcoming; that the estate's cash on hand is not enough to pay for the estimated estate tax liability; and that the heirs are exerting efforts to sell some real properties of the estate so that the proceeds thereof can be allotted for the payment of the 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 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. DHSACT Based on the aforestated justifiable reason, your request for an extension of thirty (30) days counted from August 20, 2006, which is the last day for filing of the estate tax return of the late Rosario Medina, is hereby granted. Accordingly, the filing of the said estate tax return of the decedent is hereby extended up to September 20, 2006 pursuant to Section 90 (C) of the Tax Code of 1997. In view of the foregoing, this Office has decided to forego within the 30-day period the imposition of the surcharge and penalties on the estate tax due on the transmission of the estate of the late Rosario Medina to her heirs. 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 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